Patrice Riemens on Sun, 25 Jan 2015 17:32:40 +0100 (CET)

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<nettime> Yannis Varoufakis interview by Johanna Jaufer (

By the time you will read this, the results of the Greek parliamentary
elections (this Sunday) will have become know, and wherever Syriza,
forecasted to come out as the largest party, will be able to form a
government, which is not given, even with the bonus of 50 additional seats
given to the frontrunner. It is widely rumoured that Yannis Varoufakis
will become Greece's finance minister if Syriza actually comes into power
(albeit in a coalition government).

Johanna Jaufer interviewed him for the Austrian ORF4FM radio
original on YV's blog:

Interesting times ahead!


JJ: You have been a politician for only three weeks now?

YV: Two weeks.

Have you had to think it over very much? In your blog you wrote that you
were frightened, too.

It was a major decision. Primarily, because I entered politics in order to
do a job that I always thought should be done and I was offered the
opportunity to do it. It has to do with the negotiations between Greece
and the European Union if Syriza wins, which is an extremely scary project
and prospect. At the same time I am an academic, I am a citizen, an active
citizen, so I am used to dialogue where the point of the conversation
really should be that I learn from you and you learn from me ? we are
going to have disagreements, but through these disagreements we enrich
each other?s points of view.

It?s not about winning the other one over?

That?s right ? actually in politics, it is worse: each side tries to
destroy the other side ? in the eyes of the public ? and that is something
that is completely alien to me and something that I didn?t want to get
used to.

What about your university job? Have you put it on hold?

Yes, indeed. I have resigned from University of Texas. I still retain my
chair at the University of Athens ? without pay ? and hopefully it won?t
be too long before I return to it.

Wouldn?t you be ready to stay in a government for a longer time?

No, I don?t want to make a career out of politics. Ideally, I would like
somebody else to do it, and to do it better than I. It?s just that this
was a window of opportunity, because Syriza rising to power is a
precedence. So, it was a small window of opportunity to get something done
that would not have been done otherwise. I?m not a prophet, so I can?t
tell you where I will be in two, three, five, ten years. But if you?re
asking me now, my ideal outcome would be that our government succeeds in
renegotiating a deal with Europe that renders Greece sustainable, and then
other people, you know? power should be rotated, no one should grow
particularly fond of it.

Something that has been brought up quite a few times in Germany and in
Austria as well, is the thing about the reparation payments ? because
Germany had been chickening out of paying proper reparations after World
War 2 ? how, in your opinion, did that happen? Was it because they said
?oh, Germany is split, we will wait until it will be reunited again?, or
was it also the Americans saying ?ah, now we need Germany to build our
military bases as well, so we will let you off the hook? ? or was it a

It was a combination. Back in the 1940s, the Allies had decided to turn
Germany into a peasant country again. They were about to dismantle 700
industrial plants and it was the Americans who stopped that plan ? so,
they did destroy 700, but then they changed their mind. They changed their
mind for reasons that had to do with the way that the United States was
designing global capitalism and they needed a strong currency in Europe
and a strong currency in Asia ? it was going to be the Deutsche Mark and
the Yen ? and the whole of the European union project was built around
that plan. We in Europe like to think that the European union was our own
creation. It wasn?t. It was an American design which then we adopted and
which of course was consistent with what we wanted, our aspirations. Part
of that design meant bolstering the German economy, bringing it out of
depression, bringing it out of the mire in which it found itself in the
40s, and, as always, one important component of such an attempt to revive
an economy includes debt relief, a serious haircut of debt, debt write
off. So in 1953 there was the debt conference in London which savagely cut
the debt of Germany to many nations including Greece. But Greece is a
special case, because there was another debt that Germany didn?t have to
any other country, because in 1943, the Kommandantur here in Athens
imposed upon the Bank of Greece a deal according to which the Bank of
Greece will print a lot of Drachmes ? war time Drachmes ? and provide them
to the German authorities so the German authorities could buy materials
and finance their war efforts and stock up on agricultural goods for the
Wehrmacht and so on. But interestingly, the German authorities wrote a
contract up. So they actually wrote down the sum of money that they
borrowed. They promised to pay interest. So it was a formal loan. The
document exists until this day in the (Central) Bank of Greece. That never
happened with any other country. So, this is like an official debt, like
in a bond, of the wartime German Nazi state towards Greece.

You can really trace it down to exact numbers?

Exact numbers. Of course, the difficulty is to translate that wartime
currency which became absolutely inflationary very soon because so many
Drachmes were printed. So, effectively, the German authorities, buy
accepting that loan from the Bank of Greece, debased the currency, and
that had secondary huge social costs throughout Greece. So, it is very
difficult to compute exactly what this loan means in today?s terms, how do
you compound the interest, how do you convert, how do you count the cost
of the hyper-inflation that was created. I mean, supposedly, our German
friends are very sensitive to hyper-inflation, so they should understand
that their own authorities created one in Greece as a result of that debt.
My view is that we are partners, we should stop moralizing, we should stop
pointing fingers at each other. Biblical economics, ?an eye for an eye, a
tooth for a tooth?, leave everybody blind and toothless. We should simply
sit down in exact the same spirit as the United States sat down in 1953
and didn?t ask the question, ?do the Germans deserve to be punished??, ?is
it guilt or is it sin??, whereas debt, I know that in German there is a
conflation of these words ? it?s the same word, sin and debt ? as opposed
to credit, for instance. We should just ask the very simple question, ?how
can we render the Greek social economy sustainable again so that the costs
to the average German, to the average Austrian, to the average European,
of the Greek crisis are minimized.

Why aren?t very many Northern European people afraid that cutting down
labor rights in the 1990s could have been a foresight of exactly the same
thing that is happening here (in Greece)?

