Of the many disgraceful acts the previous government had perpetrated, two concerned the arts and our broader cultural milieu. One was the closure of ERT, the state radio and television broadcaster – our equivalent of the BBC. The other was the illegal removal from the directorship of the National Museum for the Contemporary Arts (EMST) of Anna Kafetsi, a curator who had made its establishment, completion and success her life’s work.13 When in opposition Syriza had pledged to reverse these outrages.
Despite their differing backgrounds, Sagias, a product of the ancien régime, and Pappas, who liked to present himself as Alexis’s radical alter ego and the guarantor of our defiance, were a crucial component of the majority in the war cabinet that defended our original covenant. The first time I got a whiff that Pappas and Sagias were going over to the other side was when they backed away from our commitments regarding ERT and EMST. During that cruel April Sagias dropped a bomb. In reply to an idle question regarding who would be appointed CEO of the reopened ERT, he mentioned Labis Tagmatarchis, the former CEO who had overseen my blacklisting from ERT in 2011.14
‘Is this the new era we’re planning for ERT?’ I asked. ‘Did we fight to reopen it only to restore Labis? Are we keen to return to the bad old days of direct government control over a lowbrow public broadcaster?’
Sagias shrugged his shoulders. ‘That’s what I heard,’ he said. ‘Don’t chastise me. Talk to Pappas.’
The next day, on the sidelines of a regular war cabinet meeting, I confronted Pappas, who was the minister of state with responsibility for the media. ‘Are you seriously considering restoring Labis to the ERT throne?’
‘Don’t be absurd,’ he replied. ‘As if I would go for him!’
Reassured, I asked him whom he was thinking of instead. Pappas mentioned George Avgeropoulos, a brilliant young documentary maker and former war correspondent. He struck me as being an excellent choice. That night I told Danae I felt bad about doubting Pappas – a mistaken regret, as it turned out.
Meanwhile, every time I bumped into our minister of culture I would enquire about Ana Kafetsi’s return to EMST. ‘When do you think we can have her back?’ I would ask.
‘As soon as possible,’ was his standard reply, occasionally peppered with encouraging statements such as ‘She’s the only one who can open the museum properly and who has what it takes to make it globally significant.’ Precisely my thinking, I thought.
In short order two announcements wrecked my illusions: Pappas issued a press release that Labis Tagmatarchis was to become CEO of the reopened ERT, and the Ministry of Culture announced that the acting director of EMST, who had replaced Anna Kafetsi by a Samaras government decree, would continue in her position indefinitely. Countless people contacted me, incensed that we had reneged on two commitments to the thousands who had gone to the barricades to demand a different ERT and to those around the world who had protested against Anna’s removal.
I was even more incensed than the public because I was aware of things that might not have been widely known. The acting director of EMST was Labis’s life partner, while Sagias himself had told me of his long-term friendship with Labis. Pappas was getting closer and closer to Sagias when he reappointed Labis ERT’s CEO and was known by all ministers to have the ear of the prime minister – including the minister of culture. Even if these appointments had been on merit, they seemed to me to be a warning of nepotism creeping into our ranks and of a cosying up to the regime we had sworn to replace.
It was no coincidence either, I thought, that they came at the same time as a crucial shift within the war cabinet, with Pappas and Sagias clearly drifting away from our covenant. And as Pappas and Sagias drifted away, the four-to-two majority that had backed the original battle plan – with Alexis providing the fifth vote in its favour at the end of each meeting – became a four-to-two minority, with myself and Euclid increasingly isolated.
Fake intelligence
Pappas and Sagias were not the only colleagues whose shift towards the troika was signalled by seemingly inconsequential choices over personnel. One afternoon in March, Yannis Roubatis, the chief of Greece’s national intelligence agency, approached me at Maximos with a request. He wanted, he explained, to put in a good word for the man who had been presiding over the Hellenic Gaming Commission, the regulatory authority overseeing gambling. ‘He is very close to the previous regime,’ Roubatis admitted, ‘but I believe he has found a way to keep that dodgy sector relatively clean. It would be a mistake to remove him just because he is not one of our own.’ I was determined to maintain continuity wherever possible, and Roubatis’s word would normally have sufficed, especially given our good relationship and the significant esteem I held him in.
However, at the ministry my team would not hear of it. ‘If there is one person you must remove, he is it,’ they said about the man whose services Roubatis wanted me to retain. After researching their claims and assessing the situation, I did remove him. This kick-started a personal campaign by the privatized national lottery corporation against me and the people I appointed to the new Hellenic Gaming Commission.15 It also coincided, perhaps accidentally, with the cessation of the helpful briefings that Roubatis had been giving me until then.
Meanwhile Pappas and Sagias’s behaviour towards me deteriorated markedly. Alexis’s decision on 27 April to accede to Dijsselbloem’s demands by dismissing Theocarakis marked a significant downturn, and they became increasingly impolite. Within a month their manner towards me had evolved into downright rudeness and aggression. One day on the sidelines of a war cabinet meeting I asked Alexis whether he had noticed it. Nonchalantly he said he had. And when I enquired if he knew why, he shocked me with his answer.
