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Audio – Presented by Phillip Adam – ABC Australia

What does the near future hold for Greece, its Prime Minister and the former Finance Minister?
Former Greek finance minister Yanis Varoufakis gives his first post-resignation interview

Posted July 14, 2015
Interview Transcript

Phillip Adams: …”have to look at Greece where there may (not) be much to eat of any sort.

A week ago a group of very high profile progressive economists, Stiglitz et al wrote an open letter to German Chancellor Angela Merkel saying ‘right now the Greek government is being asked to put a gun to its head and pull the trigger’ and the past week hasn’t changed that scenario. Greece went very close to pulling that trigger when it went to Brussels with a suite of suggestions that many saw as capitulation and a betrayal of the previous weeks no vote in the referendum, but as we’ve heard the third bailout deal has been struck to keep Greece within the Euro zone and already the labour minister has denounced the terms and reported that the conditions are so tough, so rough that it poses a perhaps an impossible political task for the Prime Minister. Former Finance Minister, our old friend Yanis Varoufakis joins me now for his first, his first post resignation interview. Now I’ve gotta ask you this Yanis, did you jump or were you pushed?”

Yanis Varoufakis: “Something in between, I jumped more than I was pushed. On the night of the referendum Phillip, I entered the Prime ministerial office elated, I was travelling on a beautiful cloud pushed by the beautiful winds of the public’s enthusiasm for the victory of Greek democracy during that referendum. The moment I entered the prime ministerial office, I sensed immediately a certain sense of resignation, a negatively charged atmosphere and um I was confronted with ah an air of defeat which was completely at odds with what was happening outside and at that point I had to put it to the Prime Minister ‘if you want to use the buzz of democracy outside the gates of this splendid building you can kind count on me but if on the other hand you feel you cannot manage you cannot handle the big this majestic no to a rather irrational proposition from our European partners ah then I’m simply going to steal into the night’ and I could see that he didn’t have an attitude, an attitude, he simply didn’t have what it took sentimentally, emotionally, at that moment, to carry that no vote to Europe, to use it as a weapon, so I in the best of possible spirits, the two of us get on remarkably well and will continue to get on I hope, um I decided to give him ah the leeway that he needs in order to go back to Brussels and strike what he knows to be an impossible deal, a deal that is simply not viable.

Phillip Adams: “Is that why you’ve ah disappeared from public view since”

Yanis Varoufakis: “Yes I thought that um the best support I could offer the Prime Minister and my dear colleague Euclid Tsakalotos who succeeded me in the Ministry of Finance was to keep quiet to send my best regards and my comradely wishes with some pieces of advice regarding particularly the kind of debt restructure that the country needs as a minimum requirement for retaining its hope for the future and to keep quiet while they were having a terrible time, an inhuman time, an inhumanly terrible time (laughs) in these meetings, I know very well what it feels like to walk in inside those neon lit heartless rooms full of apparatchiks and bureaucrats who have absolutely no interest in the human cost of decision-making and to have to struggle against them in order to come back with something that is palatable.”

Phillip Adams: “You’ve paid a very heavy personal price, it’s been quite extraordinary watching your political enemies in Europe focus on you again and again and again and hammer away at you with every tool in the box”

Yanis Varoufakis: “Well I had to pay the price Phillip I’m quite happy to have paid that price I paid it with pride, of having killed of having killed the troika, remember one of the first meetings that I had in office was with the president of the Euro group Mr Yereon Djoeselbloem and when I explained in public in the press conference that followed our meeting that Greece would no longer be subject to the invasions in our ministries of technocrats hellbent on determining the minutiae of every policy that is decided in Greece, I was told in no uncertain terms that I had just crossed a line and there was a public display of discord between us when he lent into my office and whispered you just killed the troika and I responded ‘I’m very glad to have done this’ this is why I was elected”…


Phillip Adams: …“Sorry. I interrupted, but will you stay in politics”

Yanis Varoufakis: “Of course I will. The decision to enter politics was a difficult one but I had to look at the electors in the eye and say to them that now I’m taking this plunge I’m not here, I’m not a fair weather sailor and I’m going to be for the course and I’m going to represent you through thick and thin, and in essence I’m much, I’m very much enjoying being a backbencher at the moment Phillip because I have a lot more room for manoeuvre and speaking the truth without having to worry about phrasing the truth in diplomatic terms, not that I did much of that, now I don’t even have to try, and I was rewarded with 145,000 votes, I got the most votes of any member of Parliament in Greece last January and I’m going to honour these hundred and forty thousand people”

Phillip Adams: “Oliver Hartwich was on the program the other night arguing that Greece should never have joined the EU; with the wisdom of hindsight do you agree”

Yanis Varoufakis: Well not just with hindsight, in the late 1990s, even though I was living in Australia in Sydney, if you recall, I was waging a campaign against Greece’s entering the Eurozone. The argument, that argument has never faded, I’ve always made the point that whereas it is extremely foolhardy and tough to get out of the Eurozone the Eurozone is not a member to which we which we would have belonged in the first place and by the way I did hear the Hartwich interview and you introduced him by saying that he would probably offer a very different view to mine but in the end he didn’t.