I think it?s all Isop?s fault. Because he came up with the parable of the
ant and the grasshopper, where the ant works hard, never enjoyed life,
kept putting money ? or value ? aside, and the grasshopper simply lazed in
the sun, sang and did nothing and then the winter came and retribution
followed. This is a good parable: Unfortunately, in Europe there is this
very strange notion, that all the grasshoppers live in the South and all
the ants live in the North, when in reality you have ants and grasshoppers
everywhere. What has happened before the crisis ? that is my re-telling of
the Isop tale ? is that the grasshoppers of the North and the grasshoppers
of the South combined to create a bubble, a financial bubble, bankers from
the North and bankers from the South, for instance ? which enriched them
greatly, and allowed to sing and laze in the sun, while the ants of the
North and the ants of the South worked, under increasingly difficult
conditions, even during the good times, making ends meet in 2003, in 2004,
was not easy for the ants of the North or of the South, and then when the
bubble that the grasshoppers of the North and the grasshoppers of the
South created, burst, the grasshoppers of the North and the South got
together and decided that it is the fault of the ants of the North and the
ants of the South. The best way of doing that was to turn the ants of the
North against the ants of the South, telling them that the South was
inhabited only with grasshoppers. Thus, the European Union started to
fragment and the average German hates the average Greek, the average Greek
hates the average German. Very soon, the average German will hate the
average German and the average Greek the average Greek.

It already began, hasn?t it?

It already began. And this is exactly what happened in the 1930s, and Karl
Marx was completely wrong when he said that history repeats itself as
farce. Here, history just repeats itself.

Concerning Mr. Draghi?s recent decision to flood the market with trillions
of Euros: You had been quoted saying that it is kind of using a water
pistol against a bushfire.

I think that Draghi is well-meaning. Draghi wants to keep the Euro zone
together, and he is quite skilled, actually. He is doing his best, given
the constraints that he is facing. I have no doubt ? he will never admit
to this ? but I have no doubt that he understands that what he is doing it
is too little and too late ? the water pistol against the bushfire. But he
thinks that even a water pistol is better than nothing. If there is a fire
raging, he would like to use a water canon, and he would have liked to use
it earlier, but he was not allowed to, because in Europe, we have a charta
of the ECB that is binding its arms behind its back and sends it into the
ring to fight against the monster of deflation, which is very unfair to
the ECB, and until and unless Europe understands what is necessary from an
economical point of view in order to sustain a monetary union, and why
this fragmentation and the increasing renationalization of everything,
including now with QE (80% of bond purchases will be carried out by
National Central Banks ? as if they exist separately from the ECB), this
fragmentation and renationalization is exactly the opposite of what we
should be doing which is getting together, consolidating. How did the
United States get formed? Because every time they had a crisis ? the Civil
War, the Great Depression ? they got further together. We claim to be
doing that, like ?banking unions?, like the ?ESM?, but we don?t. We create
a banking union which is not a banking union, it is a banking disunion,
and we called it in an Orwellian fashion ?banking union?. So, Europe has
not learned the lessons of history and until we change course, it is very
unlikely we will manage to hold the whole thing together.

About SYRIZA?s plans on how to revive industry in Greece, Theodoros
Paraskevopoulos said that it is also about getting the pharmaceutical
sector within Greece bigger again because it has a good basis. How come?

I don?t know! For some reason, we have good pharmaceutical companies that
have solid exports. We need to help them and we need to create such
industries in other sectors, too.

For example?

I think that we have excellent computer coders and software engineers, so
we should aim doing something similar to what Israel has done. To create a
network of small startup companies which are extroverted and
export-oriented. If some of them get bought out by Google or so on, that
is not a bad thing. This is the kind of thing that we should try to
support, if we can.

In terms of also getting foreign investors to like engage in Greece, is
there also a thought about something like Private Public Partnerships, a
thing which Northern European Countries have got many problems with in the

I am not keen on public private enterprises. Wherever they have been
tried, they ended up being a drain on the state, without producing any
value added of significance. They were mostly cost-cutting exercises and
in the end had no developmental effect. But where I believe we should be
aiming at, is the development of existing public assets, without selling
them ? we are conducting a fire sale simply to collect revenue ? so that
private sector money, investment funds, can come in and develop in a way
that is mutually beneficial. That is a kind of PPE, but not in a way that
it was tried in Britain or elsewhere.

Getting back to the memorandum discussion: Between what factors do you
believe is Mrs. Merkel stuck in?

I believe that Germany is divided. The interests of the Bank of Frankfurt
are not the same as those of the Mittelstand, as those of the small and
medium sized enterprises in Middle Germany, which are not the same as
Siemens and Volkswagen and so on. It makes a difference whether you have
your productive capacity only in Germany, as the small and medium sized
enterprises do, or whether you are globalizing, have factories in China
and Mexico. And Mrs. Merkel is an astute politician who realizes or thinks
she has realized that there is no consensus amongst those clashing
interests as to what they want to do with the Euro, with our Central Bank,
with the periphery and so on. Mrs. Merkel will simply not move until there
is a consensus that will guarantee her survival, politically.

But that consensus will not be possible.

Well, for instance ? what happened in 2012, with Draghi?s own OMT
announcement, and yesterday with QE, you can see that once there were
voices that started saying, ?folks, deflation is killing us, do something
about it?, then she could use those voices against the Bundesbank to easy,
?I am going to support Draghi ? whatever you do?. So, it?s not a
?consensus-consensus?, but she is gauging the shifting tectonic plates
under her feet. And she is very astude in the way she does it. What I
would like to invite her to do is to think of her legacy beyond just mere
survival, and I would like her to consider the possibility, that in 10,
20, 100 years? time, Europe could be speaking not only about the Marshall
plan that saved Germany, but also the Merkel plan that saved the Euro.

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