Brexit will hasten collapse of European Union

YV in Global Financial Markets forum, Abu Dhabi March 2016

Brexit risks hastening the collapse of the European Union and plunging the continent into the chaos of the 1930s, said Yanis Varoufakis, the former Greek finance minister.

The academic economist, who was briefly in charge of the country’s finance ministry at the height of the Eurozone crisis, delivered the warning to a high profile audience of business leaders at the Global Financial Markets Forum in Abu Dhabi.

British prime minister David Cameron has set June 23rd as the date for a referendum on the country’s membership of the European Union.

“The disintegration of the European Union will push us in to the…1930s,” Varoufakis said, predicting “a deflationary Deutsche Mark zone east of the Rhine and North of the Alps which would leave millions of working poor unemployed, and send the rest of Europe to “a cesspool of very high inflation”.

“The only people who will benefit from that will be the ultranationalists – the Marine Le Pens, the Golden Dawns,” he said.

While Mr Varoufakis said that he would be tempted to vote to leave the European Union, were he to have a vote, in order to give Brussels and Cameron “a bloody nose”, he said that a vote to leave would turn Europe into “that kind of divided continent that would become a black hole that would consume Britain as well”.

“So it is not in the interest of Britain to get out of this terrible Europe,”

Mr Varoufakis argued that many British politicians in the Brexit camp didn’t understand how leaving the EU would hurt the country’s membership of the Single Market, which sees European states cooporate to write rules to promote free trade across the continent.

EU member states make laws governing many aspects of business across the continent. Were the UK to leave the EU, it would be unable to influence these laws – but if it wished to remain in the Single Market, the UK would have to accept European legislation on commercial issues.

“So by leaving the EU while staying in the Single Market, you’re effectively deferring to an alien force in Brussels which is collapsing because you’ve left. How clever is that?”

Mr Varoufakis said that Europeans have a moral duty to resist the disintegration of the EU. “Last time we crashed and burned in Europe we produced the Holocaust, we produced tens of millions of dead people.

“Even though the 1950s was a golden age, I don’t think we have the moral authority to say that we can or ought to sacrifice a whole generation so that something better can come out of it.”

“I think it is our moral duty to put an end to this disintegration process. Will we succeed? It doesn’t matter. Death is sure, but that doesn’t mean we shouldn’t wake up every morning full of joy and optimism, which [are] based on no evidence whatsoever.”

Yanis Varoufakis was Greece’s finance minister following the election of anti-austerity party Syriza in January 2015. He led negotiations between Greece and its ‘Troika’ of creditors – The IMF, the European Commission and the European Central Bank – which descended into acrimony after Greece rejected a bailout package and saw its banks shut off from ECB funds, leading the country to flirt with the collapse of its financial sector.



  • “…it is hardly controversial to suggest that our existing system of money, banking and finance already contains elements of a Ponzi scheme with a small minority of agents and institutions favorably placed to take profitable advantage of the rest of the people in the system…” – Ole Bjerg, Copenhagen Business School, 2016

  • I went to schools like the humble University of Pennsylvania. I am a former banker and I have always been on the political right in favor of the nation state, opposed to large concentration of power and favorable to decentralized political/ economic structures. I have always seen the European Union and particularly the Eurozone as an anathema and Greece in the Eurozone as sheer insanity. I view Greece as the homeland of Greeks (which was the concept of the Greek Revolution of 1821 and not a multiracial, multicultural melting pot like an Australia or US. Finally, I belong to the Orthodox Faith, take communion regularly and oppose same sex marriages and abortions.

    So probably on this basis, you would not speak to me nor consider me anything more than an inferior ignorant racist bigot. This is the problem of people from the political Left and Greek academia….

    For someone who is an academic, it seems to me that you ought to be broader minded about where things are headed and less locked into your ideological narrative about the EU super state and the matter of the 1930’s. Frankly the biggest inherent risk is the whole structure and concept of the Eurozone and European Union itself. Germany with its wacky economic policies together with the arrogant and pompous bureaucrats in Eurogroup have long ago put Europe in the same deflationary tragectory as happened in the 1930’s. The Eurozone is effectively another Gold Standard system, but far worse because of the impediments to leave it to reflate.

