EU, Brexit, Greece, the Left’s relationship with the State & Ireland: Long interview with Ben Lowry

25/02/2017 by


For the first part of the interview on News Letter’s site click here. For the second part here. Or…

Yanis Varoufakis: The EU might be doomed but I opposed Brexit even so

YANIS VAROUFAKIS was Greece’s finance minister in 2015 when the country was on the verge of being pushed out of the euro, visited Belfast last week to promote a pan-European movement DiEM25. The man who has described himself as an “erratic Marxist” spoke to News Leter deputy editor BEN LOWRY. This is the first of a three-part interview: Yanis Varoufakis is both a Eurosceptic and a Euro federalist.

The left-wing economist and thinker, who was Greece’s flamboyant finance minister at the height of the 2015 euro crisis in the country, is opposed to the European Union as it currently stands but ultimately he wants to see a Europe without borders. Varoufakis, 56, spoke to the News Letter on Friday, hours before his talk at Belfast’s Crescent Arts centre as part of his work with Diem 25 – a new movement that says it has a ‘simple, but radical, idea: to democratise Europe’. Varoufakis stayed up all night on June 23 into June 24 in Greece, to watch the results from the UK referendum. How did he feel in his heart at the Brexit outcome?

“Well I have to say that I allowed myself a few moments of satisfaction at the thought of all that egg on the establishment’s face,” he says.

Varoufakis had campaigned across the UK in favour of Remain, but did not come to this Province. “I didn’t need to because Northern Ireland was in the bag.”

He speculates that the leading Conservative politician Boris Johnson was not in heart a convinced Leave supporter but backed Brexit on the grounds that the country would narrowly reject it, and he would become Tory leader “without having to deal with Brexit”, but on the strength of the Brexiteer feeling in the Conservative Party. “And he collapsed after the result because he realised he would have to deal with Brexit and it’s an impossible conundrum.” Why so hard? “The disentangling any European country from the EU is, you know I keep quoting Hotel California, you can check out any time you like but you can never leave.

“There are ways of doing it but it would take more than a decade to do it properly.” Varoufakis was only Greece’s finance minister for six months but became famous for his glamorous image and unconventional approach. He was the rock star economist-politician, defying the Euro elites on behalf of Greece’s radical Syriza party. Varoufakis led the Greek resistance to the demands of Greece’s creditors during the financial crisis in the country of that year, one of a number of crises in Greece that have led to ongoing fears that it will have to crash out of the single currency or be pushed out. His tenure in the finance post ended that summer when Athens failed to strike a deal with the creditors and called a referendum on whether to agree to demands of the European Commission (EC), the International Monetary Fund. The country said no, the result that Varoufakis had campaigned for, but he resigned anyway. It later emerged that this was because the Prime Minister Alexis Tsipras was going to surrender to creditor demands in any event.

It is his experience of negotiating with the EU that makes him so convinced that Brexit will be so difficult. “Any attempt to do it quickly is going to be a nightmare and the most important difficulty is that it is impossible to negotiate with Brussels,” he says. “I know that personally. There will be no negotiations between London and Brussels, anyone who tells you otherwise is either lying or they don’t know how Brussels works.” The problem, he explains, is that there is no clear leader with whom to negotiate – the problem cited by the American powerbroker Henry Kissinger who once asked: “Who do I call if I want to call Europe?”

Varoufakis says: “If Jean-Claude Juncker [president of the EC] and I agreed on something, and we did agree on many things, with the Commission, when he wanted to help me I knew I was going to be clobbered by Berlin, not so much because Berlin had a problem with me but because they wanted to teach Juncker a lesson, that he should not overstep his mark. “Then in Berlin who do you speak to? Angela Merkel [the chancellor] or Wolfgang Schäuble [German finance minister]? They loathe one another. You find a common ground with Merkel, Schäuble will find a way of undermining it.”

But does this lack of strong core at the heart of the EU mean that the very entity is doomed? “Well the way it is going yes,” he says. “It can be rationalised, it can be civilised and it can be rendered sustainable. “Technically it is really very straightforward to do but given the political forces at work it seems pretty doomed to me.” The ideal of a single country called Europe appeals to Varoufakis, and that is why he gave his weight to the campaign to persuade British voters not to leave the EU.

