Heard the news? Greece's finance minister is no extremist – THE TELEGRAPH

Yanis Varoufakis: Greece’s future finance minister is no extremist

The man touted as frontunner to be Syriza’s finance minister is not the socialist firebrand which one might expect

Syriza, a hard left party, that outrightly rejects EU-imposed austerity, has given Greek politics its greatest electoral shake-up in at least 40 years.

You might expect the frontrunner for the role of finance minister to be a radical zealot, who could throw Greece into the fire.

He is not.

Yanis Varoufakis, the man tipped to be at the core of whatever coalition Syriza forges, is obviously a man of the left.

Yet through his career, he has drawn on some of the most passionate advocates of free markets.

While consulting at computer games company Valve, Mr Varoufakis cited nobel-prize winner Friedrich Hayek and classical liberal Adam Smith, in order to bring capitalism to places it had never touched.

He clocked that there was an irony to market-based economies. We have markets for land, sheep, labour and even money itself. But inside companies themselves, exist “market-free zones”.

“Firms can be seen as oases of planning and command within the vast expanse of the market,” Mr Varoufakis has written.

His work at the tech company helped it in “trying to become a vestige of post-capitalist organisation within capitalism”.

Yet while Greece’s future minister is a fan of markets in many contexts, it is apparent that he remains a leftist, and one committed to the euro project.

Speaking to the BBC on Monday, he said that it would “take an eight or nine year old” to understand the constraints which had bound Greece up since it “tragically” went bankrupt in 2010.

“Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders, the Greek taxpayer,” he said.

“What we’ve been having ever since is a kind of fiscal waterboarding that have turned this nation into a debt colony,” he added.

Greece’s public debt to GDP now stands at an eye watering 175pc, largely the result of output having fallen off a cliff in the past few years. Stringent austerity measures have not helped, but instead likely contributed.

Despite this, the Greek government faces a €2.3bn (£1.7bn) revenue shortfall in 2015. It will likely be Mr Varoufakis’ job to make the best of an impossible situation.

The first thing he will seek to tackle is Greece’s humanitarian crisis. “It is preposterous that in 2015 we have people that had jobs, and homes, and some of them had shops until a couple of years ago, that are now sleeping rough”, he told Channel 4.

The party may now go after multinationals and wealthy individuals that it believes do not pay their way.

Born in Athens in 1961, he moved to England to study mathematical economics at Essex. From there, he went on to earn his PhD in Mathematics and Statistics, taking university appointments at Cambridge, East Anglia, Sydney, and Glasgow.

He has since become a visiting professor at both of the University of Athens and the University of Texas. It is at the latter than he co-authored “A Modest Proposal for Resolving the Eurozone Crisis“, along with prominent left-wing economist James Galbraith.

There is no question that Mr Varoufakis has an awareness of Greece’s precarious situation. Speaking to Bloomberg TV after Syriza’s win, he made it clear that there was “a deep sense … of fear of what’s coming ahead”.

Greece’s economic pain has an almost ludicrous cause – a shortage of demand. If the country had entered the crisis with its own central bank then a monetary response could have been forthcoming.

Instead, political obstacles have prevented the euro area’s central bank from doing its work, and Greece has paid a heavy toll.

Years on from the Lehman collapse Greece now endures a jobless rate of 25.8pc, according to Eurostat estimates. More young Greeks are unemployed than in work.

The single currency project has fallen under heavy criticism. The economies that formed it were poorly harmonised, and no amount of cobbling together could make the end result appear coherent.

Michael Cembalest, of JP Morgan, calculated in 2012 that a union made up of all countries beginning with the letter “M” would have been more workable.

The same would be true of all former countries of the Ottoman Empire circa 1800, or of a reconstituted Union of Soviet Socialist Republics, he found.

Yet now a euro exit is almost certainly not an option, nor is it Mr Varoufakis’ preference.

A disorderly break up would almost certainly result in a merciless devaluation of whatever currency Greece launched, and in turn a default on debt obligations. The country would likely be locked out of the capital markets, unable to raise new funds.