Phillip Adams: “Yeh um Ok now I go back to that strange meeting with your prime minister and his negativity. There is an argument oft stated that he wasn’t expecting a no vote”

Yanis Varoufakis: “Well I have to say that I wasn’t expecting no vote either, let me be clear on this, I knew that the moment we announced the referendum on that Friday night that if a referendum were to take place that night or the day after we would’ve won decisively but we also knew that the central bank, instructed by the Euro group, would punish us for being audacious enough to ask the Greek people to pass judgement on the ultimatum they had given us by shutting down the banks on Monday morning and given that the referendum would take place on the following Sunday after a whole week of banks that were boarded up and ATMs that would churn out a maximum of 60 euros per card per person per day I had assumed and I believe so had the Prime Minister that our support and the no vote would fade exponentially but the Greek people overcame fear, they set aside their pecuniary interests, they ignored the fact that their savings could not be accessed, and they gave a resounding majestic no to what was in the end an awful ultimatum on behalf of our European partners”

Phillip Adams: “Well this will make it all the harder for him to push it through to avert the state bankruptcies, he’s gotta do it in a rush, humiliation is piled on humiliation, tax er tax hikes, pension reforms spending cuts et cetera, he can’t win this can he”

Yanis Varoufakis: “Well this is indeed the politics of humiliation. The troika have made sure that they will make him eat every single word that he uttered in criticism of the troika over the last few years five years um not just these five months six months we have been in government but over the five years prior to that. This has nothing to do with economics Phillip, it’s got nothing to do with putting Greece back on the rails towards recovery, this is a new Versailles treaty which is haunting Europe again and the Prime Minister knows it the Prime Minister knows he’s damned if he does and his damned if he doesn’t”…


Phillip Adams: “let’s look at one of these things, one of the humiliations, Greece is to put all 50 billion euros of state assets in a trust beyond Greek reach under European supervision to be sold off to pay down debt, this is just sovereignty is just evaporating”

Yanis Varoufakis: “Well you’ll be around for long enough to remember the 1967 coup d’état, you will recall that the choice of weapon used in order to bring down democracy then was the tanks, well this time it was the banks, the banks were used by foreign powers to take over the government, 67 they used the tanks to take over the government the difference is now that this time there are also taking over all remaining public property, they are putting in a company that is going to be domiciled in Luxembourg (laughs), remember Lux licks, um and ah the Greek government is going to have to sell all of it according to a specified timetable, give 50% of it back to the troika for repaying unpayable debt, use another part of it to recapitalise the banks without ever having any control over the banks, the banks remain completely under the control of the oligarchs who brought the country to its knees a few years ago and only what if and when remains a few euros remain these sales and I can assure you that there won’t because the projected prices are just outrageously high, if that is not, that turns out to be untrue and a little bit of money is left that money is going to go into some kind of public investment but there will be none left, so this is ah um how should I put it, you are right it is a complete annulment of national sovereignty and the worst is”…


Phillip Adams: “You’ve got few very good turns of phrases ‘tanks and banks’ you’ve also come up with the notion of economic asphyxiation. Now this this asphyxiation has been going on steadily for almost 5 years”

Yanis Varoufakis: “That Is Correct. I call it something else to, do you remember I used the term which I think you liked a couple of years ago ‘fiscal waterboarding’ so imagine that the Greek government’s head is submerged in water, CIA like, and then the moment it’s about to perish, to die, you know it’s allowed to come up for a gasp of air and pushed back in the water of fiscal austerity, this is done in a variety of ways but what is going to follow in the next few weeks and months is going to be a far worse version of fiscal waterboarding Phillip”

Phillip Adams: “Well you may have some pleasure in the fact that Merkel’s got a few problems with this because if this manages to get through the Greek parliament there is no guarantee that German parliament will allow Merkel and Schauble to start talks on a bailout loan”

Yanis Varoufakis: “Which is amazing isn’t it. We have been asked to effectively humiliate ourselves as a government, to introduce all sorts of bills that run completely against our mandate on the promise that maybe the Bundestag is going to approve another bailout that is going to make our debt even more gargantuan that it is and our economy even less sustainable than it is. It is mind boggling, I don’t think that the European union has ever made a decision that undermines so fundamentally the project of European integration, its an outrageous defeat not just for Greece but for the European project and it was a defeat of the European project that was dished out by the European Union. This is going to be remembered by historians in the future in exactly the same way as the Versailles Treaty was in 1919”

Phillip Adams: “It’s a very interesting parallel. Now you’re not alone in being very unhappy with the backdown, I have named the labour minister in the introduction so the majority is now looking very wobbly, is it possible that a snap election could be on the cards?”