Asked his views on Irish unity and whether or not it is legitimate for unionists in Northern Ireland to want to be part of the UK (see more on his answer to that tomorrow) he says that he will tell anyone what identity they should have, and adds: “My view would be that, ideally, Europe should be one country and then this discussion doesn’t happen.” Borders, he says, do not make for happy families and happy societies anywhere. So he would to see like a federal Europe? “Yes, absolutely.” Like America with countries becoming like the states in the US? “We could create a federation that has never happened before. A better federation than the ones the Americans have. The Americans don’t have an idea for theirs, just look at Trump, but I think, so [a federal Europe] would be my first view.”

Specifically in Northern Ireland, it would be “criminal” to do anything to jeopardise the Good Friday Agreement. “Bringing back a border and having Northern Ireland be committed to the Brexiteer frenzy coming from the other side of the pond would be madness.” Varoufakis has a similarly ambivalent view of the single currency that he has to the whole of the EU. That it is, in practice, deeply flawed but that deciding to leave altogether is a step too far. “I campaigned in the 1990s against joining the euro, but it is one thing to say you should not get in, it is another thing to say you should get out.”

He explains. “I keep thinking in terms of Indiana Jones movies when Indiana Jones rushes into a building and behind him the pathway collapses, and if he tries to reverse he is not going to back to where he was – he will fall off a cliff.” If Greece had not joined the euro the country “would still be quasi corrupt, it would still be rather inefficient, Greeks would still laze around the cafes, but there would be no crisis”. From 1998 to 2008 there would have been tepid economic growth rather than the “ponzi growth” there was in the country and in the Irish Republic. “Then in 2008 it would devaluation of the drachma, short recession about a year, and then Greece would go back to its own ways and you and I would not be having this conversation. “This is a structural, systemic failure of the eurozone.” What was the reaction of the man in the street to Brexit? Was it big news over there? “For them the pain is so much, so great in Greece over what is happening there that people shrugged their shoulders and said: yeah, they, the EU establishment, had it coming.”

• Yanis Varoufakis was briefly one of the most famous politicians in the world but does not miss being finance minister: “No. I never wanted to be finance minister,” he says. “I did it as a chore.” As an academic, he “never understood why people want to be head of department, or dean or chancellor”. “Who wants to be that? If you want to be a manager, why be in universities. But of course somebody had to do it and if you did it as a chore for a couple of years, as a public service to your community, that’s fine. But anybody who really wanted to be head of department should be fired because you shouldn’t be a professor if you wanted to be head of department. “That is my view about politics. Anybody who wants to be minister is a very dangerous person. You should only do it as public service for a short period of time and then get out.” But do ministers not need experience? “No, you don’t want people with experience in politics. It is not engineering where you need experience. If you want to build a bridge you need an experienced engineer to do it. “An experienced politician, what does that mean? Politics is a business in democracies of dialogue and debate and bringing together.” So how does the ultimate outsider President Trump fit into that? Is he maybe not the worst thing from Varoufakis’ perspective? “No, he’s a terrible thing from my perspective, because he ticks many of the boxes that I would approve of to do the wrong thing.”

• In the second and third part of this interview, to be put online soon, Yanis Varoufakis talks about why Marxists are not necessarily pro large public sectors and gives his thoughts on the IRA – See below:

We leftists are not necessarily pro public sector – Marx was anti state

YANIS VAROUFAKIS, Greece’s finance minister in 2015 when the country was on the verge of being pushed out of the euro, spoke to BEN LOWRY last week on a visit to Belfast to promote a pan-European movement DiEM25. This is the second of a three-part interview:

Ben Lowry: What about the selfishness of societies that have very high public sectors, where people go into jobs, there is not a lot of performance management, and so on, it costs a huge amount of money that has to be extracted from taxes on tobacco and stuff and a lot of poor people end up subsidising it? Northern Ireland’s economy is totally dependent on Britain, I’m not suggesting Greece has a benefactor like that, I’m not saying they are entirely comparable. Is there not a left wing critique that is critical of large public sectors?

Yanis Varoufakis: Of course. Remember that Marx was anti state. The libertarian streak of Marx, his idea of society would be one in which the state withers so you can’t be a genuine left winger and believe in the state (Varoufakis laughs at this observation). You need to use the state as an instrument in order to wean yourself off the state and in order to bring about a kind of mode of production and distribution whereby we can be independent of the state and independent of capital.