As an economy, Greece has only just begun to see output growth return. GDP still remains more than 26pc below the country’s pre-crisis peak. A fresh default is not the lifeline that Greece needs.

Instead, it will be up to a Syriza-led government to negotiate some sort of debt relief, whether that be in the form of a restructuring, a deal to provide leeway on repayment timings, or all out forgiveness.

It will be up to Mr Varoufakis – if he is selected as finance minister – and newly sworn in Prime Minister Alex Tspiras to ensure that this can be achieved without Greece getting pushed out of the currency bloc in the process.



  • Yannis, go ahead dont listen to nobody. It is time to convert your modern theories into real practice!
    Hellenic Ministry of Economy is awaiting for you.
    And we can join and help too.

  • Another version, hardly heard in the early days but far more credible today, is that the crisis is the result of Germany’s irresponsibility. Germany, the fourth-largest economy in the world, exports the equivalent of about 50 percent of its gross domestic product because German consumers cannot support its oversized industrial output. The result is that Germany survives on an export surge. For Germany, the European Union — with its free-trade zone, the euro and regulations in Brussels — is a means for maintaining exports. The loans German banks made to countries such as Greece after 2009 were designed to maintain demand for its exports. The Germans knew the debts could not be repaid, but they wanted to kick the can down the road and avoid dealing with the fact that their export addiction could not be maintained.

    Read more: The New Drivers of Europe’s Geopolitics | Stratfor
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    • German mercantilism explains the general crisis afflicting peripheral Europe, but Greece was a special case.

      It was essentially a third-world economy (until relatively recently its population lived mostly in rural villages) that Western Europeans were previously willing to aid heavily (due to nostalgia for the “cradle of Western civilization”, and due to its strategic location in the eastern Mediterranean).

      What veneer of prosperity it did have in the late 20th century was almost entirely due to the way it found a niche as a cheap holiday destination — adopting the Euro deprived Greece of its price advantage, and its dependence on tourism meant the European recession beginning in 2008 was utterly devastating. (Holidays abroad are one of the first things that people cut back on in hard times.)

  • i really hope you get chosen as finance minister. you can do a lot of good! i love your realistic apprehension of the situation and application.

    that said…anyone comment you look like howard webb? 🙂

  • Having heard the whole of the BBC intervew, I can only say:
    It pays to be radical ahead of the negotiation, and reach a descent compromiss at the end. Admitting to posture ahead of the negotiation cannot help.
    Sorry but Greece cannot afford another “Forget it Yannis”

  • Κ. Βαρουφακη, θα προτιμουσα να ησουν “εξτρεμιστης” (με τη καλη εννοια). Βεβαια οι πραγματικοι εξτρεμιστες ειναι ολες αυτες οι ελιτ που ελεγχουν την ΕΕ, την ΕΚΤ, τις τραπεζες και τα ΜΜΕ. Δεν υπαρχει αμοιβαια επωφελης λυση που μπορει να βρεθει. Και εχουν το πανω χερι αφου ελεγχουν και πιεζουν την Ελλαδα απο ολες τις αποψεις. Το μονο οπλο ειναι οι μονομερεις ενεργειες.

    Δεν υπαρχει λοιπον καποια μεση λυση που μπορει να βρεθει. Ειτε διαγραφουμε μονομερως το χρεος και αποχωρουμε απο την Ευρωζωνη, ειτε τηρουμε ολα τα μνημονια με οτι (καταστροφικο) αυτο συνεπαγεται.

    • Greece should remember this : if the Troika were real extremists they could let Greece leave not only the Euro zone but kick them out of the EU also. Here is a threat for you. Think about how life in Greece will be after that. I assure you if you think Greece has suffered too much austerity already now, you haven’t seen even the beginning of it. I would think twice about threatening Europe if I was Syriza. Things could get realy bad, you haven’t seen anything yet.