Yanis Varoufakis: “Well I wouldn’t rule it out. I haven’t spoken to Alexis Tsipras, I will speak to him soon, when he comes back he’s on his way back to Athens as we speak, I just want to see what is thinking”…


Phillip Adams: “Perhaps he won’t come back perhaps he’ll do a runner ”

Yanis Varoufakis: “Nah he’s not the he’s not the running type he will come back and he will face the music. I just can’t believe from the extent that I know him and I think I know him quite well that he will stand in front of parliament saying well this is the best I could do vote for it, maybe he will but I will be very surprised if he does that I’ll be very surprised if he wants to stay on as prime minister over you know this crime against Europe.”

Phillip Adams: “Schauble has been less than helpful of course he came into the weekend talks expecting and I quote ‘exceptionally difficult negotiations’ saying the figures the Greeks submitted were not believable while others were saying just the opposite. Can you explain why the finance minister seems to be seeking the dreaded Grexit.

Yanis Varoufakis: “I have a great deal of respect for Wolfgang Schauble, I think is the only person around the euro group that has a plan, I’ll just written an article about this which will appear in a German newspaper to???? on Thursday. Look Phillip, let’s be frank here, these are crucial moments, critical moments in European history and I don’t believe that will be judged anything other than harshly if we don’t speak out at this moment. Dr Schauble wants Grexit, he has been planning for it, he considered it to be an essential aspect of his plan for Europe, for a kind of political union that is now missing, a very specific kind of union, a disciplinarian one, one that is not a federation but one that is based on the capacity of a single fiscal overlord to veto national budgets and therefore to annul national sovereignty and he thinks that Grexit was essential for this because a Grexit would create the fear in the minds and hearts of French and Italian politicians in particular, to force them to acquiesce to the Schauble plan…


Phillip Adams: …” So you’re saying that Greece is simply a pawn on the board”

Yanis Varoufakis: “Well it is. So what we have here is a major clash of titans between Dr Schauble on the one hand and Paris and Rome on the other and the Chancellor Angela Merkel has not committed one way or the other and Dr Schauble who’s been around for a very long time, he’s been here in the centre of the euro project from its inception, he’s not happy with the way that monetary union was not accompanied by a political union, he would probably would like to have a federation but he feels that he doesn’t have the political power to create one so he’s trying to what he considers to be, not me, what he considers to be the second best which must in his mind involve a Grexit that will inspire sufficient fear in Paris and Rome and possibly in Berlin too, in order to bring about that disciplinarian negative political union, negative in the sense that the overlord, the you know, the equivalent of the Federal treasurer will only have negative powers, powers to veto national budgets not creative powers, powers to transfer surpluses and to do a Marshall plan let’s say and the reason I’m saying all this Phillip is not because I have a theory it’s because Dr Schauble has told me so.”

Phillip Adams: “I have to stop the flow to tell everyone who they’re listening to, the voice of Yanis Varoufakis who for many years has been our commentator on matters Grecian and this is LNL on RN. You, you you and I have joked or I’ve joked that you’re been rueful about it, the idea that going back to the drachma I was accusing you of secretly printing them in the cellar and you made the point on our last conversation that you’d been required to smash the machines, now if you do have to create a new currency from scratch you point out in a very fine essay, which I have in front of me, that in occupied Iraq the introduction of the new paper money took almost a year, 20 or so Boeing 747s, the mobilisation of US’s military might, three printing firms and hundreds of trucks. What’s happening, is there a plan for this?”

Yanis Varoufakis: “Well let me be open and clear on this, the introduction of a national currency, you just read an example of how hard it is, is a nightmare there’s no doubt about that, now as a responsible government, knowing full well that there was a very significant alliance within the eurogroup whose purpose was to throw us out of the euro, we had to make contingencies, we had to have a team, a small team of people in secret who would create the plan in case we were forced, not in case we chose, but in case we were forced to exit the monetary union known as the eurozone. Now of course you realise there is conundrum here. Once this plan begins to get implemented, that is you go from five people working on it to 500 which is a minimum you need in order to implement then it becomes public knowledge. The moment it becomes public moment, the power of prophecy creates a dynamic of its own and then you’re out of the euro before you realise it. We never made that transition from five to 500. We never felt we had a mandate to do this. We had never planned to do it. We had the, you know, the design on paper but it was never activated.”

Phillip Adams: “Yanis the Economist at the weekend argued for a temporary Grexit. If the Europeans allow the Greeks to issue script or temporarily to introduce an emergency parallel currency Greece might in effect suspend its membership of the single currency without technically leaving, a fantasy?”