TSIPRAS: Sagias is convinced that you are in cahoots with Schäuble to take us out of the euro. And I think that he has convinced Pappas too.
VAROUFAKIS: Do you believe this to be so, Alexi?
TSIPRAS: No, but they are convinced.
VAROUFAKIS: Why? How? On what basis? If I have succeeded in anything it is at blocking Schäuble’s Grexit efforts on your behalf.
TSIPRAS: Roubatis has fed them information to the contrary.
While the rest of the war cabinet continued their discussion, I tried to make sense in my head of this astounding information. Roubatis is telling them I’m in cahoots with Schäuble? If so, our chief spook is peddling outright lies, I thought. Evidently, someone has influenced two of my war cabinet colleagues, who have in turn influenced Alexis. But I’m getting all this from Alexis. How can that be? If Alexis believes I’m Schäuble’s stooge, why is he telling me? Surely he would use this information to bait me before getting rid of me? Then again, if Alexis does not believe this, why doesn’t he side with me against Sagias and Pappas? Could it be that Alexis is lying and Roubatis did not accuse me of collaborating with Schäuble? I needed to find out the truth.
I got my chance the night before the Eurogroup meeting of 11 May. The war cabinet had decided the strategy that I should take with me to the meeting and was in the process of adjourning. Roubatis happened to have joined us for the last quarter of an hour of discussions. As we were getting up to leave, Alexis turned to me and said in front of everyone, ‘Be calm tomorrow. Don’t lose your cool.’
I smiled and in a calm voice said, ‘I am always ultra-cool during Eurogroup meetings.’ Looking at Roubatis, I asked Alexis, ‘Have you been told otherwise Alexi?’
Alexis glanced at Roubatis but said nothing.
‘You did lose your cool at Riga, Yani,’ Roubatis said.
‘No, I did not. Not for one moment did I lose my cool. If you have been telling my colleagues otherwise,’ I said to Roubatis, pointing at the others in the room, ‘either you have been misinformed by your agents or you are lying.’
Back at my office I downloaded from my phone onto my computer my recording of the Riga Eurogroup. I copied it onto a USB stick and gave it to my secretary with instructions that the stick be reproduced and delivered personally to the members of the war cabinet, with a note from me: ‘Here is what really happened.’ Interestingly, none of them ever mentioned it to me. To this day I do not know whether they even bothered to listen to it.
Countdown to perdition
With little support from my ministry’s key departments, such as the tax office and the Council of Economic Advisers, I was now wholly reliant on a small team of advisers. The strength of their models and their tenacity were nonetheless a great source of annoyance to those who had worked harmoniously with the troika from the start as well as to those who had now chosen, mid-course, the path to surrender. One of those advisers was Elena Panaritis.
In early May I informed the IMF that Elena would be taking on the role of Greece’s representative to the IMF. I did so with Alexis’s permission and with the full support of Takis Roumeliotis, our former IMF representative, as well as that of our economy minister, George Stathakis. Her appointment was approved a few days later. In mid-May, however, Alexis asked me to dump her because ‘the party cannot tolerate someone who had signed an MoU’. Truth be told, Elena had a conspicuously neoliberal background, attended gatherings of neoliberal politicians and economists and addressed the media in the manner of a former member of parliament, which she was, rather than in the more deferential style expected of a minister’s adviser – that Greek was not her first language may not have helped either. But the only thing that mattered to me was that she represented me and our government brilliantly at international forums and was absolutely committed to the task of getting Greece off the hook. She was by far the best person for the job.
In response to Alexis, I explained that it was precisely because of the intellectual and moral courage with which she had turned against the logic of the MoU that I trusted her, certainly more than I trusted unschooled Syriza militants who did not know what they were up against. Alexis smiled at my reasoning but repeated that we had a problem. I put my foot down. This appointment was for the finance minister to make. Full stop. However, in order to help him fend off pressure from the party ranks, I proposed we go through an open recruitment process, with Dragasakis, Stathakis, Euclid and myself on the deciding committee, to assess Elena’s suitability in the context of other candidates. Alexis agreed. Once again Elena was judged the right candidate and appointed.16 A fresh letter to the IMF reconfirming her appointment was dispatched.
Four days later a newspaper reported that Sagias could not stomach her appointment, calling Elena an ‘MoU choice’. The fact that he was at that very moment striving to drag Alexis down a path that led back to the MoU was ironic to say the least. But by 1 June, under immense new pressure from Alexis, Elena had resigned.
It would be a mistake to think that such episodes were unimportant. The troika had made it clear that a deal would be possible only if we were to postpone debt relief and increase tax rates, so the Plan for Greece had to be shot down because debt relief was at its heart, and the taxation models my team and I had been working on had to vanish. Elena’s removal was a great help to Sagias and Chouliarakis’s campaign, supported by Pappas and Dragasakis, to steer the Syriza government away from seeking debt relief.
