Brexit will hasten collapse of European Union

04/03/2016 by

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.


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