Yanis Varoufakis: “Well if it is a fantasy it’s also Dr Schaubles fantasy because this is precisely what he proposed to me. This is what he proposed to me in a number of meetings we had, he proposed he called it ‘time out’, excuse the expression. For us it was a fantasy, the moment you begin the deconstruction of a monetary union you are unleashing powers that you cannot control and it takes incredible folly to think that you can control them and this is why we rejected the proposal its a proposal we would never have accepted as committed Europeanists, we believed, setting aside the very significant costs for the Greek social economy that this kind of plotting, this kind of stratagems, are part of the process of killing off European integration and its an outrageous defeat of the European project as I said before”

Philip Adams: “Quite a number of the leading economists as I mentioned earlier wrote the open letter to Merkel warning quote history will remember you for your actions, now isn’t she mindful that Germany was in an almost identical position after World War II and that the debt was forgiven”

Yanis Varoufakis: “Well this is a question you have to pose to her Phillip, I had hoped that she would, mind you, I’ve also been told by various German politicians and various German colleagues who are just as worried as I am about the impact of the last few months and years on European unity and Germany’s position in a united Europe, of being told that they decry the fact that the German political elite no longer contains somebody like Helmut Kohl somebody like Helmut Schmidt, that is, leaders who knew it in their bones that toying with the integrity of the European Union for strategic purposes was running in the face of the historical duty to remember the Second World War and the great efforts put into bringing about European unity after the end of the war and as you said what happened after the war was that the United States of America decided that bygones are bygones, Germany had to be rehabilitated, we remember the speech of hope that was delivered by Burns in 1946 in Stuttgart which effectively allowed the Germans to start believing again in the future in which their rewards would be commensurable with their efforts, this is what Greece has been asking for I even wrote an article asking for a speech of hope that Mrs Merkel could deliver in any city in Greece of her choosing that would mark a magnificent turnaround in Europe it would be the end of the euro crisis and the beginning of a new phase of European integration, instead of that we had the politics of humiliation and we had effectively terms of surrender being delivered to our Prime Minister who was being told either you sign on the dotted line or banks will never open again.

Phillip Adams: Angela Merkel is a dominatrix, Madam Lash. Now I know you podcast the program from time to time you might have heard us discussing the Argentinian default and as you know the warnings were dire that the country would spiral into permanent crisis, hyperinflation et cetera, that didn’t quite happen, is it possible Yanis that the effect of a Grexit are being overstated?”

Yanis Varoufakis: “Well up until now my answer would have been no, but reading the documents that was delivered to the Prime Minister and which he had to sign or else, this particular set of proposals about Greece now guarantee that even if they’re accepted by Parliament and even if they’re implemented fully our social economy is going to fade, shrivel and die. So I’m tempted to say that however awful Grexit might be where we have reached now, the point the juncture in which we found ourselves now, is not one that allows me to reject the notion that a Grexit might not be the worst possible outcomes and also let me make an analytical point, at the moment Phillip, we already have a quasi-departure from the euro if you were in Greece and you had your money in the bank you wouldn’t have access to it you would be able to shift it about using E banking from one Greek account to another, you could make payments into other Greek accounts but then you don’t have access to it you’ve only got access to €60 of paper money a day, now that creates de facto a dual currency system, I call it bank money, bank euros and paper euros. You have bank euros which are trapped inside the system you know the banking system and you are paper euros and the two are going to soon establish a kind of exchange rate between them. So we are in uncharted territory.

Phillip Adams: “You mentioned the era of the Colonels in your opening statement, as it happened I was in Athens that day, I was staying in a hotel on Constitution Square and so my memory is haunted by the horrors of that era and the possibility that the turbulence, the political turbulence in Greece could lead to the same sort of terrifying polarities it’s something you and I discussed before you took up your high post in Athens, your concern has always been that there will be a surge of the ultra right.

Yanis Varoufakis: “Well when I go to Parliament I have to look at the right hand side of the auditorium, where more than 10 Nazis sit, representing Golden Dawn. If our party, Syriza, that has cultivated so much hope in Greece, to the extent that we managed to score 61.5% in the recent referendum, if we betray this hope and if we bow our heads to this new form of postmodern occupation, then I cannot see any other possible outcome than the further strengthening of Golden Dawn. They will inherit the mantle of the anti-austerity drive, unfortunately, tragically. And therefore I do seriously believe what I said to you before that the project of a European democracy, of a united European Democratic union has just suffered a major major catastrophe.

Phillip Adams: “Oh dear! Yanis thank you very much for your time and our hearts go out to the Greek people.

I’ve been talking to the former Greek Finance Minister Yanis Varoufakis.

Coming up, how future generations will feed themselves. They’ll obviously have a wider choice of menu than the Greeks.

Former Greek Finance Minister in the Syriza Government and professor of economics.