He’s been described as the George Clooney of the government, a rockstar politician who took on the EU and an “erratic Marxist.” Few politicians can hope – or fear – to achieve the levels of notoriety Yanis Varoufakis did in just six months while serving as finance minister of Greece. A world-renowned economist, Varoufakis now spends his time agitating against the establishment, whether it be through setting out alternatives to capitalism in his latest book, Another Now, where he imagines a world without billionaires and stock markets or through his The Democracy in Europe Movement 2025, which aims to, in his words, democratize the EU before it disintegrates.
He is no stranger to emergencies either. Varoufakis was at the center of the Eurozone crisis as finance minister of Greece, a crisis that saw the country subjected to the biggest financial rescue of a bankrupt country in history. As countries around the world experience an economic slump and as millions lose their jobs, he has a warning for the U.S. about why the forces of “Trumpism” may get stronger as a result.
In an exclusive interview with Newsweek International, Varoufakis gives his thoughts on why he believes the Democratic Party could turn in on itself, resulting in an “existential crisis for the left”, how he thinks the rivalry between the U.S. and China could play out and whether he believes the GameStop saga was a revolutionary moment in the fight against capitalism. Still a member of parliament in Greece, while Varoufakis is delighted Donald Trump lost the election, he is reluctant to be too optimistic.
“The wave of enthusiasm regarding the Biden administration has not washed over me,” he says. “I’m glad Trump is out, but at the very same time I’m very worried that Trumpism is going to get stronger. I’m very worried that the Democratic Party is in the process of turning in on itself, of divisions between the establishment figures, those who were effectively supported by Wall Street to become senators or congressmen or presidents for that matter and the socialists.
“The clash is already there, the blame game has begun. While the Trumpists are more united than ever, they’re going to be aided and abetted by two things. First, the [financial] slump which is unavoidable given the pandemic, they will be blaming it on the system and the swamp that has taken over again and a false but real sense that they have, false in the sense that it’s untrue but real in the sense they do feel it, that they were robbed of the election.
“So this combination, solidity on the Trumpist side, political economy which is strengthening their feeling and their unity and the fragmentation of the Democratic side which is only going to get worse as we’re moving towards the congressional elections two years from now. That for me is the great danger.”
Varoufakis doesn’t believe that the Biden-Harris ticket will improve outcomes for the poor or radically redistribute wealth. Nearly eight million Americans, many of them children and minorities, have fallen into poverty since May last year as the pandemic took its toll, according to Columbia University research. While Biden is intent on passing a $1.9 trillion economic rescue package that aims to provide more aid for the unemployed and those facing eviction, Varoufakis doesn’t think it will go far enough.
He says: “Bernie Sanders has effectively bent over backwards in order to lead in the Senate with the Biden agenda on his shoulders. I can see why he’s doing it because he’s trying to use the moment, this moment in history in order to extract as many benefits as possible, Medicare, on the stimulus program, but I feel this will fail because in the end the stimulus program will be tepid. It’s going to benefit the large corporations it is not going to come with anything near the green new deal aspects of the policy that was agreed between Bernie’s team and Biden’s team.
“All those plans for a massive green works program are going to fade away, what is going to be left of them is not going to make any substantial dent on climate change, the Medicare for All program is not even on the table. There will be, due to Bernie’s intervention, substantial medical benefits for the many but only during the pandemic and then they will be withdrawn. By that time, it will be very very difficult for leftists who knocked on doors during the election campaign saying to people ‘come on come out vote for Biden’, bringing the vote out of people that were not going to otherwise vote for Biden, it will be very difficult to explain to them in two years’ time, why they did it. When there will be very little left.
“The whole Democratic party is going to coalesce around Clinton/Obama, Larry Summers kind of narrative austerity will be back on the table because of public debt and the natural tendency of Biden people to balance the books, which we saw under Clinton in the 90s and that’s when the left is going to have an existentialist crisis.”
His support of Sanders is perhaps unsurprising, given that they are both founding members of Progressive International, an international organization of left-wing activists and groups discussing and promoting the idea of a “post-capitalist society”. Varoufakis’ ideas have been criticized by the right as “leftist snake oil” and by some economists as “lucid but flawed” but he is one of the biggest names of economic thinking on the left and it’s clear that he believes politicians like Biden are only tinkering around the edges when it comes to capitalism and he wants to see it reformed entirely.