    I do not think it all all realistic that the EU can be democratized nor 28 diverse countries all live in a box that dictated by the Brussels Bureaucrats and to a large extent, their wacky German masters.

    This whole experiment has wrecked irreparably Greece by destroying what little was left of its eroding productive base, saddling Greece with even more unsustainable Ponzi debt, demoralizing the country by years of brainwashing to become Bourgeois Gentilhomme Europeans instead of Orthodox Greeks with their own cultural heritage and their own decent productive base in harmony with their regional trading partners.

    Now this EU clusterfuck, the Syrian tragedy and Turkish people trafficking together with a totally incompetent Greek-hating Atheist government has resulted in flooding Greece with mostly Muslim migrants, totally destabilizing the weak demographics, so that Greece will degenerate literally into another Kosovo. OK, the Greek Left never recognized that Greeks were a people and had national identity. They always saw Greece as simply a geographical space in the Balkans. So they are jumping with joy along with their European partners about these migrants.

    BREXIT is a very logical step for the UK. Wisely the Bank of England opposed getting into the Eurozone, Michael Pettis has been predicting for years that the EU and particularly the Eurozone would start to break up. We all know that the globalization cycle ended effectively by the GFC of 2008 and is over. The EU is based on outdated concepts. The Eurozone was always a time bomb. Milton Friedman explained this years ago in his debate with Robert Mundell. Even Mundell lately is beginning to see the handwriting on the wall. Greece certainly never belonged in the Eurozone.

    Perhaps the sensible approach would be to prepare for this break up in an orderly, consensual way, instead of stubbornly fighting the inevitable or trying to chase concepts that just will not work. Seems to me just as an impossible pursuit as democratizing the Soviet Union or the Hapsburg Empire! In the case of the Ottomans, there were the New Turks and their reform movement. None of this sort of effort can possibly change the inevitable about this putrid, rotting system in Brussels.

    The more reasonable approach is to accept its demise and damage control. Even Nouriel Roubini some years ago has suggested a sort of living will for the Eurozone to avoid total catastrophe before it was too late and events took their course.

    • Your name does reveal a ‘non’ Greek identity. However, the aspect about comparing Greece (and other historical nation spaces) and my country, Australia, is very apt, and is too easily ignored.

    • The EU since 2008 has already successfully replicated the 1930s. “Been there, done that”. We are now firmly in 1939 and rapidly being propelled into war against Russia by external interests – a Russia that some non-European countries falsely claim is an aggressor, but not us. War with Russia is definitely not the Europeans’ choice nor inclination…hence the weaponised migration underway.

      Yani, if you argued that as a united EU we could stand up to these external pressures that threaten our safety, if you dared talk about the reality of this dire situation, you might convince. However it is clear that the EU commission is firmly a creature of NATO, and without totally different leaders this will not change. Diddling around with the nonexistent democracy mechanics of a corrupt and broken EU – designed from scratch (externally) in all its details to function as a non-democratic superstate – is by now to miss the point entirely: the battle lies elsewhere.

      Capodistrias, Greece’s first Greek governor, wrote the Swiss constitution (and later the Serbian) with Greece in mind: decentralized direct democracy and secondly and equally important, neutrality. He is still absolutely correct, never more so than today.

      He fought FOR sovereignty, constitutions and the nation state as a first principle and reality for all the nations of Europe. In his view only sovereignty and the rule of international law could safeguard the peace, wealth, culture, language, religion, ethics and unique ethnic peculiarities of Europe’s various peoples.

      He fought AGAINST empire, extraction (robbery) and the hegemonic lawlessness of such as the Hapsburgs, which – in a nutshell – is the EU conception today. The EU as an imposed EUSA / EUSSR of “regions” – far from safeguarding Europe’s peoples or the peace – is simply a reversion to the destructive, lawless monarchic Europe of the Congress of Vienna.

  • If Brexit hastens the collapse of the EU then it’s a very good thing and should be pursued with vigor until the german economy is totally destroyed as it should for the good of humanity.