Adults In The Room: My Battle With Europe’s Deep Establishment
by Yanis Varoufakis
Bodley Head £20
Talking To My Daughter About The Economy: A Brief History Of Capitalism
by Yanis Varoufakis
Bodley Head £14.99
There is a story by Day Of The Triffids author John Wyndham in which the world financial system (as represented by the Bank of England – this was the 1950s), is about to be destroyed because a man decides to stop believing in it. Capitalism is saved when he is pushed under a bus.
Something similar happened in 2015. Faced with the prospect of Europe’s, and possibly thereafter the rest of the world’s, capitalist economic system being recognised by any sensible person as literally incredible if the certifiably insane financial practices of the French and German banks towards Greece were revealed by its default and exit from the Eurozone, the ‘Troika’ of European Union, European Central Bank and IMF, forced it to accept a third ‘rescue’ package that it palpably could not afford.
The fact that the system is still standing, and not crumbling to dust, as was about to happen in Wyndham’s story, is because Greece was thrown under the bus, and its people are still lying there beneath the wheels, bloody and broke. That’s Champagne – or perhaps in these days of continuing austerity, Prosecco – all round, I think, at least in Frankfurt and Paris.
A few people attempted to resist the inevitability of the economic trashing of Greece. One of them was ‘dissident’ left-wing economist, academic, and writer Yanis Varoufakis, who had spent many years teaching in the UK, Australia and the USA. But persistent banging at the doors of power, shouting “Don’t do that, do this!” has its contingent dangers, as Varoufakis discovered. And not just the threats to his family that persuaded them to move to Texas.
With the alternately governing Pasok and New Democracy parties utterly discredited for their part in decades of corruption and economic mismanagement, the new kids on the Athens block were leftist coalition Syriza, led by charismatic young Alexis Tsipras, about to win an election and be handed the poisoned chalice to surpass all poisoned chalices. And who better, therefore, than the equally charismatic Varoufakis, to be asked to put his (or at least, other people’s) money where his mouth was and carry some of the weight of that overflowing cup of hemlock.
So Varoufakis, though not a Syriza member, was recruited, handed an Athens constituency, which he won with a landslide, and duly installed as Finance Minister. And as an academic, not a politician, one might dismiss him as insufferably egotistic and naïve to believe that he both had the answers and would be allowed to put them into practice, even if it involved uncovering the almost non-existent foundations of the Eurozone edifice – and that the European political and financial establishment would bow to the wisdom of one who was clear in his determination to remain an ‘outsider’.
If the book is to believed, Varoufakis knew it was a long shot. He did believe he had the answers – some of them, at least; enough to ease the pressure on the Greek economy while preserving the Eurozone. And he was always, by his account, wary of the true political intentions of the politicians around him – not only Tsipras, who he regarded as a friend, and who was trying to balance the various wings of a fractious political movement, but also some of his cabinet colleagues.
The basic problem was that Greece had been literally insolvent in 2010, a fact covered up by the Eurozone powers to prevent the Euro imploding. The first bailout – stricty speaking illegal, because of Greece’s insolvency – was a figleaf that quickly became too small to cover up everybody’s embarrassment. The solution, as far as the Troika was concerned, was to continue to squeeze Greece. Since it couldn’t afford even the first bailout, further deals were required which only made the situation of the majority of its people worse.
Varoufakis’s alternatives – which I won’t go into here; read the book if you want the nitty-gritty – would have required some acknowedgement that the initial solutions were wrong, and compromise from those responsible for the initial disastrous bailout. But those in power in the Eurogroup (the EU’s Eurozone governing body, which, as Varoufakis was to discover, didn’t actually exist, when it suited them) were anyway ideologically committed to undermining social welfare across Europe in order to increase competitiveness in the face of international competition (and to keep the smaller, weaker countries under control). So, despite Varoufakis hearing many sympathetic, even approving noises from EU (and worldwide) political and financial figures (Emmanuel Macron, then French finance minister; Barack Obama, then US president; Norman Lamont, former UK Chancellor, etc), the Eurogroup simply weren’t prepared to countenance such a retreat.
Varoufakis (with, he believed, Tsipras’s backing) had contingency plans for that outcome, too … but they depended on the unity of the Syriza government and its willingness to stand firm. Unfortunately, as well as the underhand opposition of Deputy Prime Minister Yannis Dragasakis and his own deputy George Chourialakis, and the hostility of his former friend Yannis Stournaras, head of the Greek Central Bank, and the state security chief Yannis Roubatis, Varoufakis also faced, ultimately, the ambition of Tsipras, who had no intention of remaining a European political outsider. The betrayal was cynical and, though Varoufakis gives him the benefit of the doubt, possibly even planned all along. Tsipras, I suspect, always regarded his Finance Minister as disposable, someone whose honesty and integrity (and lack of political nous) could be relied upon to cause his downfall, the point at which Tsipras could be recognised by the Euro powers as the realist, someone they could do business with. Certainly, some European political figures were urging Tsipras to replace Varoufakis from the very beginning of the February 2015 negotiations, fearing a strong negotiator who had mastered his brief and was not tied in any way, or loyal to, Europe’s banking and financial institutions.