Biden has pledged to fight economic inequality, in particular racial economic inequality, through his $1.9 trillion rescue package. Biden has previously said: “If we invest now – boldly, smartly, with unwavering focus on American workers and families – we will strengthen our economy, reduce inequality and put our nation’s long-term finances on the most sustainable course.”
Did the GameStop saga, in which an army of amateur investors took on multi-billion dollar hedge funds, deciding to buy up GameStop shares to send the share price of the company rocketing to astronomical levels causing losses for short-sellers, give the likes of Varoufakis hope that collective action from people could take on capitalism? Was it the start of a revolutionary moment?
“This is not a revolution,” he says. There’s no doubt about that but there are elements that are very interesting and secondly yes there are elements which do present themselves as bits of hope that financial engineering can be used as part of collective action to bring about a better world.”
Although Varoufakis accepts that most people who did get involved in buying up shares of GameStop did so to make money rather than for purely ideological reasons aimed at challenging capitalism, he believes there were enough people motivated by a desire to take on the big beasts of Wall Street. “The internet and financial engineering will be the new realm of collective action for the 21st century,” he says.
Varoufakis, 59, claims capitalism has been state driven and that China has given it its biggest drive. Yet while he believes Biden will achieve a state of détente with China, finding some common ground on the economic front, he argues there could be problems on the military front.
“The rivalry [between China and the U.S.] will continue, it was not Trump who created it, he gave it a particular slant,” he says. “Trump was trying to rip up the supply chains between China and the U.S., the Democrats are not interested in that, on one level there is going to be a détente between Washington and Beijing. But at another level I fear the neocons who moved from Trump and the Republican Party to the Democratic Party and are now surrounding Biden, could easily spark off a military confrontation in the South China Sea.”
Varoufakis is known for being a fierce critic of the EU, comparing Greece’s creditors to “terrorists” and telling his fellow citizens to vote no in a referendum that asked Greeks whether they would accept the Eurozone’s terms for remaining in the single currency, terms which included further spending cuts and tax increases.
He has also previously criticized the bloc for being undemocratic and bureaucratic. The EU has been behind other countries when it comes to the vaccination program. While the U.K. has administered 14.9 doses per 100 people, the EU has managed just over two people. It recently tried to trigger an emergency provision in the Brexit agreement to control vaccine exports from the bloc, a decision it later reversed.
“The EU commission has been behaving as if they were on the payroll of Brexiteers with a remit to justify Brexit, it is astonishing, it’s a comedy of errors in Brussels,” says Varoufakis. “It’s as if it was designed by Eurosceptics in order to sanctify Brexit, it’s very difficult to argue against Brexit now if you look at the vaccination fiasco.
“You have eight times more people vaccinated in Britain as we speak than in Germany, don’t talk about Greece. It’s clear that Britain would have been hamstrung in that department had it not left the EU. Had it stayed in the EU you would have had to abide by the rules we Greeks have to abide by, the approval of the vaccines would have taken months longer than it did in the U.K., you would have one tenth of the vaccinations that you have so it is to Brexiteers delight what has been happening in the EU.
“Everything I now hear from Brussels is now so reminiscent of what was going on during the Euro crisis, the blame game, the Commission trying to cover bad decisions by making worse decisions, disarray, nationalism, fragmentation, I fought against Brexit, but I have to say there is a little bit of egg on my face as we speak because I can’t in all honesty say to you that I don’t regret supporting Remain five years ago, it would be dishonest of me to say that.”
But while Varoufakis reels over Remain, he argues that leaving the EU will ultimately harm Britain too. “By Britain leaving the EU, the EU becomes more toxic, more prone to errors and more of a failure. Given that Britain is next to the EU, this is going to have secondary effects on Britain that will be very negative,” he says.
“Maybe now it has shielded itself from the stupidity of the commission when it comes to vaccination, but you cannot shield yourselves from an EU crisis that is going to get deeper as a result of Brexit. But that’s a difficult argument to put to the electorate.”
Before the interview ends, Varoufakis says he fears a return to austerity measures for countries with large public debts, the devastating effects of which he says he saw firsthand in Greece. For people living in countries at risk of public spending cuts, he urges: “Send a message to the governments that if you make a mistake of turning austerian, you’re done, you’re toast politically.”
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