A former minister’s account of how Greece handled a financial meltdown is a tell-all political memoir like no other
Whether it is agricultural policies that hurt farmers’ interests or labour ‘reforms’ that erode workers’ rights, or welfare cuts that hurt the poor, it has been seen time and again in democracies around the world that all political parties, regardless of their electoral promises and ideological persuasions, invariably adopt the same economic policies that caused their predecessors in power to be voted out.
No country has exemplified this phenomenon more spectacularly than Greece. In January 2015, fed up after five years of austerity, the Greeks voted for the radical left Syriza party. Syriza had campaigned on a singularly anti-austerity, anti-troika platform. [The ‘troika’ being the moniker for the triumvirate of Greece’s creditors—the European Commission (EC), the European Central Bank (ECB), and the International Monetary Fund (IMF)].
In July 2015, within days of a referendum in which the Greeks voted overwhelmingly against a bailout deal with the troika, the left-wing Syriza government headed by a communist, Alexis Tsipras, betrayed its people by signing a draconian austerity package that would have made even its neo-liberal predecessors shudder in horror.
How could a democratic mandate be so casually binned at the behest of a bunch of unelected technocrats—which is what bureaucrats of the European Commission, the ECB and the IMF are?
In Adults In The Room: My Battle With Europe’s Deep Establishment, Yanis Varoufakis offers a ringside view of the inner workings of political power, which rests, as he discovers, not in the hands of elected representatives but with a tiny cabal of international financiers and power-brokers. For this global power elite—the eponymous “deep establishment”—democracy is a necessary evil that must be humoured once every five years through the spectacle of a general election while governments do as they are told. This is a matter of common sense if you are an ‘insider’. But then, if you are an ‘insider’, you would not talk about it.
Varoufakis is an outsider—a professor of economics at the University of Athens. But circumstances, and a well-intentioned prime minister, catapult him into the midst of seasoned insiders. He served as Greece’s finance minister in the Syriza cabinet from January to July 2015. He was offered the job, and he took it, to accomplish one mission: renegotiate Greece’s bailout agreement so that Syriza could ease the austerity imposed on the Greeks.
It doesn’t take long for Varoufakis to realise that Greece’s creditors are not interested in serious negotiations. They want nothing short of capitulation to the terms laid out by them. When Varoufakis doesn’t surrender, they threaten Greece with a liquidity crisis.
Varoufakis’ moment of reckoning arrives one spring night in April 2015, in a hotel bar in Washington DC. A sympathetic friend had fixed him a meeting with a formidable yet unlikely ally, Larry Summers. Varoufakis had worked briefly in the United States and knew that the former US Treasury Secretary was one of the most influential men in the power corridors of Washington DC, Wall Street, and beyond. If he managed to convince him, Summers could not only help in securing some urgent liquidity for Greece but also lean on the troika negotiators to soften their stand.
As they chat for a couple of hours over whiskey, the two economists find themselves in agreement on how best to revive the sick Greek economy. But Varoufakis must first pass a test to prove himself worthy of his assistance. He must give the correct answer to the American’s trillion dollar (literally) question.
“There are two kinds of politicians,” Summers tells the Greek. “Insiders and outsiders. The outsiders prioritise their freedom to speak their version of the truth. The price of their freedom is that they are ignored by the insiders, who make the important decisions. The insiders….never turn against other insiders and never talk to outsiders about what insiders say or do.” Their reward? The power to influence outcomes. “So Yanis,” Summers asks, “which of the two are you?”
Varoufakis would not lie, but neither could he give the wrong answer and shut the door on his last hope. He ends up prevaricating. His answer – that he would act like an insider to ensure Greece’s recovery—isn’t good enough for the wily Summers, who concludes, correctly, as this book now proves, that Varoufakis cannot be trusted to be an insider.
Varoufakis has to confront the wolves of EC, ECB and IMF on his own. He might have stood a chance of salvaging a decent deal if it weren’t for two factors: the troika’s infiltration of Varoufakis’ own negotiating team; and Angela Merkel. Seasoned political grandmaster that she is, the German chancellor outplays Tsipras as if he were a school boy, leading him on before turning the tables on him.
Ultimately Varoufakis fails only because Tsipras fails to honour their “covenant”. The reasons for the Greek prime minister’s betrayal – both of his friend and his countrymen—are complex, and Varoufakis comes up with an intriguingly flattering, if none too convincing, explanation.
Though a memoir, this is a work of novelistic intensity and power. It reads like a thriller, and what’s more, all the characters are from real life. We get candid portraits of the most famous names in European politics—Angela Merkel, Emmanuel Macron, Wolfgang Schauble, Christine Lagarde—and also of lesser known but powerful players such as Thomas Wieser, president of the Eurogroup working group, and Mario Draghi, the ECB president. Even Obama has a small but memorable cameo.
Varoufakis had the foresight to secretly record the many inter-ministerial meetings, summits, and telephone conversations with prime ministers and EU officials. So his extended replays of who said what to whom are not only accurate and detailed, they are disturbing in the way that only truth can be.
And the truth, in Varoufakis’ telling, is that the European Union is a supremely undemocratic arrangement. It is an instrument controlled by a global oligarchy that has infiltrated every government with trusted “insiders” who could be counted on to insulate their interests from the vagaries of democracy.
At 560 pages, Adults in the Room is not a quick read, but it’s an essential one for anyone interested in understanding contemporary statecraft, and the vast gap between what is reported in the media and what actually transpires behind the scenes.
Adults in the Room: My Battle With Europe’s Deep Establishment; Yanis Varoufakis, Bodley Head, ₹1,840.