During a war cabinet meeting, Pappas – who had approached me in 2012 because of my dedication to debt restructuring and had insisted that I become finance minister in 2015 – accused me contemptuously of being ‘fixated’ on Greece’s debt.
‘You bet I am,’ I replied. ‘When in a prison camp one has a duty to be fixated on escaping.’
Sagias rushed to Pappas’s aid, making the incredible argument that the debt was not a problem as long as the troika funded its repayment. Watching Alexis fail to respond to this disavowal of literally everything we had been saying since 2010 was mortifying. Submitting to the troika’s MoU process and remaking our government into a softer version of the Samaras administration was now their goal. I remember hanging around with Euclid at Maximos as we waited for the war cabinet to begin while in an adjacent room Sagias and Chouliarakis, with Dragasakis hovering to lend them support, wrote and rewrote the troika’s so-called Staff Level Agreement (SLA). This was effectively a new MoU, identical to the old except but for a few fig leaves and a great deal less fiscal sustainability. The awfulness of it all was excruciating.
One day I told Alexis that he would not be able to sell Sagias’s SLA to himself, let alone to our parliamentary party. Disarmingly, he agreed and looked even more depressed. Meanwhile, Jeff Sachs was sending me urgent warnings: ‘They demand an SLA first, promising talks about debt relief and the like later. But they lie! Once you give them the SLA they will deny they ever promised you anything. Don’t fall for it!’ How could I tell Jeff that I no longer had Alexis’s ear? That he seemed compelled to go inexorably down that path?
By the end of May, Alexis seemed too depressed to control war cabinet meetings. They were now dominated by Sagias, who with the consent of Dragasakis and Pappas was intent on our adoption of the language and content of the troika’s SLA. We were conceding everything – fiscal targets that required austerity, the creditors’ tax models and rate hikes, privatizations without limit – and getting nothing in return. Whenever I pointed out that we were making commitments that were impossible to meet, I met with responses that were more or less a reprise of the Samaras government’s arguments: that future commitments were immaterial as long as we got new loans in the meantime; that debt was not an issue because, sooner or later, it would be restructured.
In a desperate attempt to refocus Alexis’s attention, with Glenn Kim’s help I compiled yet another, even milder and more moderate version of our debt swap proposals and suggested that Alexis present it at his forthcoming informal tripartite meeting with the German chancellor and President Hollande, arguing that any agreement based on Sagias’s SLA would be political poison in Greece if it didn’t include at least some kind of debt restructuring. Alexis did as I suggested and called me up later with the ‘good news’. The meeting had gone quite well, he told me. ‘Angela said she was prepared to have our debt proposals studied and asked me to send someone to discuss them with Wieser.’
But Euclid’s separate report from Brussels told a different story: ‘The tripartite went badly so we will give them more!’
‘Alexi,’ I said, ‘she referred you to our gravedigger, Thomas Wieser, who clearly has no mandate to discuss debt relief with us, and you are telling me this is good news?’
Nevertheless, I was happy to send Glenn Kim to Brussels to meet Wieser, just in case. Glenn was as brilliant as ever in demonstrating to Wieser how simple and effective the debt swaps we were proposing would be and that they would come at minimal political cost to the chancellor. Wieser was forced to concede that our proposals had merit, but the fact that there was no credible threat from our side any more meant that Glenn’s success led to nothing.
At a meeting of the war cabinet on 30 May, when Sagias and Chouliarakis suggested to Alexis that another meeting with Wieser should be arranged, I interjected, weighing my words carefully, ‘I don’t mind us talking to Wieser again, if you wish, but know that nothing will come of it. Our only chance of regaining control of our fate is if our prime minister, at most by Wednesday or Thursday, tables for public scrutiny and debate our own anti-MoU – our final proposal both for ending the current programme and for a new contract with the EU. Instead of speaking on the basis of their SLA, to discuss on the basis of our Plan for Greece. I have been saying this for two months now and I have been working on a text fit for that purpose…’
Sagias, who was sitting next to me, was repeating sarcastically, ‘A rupture proposal, a rupture proposal, a rupture proposal … That’s what you are doing. Proposing a falling-out.’
I had reached the limits of my patience. I banged my hand on the table and said, ‘Look here! You will not interrupt me again. Nor will you put words in my mouth to distort my meaning. The troika and its media are doing a perfect job of that. But not in here. If you disagree, you will wait until your turn comes to put forward your views.’
‘Now you’ve scared me!’ Sagias said with aggressive condescension.
‘Spyro, careful now. You are descending into the realm of political hooliganism.’
Sagias shouted at me, ‘I have forty years of struggling in this country unlike some who saw their chance to return from abroad to make a career here.’
‘I am glad the masks are off so that we can all see clearly who has been undermining the finance minister from within,’ I replied.