The beginning of Varoufakis’s downfall began when, after an initial success, he was outmanouevred by German Finance minister (and Eurogroup gauleiter) Wolfgang Schäuble (who actually wanted Greece out of the Eurozone) and then generously agreed to take the fall for the deceit of Dragasakis and Chourialakis in order to protect Tsipras. Shortly after that he was effectively sidelined by Tsipras under pressure from the Troika. It was then he began to realise that the leader who had brought tears to his eyes when they were first sworn in as the new government was a politician just like many others …
There were plenty more trials and tribulations, over the next five months – bugged phones, vicious leaking, lies and disinformation campaigns, the scuttling by the Troika of a valuable financial and trade deal with China, and Tsipras’s gradual enslavement by Angela Merkel. Then came the referendum on the bailout, in which the government claimed to want a ‘No’ vote, but secretly wanted and expected ‘Yes’. Realising Tsipras would ignore the 63% vote against the deal, Varoufakis quit – as he should have done (despite his protestations in the book), months before; he was, after all, essentially a dead man walking before his first month in office was complete.
And so Tsipras remained and, for now, remains in power, divested of those who could have offered a more humane solution to keeping Greece within the Eurozone, as well as his party’s Left Platform, who anyway opposed the Eurozone and the bailouts. Shortly after Varoufakis’s departure, he even agreed to abandon many of the measures that had been introduced to fight tax evasion and the exploitation of the poverty-stricken population by gambling corporations.
Whether future elections will entrench Syriza is another question. Greeks may well decide that, if they are going to suffer even under a ‘left’ government that no longer really has a left, they might just as well do so under the traditional parties of Pasok and New Democracy, or even worse, experiment with the fascist nightmare that is Golden Dawn.
Varoufakis does not speculate on his country’s future. He tells the story of his ‘battle’ and he does it persuasively, eloquently. For a casual reader there is possibly too much detail, but his explanation of the original bailout deal is mind boggling in the absurdity and grotesque dishonesty it describes. He is generous on the whole to those about whom he writes, even those whose behaviour is most shameful, and mild in his his treatment even of the appalling Schäuble – possibly the most authoritarian, extreme neo-liberal and evil influence on the EU in living memory (though, as of the last German elections, now thankfully removed as finance minister) – and his hard right Dutch glove puppet, Eurogroup President Jeroen Dijsselbloem.
This is one of the most vital books ever written about European politics and finance, a compulsory read for anyone who cares about the future of the EU, and the continent as a whole. It’s a tale of such fiscal folly, moral vacuity and political cynicism that, as a diehard Remoaner, I was left almost in despair, almost relieved at the prospect of Brexit, wondering if Varoufakis’s continued optimimism and energy – particularly in his continued belief in Europe and his activities with the Democracy In Europe movement – aren’t a sign that he really was and is terminally naïve, and possibly deranged!
But among the snippets Varoufakis relates in the course of the book – in addition to the fact that the famous leather coat actually belonged to the Greek ambassador to Paris (Varoufakis had left all his luggage in a taxi on the way to the airport) – is a brief mention of his teenage daughter Xenia, who lives in Australia, and who begged him to quit as finance minister because of teasing she was experiencing at school over the Greek financial chaos. A couple of years earlier, Varoufakis had been inspired by Xenia’s question, “Why so much inequality, Dad? Is humanity that stupid”, to write Talking To My Daughter About The Economy, now published in English for the first time.
Written in just nine days, the book is a primer, aimed perhaps at teenagers but still a valuable piece of speculation and analysis for adults, too – indeed anyone interested in politics and economics.
Certainly, the speed with which it was written and the breadth of its subject matter means that there is much here that other scholars – historians, economists and political scientists – will be able to take issue with. But it’s the very nature of the book that it can be used as a launch pad for the kind of wider study and investigation that we should be encouraging among the young.
With his usual intelligence, eloquence and humanity, Varoufakis ranges from the birth of agriculture and market societies (and the question of why the British subjugated the native Australians and not vice versa) to the idea, inspired by the Matrix films, that humanity, unlike other mammals on the planet, is nothing more than a ‘cancer’, a plague on the earth. Democracy, he concludes, though it may be imperfect and corrupt, is the only way of proving that thesis to be wrong. And he ends with the lines from TS Eliot:
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time
This book is a brilliant way to encourage exploration. A stocking-filler with some weight!