    • If Greece defaults on its debt and re-introduces a new currency then there will be no more austerity because there will be relief from further debt payments. The debt is not sustainable and it is not possible to repay it. A new national currency is an effective way to fund public expenditure and to increase liquidity in the economy.

      Many greek people are depressed and live in poverty and unemployment because of the IMF-EU imposed program. Life in Greece will be far better if we exit EU and Eurozone. We will be a sovereign nation. EU is authoritarian and elitist, ruled by unelected bureaucrats. EU is responsible for the destruction of the greek industrial sector because of the abolition of tariffs and the implementation of free trade agreements.

  • Dear Yanis,

    or perhaps I should say Dear Minister,

    I feel honored to have been following such a distinguished and eloquent writer like you are. Though, I’d like to keep reading your posts I realize your new role, as you wrote, will slow it down, thus I feel compelled to wish you and all of us the best for Europe and what’s to come after this shakedown you and the electoral vote will bring.

    Thank you and all the best “my friend”. –Rudi from Italy

  • Congratulations. You are “the man” for the job. I modest advise to you while dealing with the Euro officials is to always leave the possibility of Greece leaving the Euro on the table. Germany would quake in fear over that……

    • How right you are! I have to apologize for our chancellor to be such an incompetent, cold hearted and tumb idiot who understands about economy as much a donkey about milking mice, she’s absolutely pathetic! The minute she opens her mouth to divulge some of her 150-words-vocabulary is making me want to v……

  • “Yet while Greece’s future minister is a fan of markets in many contexts, it is apparent that he remains a leftist, and one committed to the euro project.”

    That’s a contradiction. You are not a leftist but a social-liberal. And your commitment to the euro project (which is created and controlled by private bankers) means that you are committed to neoliberal globalisation.

  • Κυριε Βαρουφακη,ειστε Ελληνας,προσδοκατε μια υπουργικη θεση αφου ο Ελληνικος λαος, σας τιμησε με τη ψηφο του,γιατι η σελιδα σας ειναι στα Αγγλικα αναρωτηθηκατε μηπως υπαρχει κοσμος που δε τα μιλα?Ειναι απαραδεκτο για να μη πω κακογουστο,να απευθηνεστε στους Ελληνες σε αλλη γλωσσα.

    • Απευθύνεται σε όλον τον κόσμο, όχι μόνο στους Έλληνες. Συνηθίζεται αυτό…

  • As negotiations with the Troika and their German masters looms, another negotiation with Germans comes to mind: that faced by the Bolsheviks at Brest-Litovsk in 1918. I’d suggest Trotsky should inspire you, at least in the sense that he used the negotiations to speak over the heads of the generals across the table to the common people drafted into their armies. The Syriza coalition is acutely aware of the importance of solidarity with Europeans who have suffered under financialist policies, and I would imagine that Syriza can legitimately expect an American audience as well. I hope that Syriza’s struggle with the Troika is conducted loudly and with full transparency, such that we can all be at the table with you.

  • So the only real concern is this : The country would likely be locked out of the capital markets, unable to raise new funds!
    So here we can see the new morals of the new Greek government : paying back other people’s money is the least of their concern, the only thing they care about is if they can retain by all means the possibility to embezzle even more of other people’s money.

    • Being unable to pay back debts that you weren’t able to handle even at the time they were extended is not a lack of morals.
      Strangely enough you don’t seem to question the morals of the people that extended these loans on the back of “other people’s money” even though they knew that chances they would be paid back were extremely thin.

  • Good luck with the giant debt snowball. As a Cypriot I am against the Anglo- American financial conspiracy
    as much as any libertarian Marxist but also think that the Greeks are as much to blame for their
    unmanageable debt!

  • … What we’ve been having ever since is a kind of fiscal waterboarding that have turned this nation into a debt colony …

    I love this Finance Minister’s turn of phrase. It describes at least 15 million English and Celts in the UK very well. Me included.

