Interview with Der Standard: "Noch nie war Athen so bankrott wie heute"

sisyphusINTERVIEW with ANDREAS SATOR, April 25, 2014. Click here for THE STANDARD’s website or read on …

The protests in the streets of Athens have no end. For the economist Yanis Varoufakis is hardly surprising. Greece was by European standards a “failed state”.

The EU lie the people in Europe, says Yanis Varoufakis. The Union Bank was a joke, the situation in Greece devastating

Standard:  They say everyone who hears from the recovery of the Greek economy, has a moral duty, ironic laugh. Why?

Varoufakis:  from the recovery of an economy that puts six years of recession, one can only speak when investment and employment to rise and lending attracts. In Greece, none of this is the case.

Standard:  This week Greece has reissued but even bonds. No sign of recovery?

Varoufakis:  This is a cheap, political stunt. The EU is lying to the people of Europe. Never Greece was bankrupt as it is today. The country has 320 billion euros of debt, as much as 2010. But the Greek GDP has since shrunk to 40 billion euros. The only reason why investors this time bought the papers is that they are indirectly guaranteed by Berlin and Frankfurt, so the German government and the ECB. You want to explain this action only before the May election victory over the crisis.

Standard:  You have Greece called a “failed state”. Is not that a bit exaggerated?

Varoufakis:  There are different types of failed states. If you look in the context of the EU to Greece, then this is so. Two out of three households debts to the tax authorities can not repay. 3.5 million working Greeks have 1.3 million unemployed and received 4.5 million non-working Greeks. Two out of three business loans can not pay back a million households owe the power company money.

Standard:  As Greece comes out of it?

Varoufakis:  One has to face the truth. Greece is bankrupt. That was years ago. Instead of addressing this problem, Europe has the  insolvency abducted and given the country’s largest credit history. Greece must stop repay the debt, and find ways on how it stabilizes the economy. This is the only way to rid yourself from this situation.

Standard:  How can we stabilize the economy?

Varoufakis:  First, you have to address the Europe. The problem of Greece – too much debt, too little investment, insolvent banking sector – and have had a lot of countries in Europe. It makes no sense to treat the problem separately Greece. Second, there is in Europe a mountain of money that is moved back and forth between banks and financial markets fueling. The one must be used for productive investment.

Default:  How?

Varoufakis:  You’d need to not only control euros more. The European Investment Bank has a variety of interesting projects in the drawer are to join as Greece with a high-speed train with Austria. It finances its projects through bonds, the investors would love to buy up. You can see that the low interest rates to be paid by them. The projects are not realized because half of each investment must be privately funded and guaranteed by the local government. This guarantees a flow but in the Maastricht deficit. That no one wants to touch now. This could but just a way out of the crisis to be.

Standard:  Greece but had a big problem with its government spending. If more guarantees since the answer?

Varoufakis:  No doubt, the Greek government is very inefficient. The government spending but not higher than elsewhere. When an economy but as breaks and there is neither investment nor loans, then that is the only option. Of course, Greece has problems, but that’s not the reason why we talk now. The reason for this is the architecture of the euro zone. Had Greece not adopted the euro, so the problem would not exist. One has to start in the Great especially.

Standard:  This was done in the last few years, yes.

Varoufakis:   Where?

Standard:  In the banking union, for example. Commentators spoke of the most far-reaching reform in the last 20 years.

Varoufakis:  The Union Bank is one big joke. You will go down as the next great word shell of the EU in history. The 55 billion available for recapitalizations, not even enough for a large bank. There is also no common deposit insurance. What we have is thus only another EU propaganda tool.

Standard:  How much money is needed?

Varoufakis:  The ECB would have to be in the background, as this makes the central bank in the United States. In the crisis was unlimited in the U.S. money there. Also: Look at the animation of when a bank is to be settled. At the end of the decision making goes back to the nation-states. We do not have a banking union, but the thing called that. This is George Orwell, “1984”. ( Andreas Sator , THE STANDARD, 04/26/2014)
Yanis Varoufakis (53) is Professor of Economic Theory at the University of Athens. He is currently a guest lecturer at the University of Texas. He blogs regularly  yanisvaroufakis.eu