BL: But has any society ever done that?

YV: No but then again if we were having this discussion in the 19th century about slavery and the anti-slavery movement you would say to me: well, there has never been a society without slavery, so why are you against slavery? Just the fact that we have never done it before doesn’t mean we cannot do it.

Greece famously has a large public sector, high levels of idleness, enforced idleness, underemployment, unemployment and so on and high debt, public debt. The Greece I grew up in was not like that. We had one of the smallest states in Europe, and we had next to no debt, our state had miniscule debt and the private sector had none, none, I mean the Greece I grew up in didn’t know about credit cards, personal loans or even mortgages. My parents would never imagine to get a mortgage to buy a house. They worked, and when they had enough money in the bank they would buy a house. That’s it. And if they were going to get a loan they would get it from their aunt, their sister.

.. [In the 1950s and 60s] the place was miserable, authoritarian, corrupt, but nevertheless it was growing and there was no debt. The state was small. [Varoufakis explains that this all changed due to the oil crisis of the 1970s and the collapse of a right wing regime, which had become increasingly authoritarian and so increasingly unpopular until it lost power. There was a huge rise in prices. But the new democratic government was trying to enter he European Economic Community (later to become the EU) and had to scarp tariffs on industry.]

YV: All the factories closed down. Every single one of them almost closed down in a country where there was no welfare state. The private sector collapsed and therefore the government was put under a lot of pressure, it doesn’t matter who was in government, to shift people from the private sector, that couldn’t support them, to the public sector, because there was no social, there was no safety net. So suddenly the state began either taking over bankrupt companies and keeping them alive with public borrowing or employing them directly so suddenly you had a public debt problem in Greece and a large public sector.

BL: So Greece has had it ever since? YV: That’s right … So what I am saying here is, yes of course, this is a left wing critique of the large public sector in Greece but it is not one on principle, it is one on the history and how it happened. We have a failure of capitalism. The public sector increase is not because of socialism but because of a failure of capitalism.

BL: Are you one of those people, like the US economist Paul Krugman, who does not think high government debt is necessarily a problem anyway?

YV: Yes, high debt is not the problem, the problem is the inability to roll it over.

BL: Last year I got the train to Thessaloniki. I’d been to Greece a few years before. This is anecdotal, so bear with me, but it has the feel of a wealthy country. When I stopped in Serbia, it doesn’t – run-down trains, like in the 1950s, poor infrastructure, roads, cars, shops that didn’t sell anything, the clothes people wore. It is not like that in Greece – first world, cars, people in cafes, it is not cheap,and not just the tourist spots. Obviously Greece has horrendous youth unemployment, serious problems. But if one was to play devil’s advocate and say this is a culture that likes to live well but doesn’t want to pay taxes?

YV: That misses the point. Well, no-one likes paying taxes. A certain gentleman won president of the United States by advocating that he’s very smart because he doesn’t pay income tax. Remember that? It happens in the best of families. The fact of the matter now is that if look at some basic numbers in Greece they reveal a humanitarian crisis behind the facade of a well-off society. One in two families has no-one working in it and they only survive on the basis of a very small and shrinking pension – 35% of paid labour is undeclared, not because the workers don’t want to declare it but because if the employer is forced to declare it they will go bust. Because they are already bust. Half a million people today have not been paid for more than eight months while still working. So we have a failed economy. We have a bankrupt state in the sense that it has debts that it cannot rollover, we have bankrupt banks, we have bankrupt companies, and we have bankrupt families. The state is in arrears to its citizens of serious amounts, you know tax returns and VAT returns and payments to suppliers for drugs to hospitals and materials for schools and to developers for roads that were built some time ago, the state is not paying, so it is in arrears with society, and society is in arrears with the state to the tune of 60% of GDP – 60% of Greece’s GDP is owed by citizens to the state and it is not because they don’t want to pay their taxes, they just can’t. Let me, allow me to put it succinctly, everyone owes to everyone and no-one can pay.

BL: What is happening globally. Why this turbulence, these extraordinary things – Brexit, Trump, Syriza?

YV: It is a big question but an easy one to answer epigrammatically – 2008 was our generation’s 1929 and just like then the establishment was clueless before and clueless after the financial sector collapse and spearheaded a process very, very similar to back then.

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