    So UK has been in fiscal waterboarding, with the Tories spending more in 5 years than Labour did in 13 years, by the billions more and more each year on welfare reform admin, just to leave the poor starving and into a debt colony from pay day lenders loan sharks.

    People have no choice, as left with nil food money and no money for the pre payment electric meter, so left freezing.

    And we have no debt to the EU, just paying the EU and then saying there is no money to feed the starving babes yet born, kids, young mothers with new babies, and grannies.

    Can he come and rule England. I’ll vote for him.

    Here I sit with nil benefits and now will never get a state pension for life. See why at:
    uner my petition in my WHY THIS IS IMPORTANT section, at:

  • Sure a nine year old could explain it.
    Too much birthday cake from the most expensive bakeries.

  • Paul Krugman had a very, very supportive article in the New York Times but which was also printed on the Business section of yesterdays Irish Times. I am really excited about the prospect of you becoming Finance Minister and will do everything I can to help the Greek Cause.

    • Very good article by Owen Jones in today’s The Guardian on how Greece’s stance is important and must not be stifled by Merkel. ‘We must stop Angela Merkel’s bullying – or let the forces of austerity win.

  • I think that Greece cannot change under this coalition. SYRIZA is too moderate and needs to return to its socialist roots. Otherwise it ends up like PASOK or Democratic Left. My problems with SYRIZA is that it is a reformist party, although it started as the Coalition of the Radical Left. European capitalism feared a revolution, but once they find out that SYRIZA is willing to compromise they will relax. As a revolutionary socialist, I think that Greece can not turn socialist inside the EU. Because the European Union is build as a capitalist union.

    Does SYRIZA even want socialism or are they just look at classic old style social democracy ( more taxes for the rich, higher wages ). Socialism is the only alternative to austerity and European capitalism. A Hellenic Socialist Republic must be build, all means of production must be nationalized and the rich expropriated. A euro exit will happen because the European Union will never allow a socialist Greece, unless SYRIZA bows to the ECB and IMF like PASOK did!

  • I fear that SYRIZA has become too reformist, too much like PASOK. If so then there will be massive disillusionment among workers and poor people, if SYRIZA keeps the bourgeoisie alive and their capitalist state. The rich must be expropriated, their wealth nationalized and put under democratic control of workers. But is that what SYRIZA fights for? Or is SYRIZA just a party for moderate leftism?

    Greek workers demand change, but changes can only come by braking with the EU and the whole capitalist system. This is why the stock markets feared SYRIZA, this is why the right-wing of Greece was in panic. They fear socialism and what radical leftism means. But if SYRIZA turns out to be a another PASOK, then many workers might turn to neonazi’s like the Golden Dawn!

    17 political parties/groups created the Coalition of the Radical Left. Many of them are revolutionary, but I see so little radicalism among the leaders of SYRIZA. Therefore I call on all SYRIZA members to fight for socialism and workers rule. Against the European Central Bank, against the International Monetary Fund and for the establishment of a Hellenic Socialist Republic!

  • I am hopefull, partly because of you Yanni, I see a glimer of light between the clouds and that gives me strength and smile to keep hoping that one day we can be an example instead of a scape goat for the rest of Europe and the unification we hope to achieve in all levels.I can only hope that our thoughts give you the strength you will need to achieve the impossible in the eyes of the world and the hearts of the citizens of our country. I thank you for that…

  • Those people that don’t want Greece to recover will attempt to smear you in their newspapers. German economic fascism has dragged Europe in near dark ages. I hope you turn Greece into an example of how Europe can recover. Best of luck to you, and your fellow Greeks!

  • Far too many people criticise capitalism and the finance sector without appreciating it’s major strengths, virtues and benefits. Based on what I have seen of Yanis so far it would seem to me that he does not suffer from such conceit.

    * Greece should stay in the euro.
    * Greece needs to default on it’s debt one way or another.
    * Greece should adopt the idea proposed by economist Steve Hanke called “fiscal devaluation”. In short it should axe taxes that raise the cost of employing people and doing business. For example cut the social security tax (payroll tax).

  • I hope and pray that history may prove me wrong in what I write here:
    What I am really concerned about is where exactly the money is going to come from to raise pensions, wages etc., all over again as well as re-hiring “dinosaurs” to a public sector which is reminiscent of soviet Russia only without a real system and without real discipline. What also concerns me deeply is that the Syriza party comprises many old-school Pasok politicians – hence Syriza’s major followers and voters, communist nostalgic MP’s in their 60’s and 70’s and trade union leaders who are responsible for devastating Greece in the first place which rendered the EU to intervene and to demand control and checking of Greece’s finances. Add to this the infiltration of thugs and anarchist style militia in their ranks and you can understand how the situation is likely to develop in the coming days, weeks and months in Greece. To my humble opinion, Greece and its people committed suicide en masse by voting into power Syriza and the sad thing is that they have not yet realised this but will soon enough when the austerity of the previous administration will seem like paradise compared to what will be suffered by the population and very soon too. For if Greece and it’s new government can threaten, so can the EU and even take a stance in the form of embargoes on food, medicine, energy, oil imports etc., to the country. If Europe really wishes to threaten and push the limits then such would not be improbable. Modern Greek politics unfortunately is simply a continuation of the terrible remnants and legacy of the civil war of 1946-1949. Syriza and other delusional parties such as KKE are still waiting for mother Russia to come to their saving grace whilst centrists and the right are still waiting for the US to redeem them. Alas they are both waiting in vain and alas the biggest problem of Greeks is that they constantly blame others for their own wrongdoings. It is always the others’ fault and to my mind, most people refuse to accept that the world has moved on – but dare I try and say something to the contrary to arouse even one person from their delusional nirvana. Immediately, I am categorized as an anti-Greek and a German or Englishman in terms of mentality and if I do not like it every time I am in Greece (thankfully only for holidays now), that I can “+*&+” off out of Greece and go and live in the country’s which are purposefully killing Greece. This is the reaction I always got when in Greece even when I was a little kid of 8 collecting rubbish from the beach (a common occurrence back in the 1980’s), when grown men with a typical Greek bravado pseudo-macho attitude confronted me shouting to me “who do you think you are collecting rubbish, some kind of saviour, aren’t you Greek etc…” and the abuse continued. Greece has not improved from then and it is anachronism which was victorious in last Sunday’s election – anachronism of a defunct and paralysed nation with people unwilling and unable to progress and evolve in a modern and developed world.

    I hope and pray that I may be wrong in believing what I do, but something tells me that this new adventure in Greece’s tormented history can only end in tears and unfortunately in bloody civil war as well for never before have so many divisions arisen in society and this tension can be felt through and through. It is only unfortunately the Greek people who again once more in their history avoid and neglect to see the truth at their own peril. God help Greece, I only wish the best but fear the worst.

  • “The country would likely be locked out of the capital markets, unable to raise new funds”

    If Greece had its own currency by construction all of Drahma would come from the Greek government (except counterfeits) – so “raising new funds” abroad is a logical impossibility anyway.

    Greece should exit the Euro and go back to full employment immediately. Battling corruption, nepotism and low productivity are medium term tasks.

  • Please Yanis, have a chat with Richard Werner (“Princes of the Yen”) who knows how the Japanese Central Bank has guided Japan to a prosperous state after WW2 up to 1965 without the Government of Japan having to lend any money. The money needed by the government was created without debt (and without interest) en spend by the government in to existence. http://princesoftheyen.com/ as a documentary is now free to view for all. You can do like the Swiss who have the Swiss Frank next to there national Wir-Frank: http://www.wir.ch It will give companies the means to produce and the workers the means to spend without much need of the Euro.
    Good luck!

  • Ain’t gonna be long before Minister/Professor Yanisv starts blaming the Jews.

    • Seriously? Fine if you disagree with him, but we’re being given the opportunity to get insight into a very unique mind and you’re writing unhelpful comments like that?

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