Naturally Lafazanis liked the idea of using Draghi’s €16 billion as the foundation for a new drachma and agreed, were we to do so, that the ECB should be compensated for the production costs of the bills. But as he lacked the power to persuade Alexis to pursue Grexit, the idea was academic. As for Alexis, he soon forgot about the €16 billion but continued to block the activation of my parallel payments system, holding to Dragasakis’s veto of a few days before.
Months later, a conservative pro-troika newspaper published as fact the false and libellous rumour that Lafazanis had planned to storm the Bank of Greece’s vaults, arrest Stournaras and steal the cash. Some of the reports even portrayed me as a party to this conspiracy. Its purpose was clear: vilify anyone who had sincerely supported the no campaign in order to present Alexis, by contrast, as a sensible man who at the last moment saw the light and saved Greece from rogues in his own party. The fact that it was Alexis and Flabouraris who had momentarily toyed with the idea of storming the Bank of Greece’s vaults never reached the public’s attention.
Gazing into an abyss: comrades in retrospect
‘If thou gaze long into an abyss, the abyss will also gaze into thee.’ Nietzsche’s disturbing dictum captures what it was like to peer into my comrades’ souls. After an academic career in which success largely depended on my own efforts, I had found myself on the front line of a war, depending on comrades to guard my flanks and rear. Deciphering their thinking in order to gauge whether they had my back or not was the hardest thing I had to do.
Friends and critics criticize me for having seen things in Alexis that were not there. I think they are wrong. His desire to liberate Greece from its vicious cycle was there. His intelligence and capacity to learn quickly were self-evident. His enthusiasm for the deterrent I had proposed and the debt relief I was prioritizing was real. His appreciation of what I brought to his team was genuine. When he had instructed me, in front of our cabinet, to fly to Washington to tell Christine Lagarde we were going to default, the enthusiasm had been authentic. The reason I had seen all these things in him was that they were there. My mistake was to miss other things that were bundled up with them: his back-up plan, which would inevitably annul my work; his frivolity; his tendency to melancholy; and lastly his intense desire to prove to a sceptical world that he was no shooting star. When he instructed me, on our first day in office, to remain ready to hand over the keys of our offices to the opposition rather than capitulate, he was not lying. The part of him telling me that was speaking the truth. This is why I was brought to tears by his words. This is why I believed him.
I believed him also, despite his distressing U-turns, because of the inhuman pressure he was under. During that first week of July, with the banks closed and while I was giving everything I had in the campaign for a no vote, I presented him with the final version of Plan X – the contingency plan that he had asked me to compile in case Grexit was forced upon us. As I was handing it over, he asked me, ‘Is it doable?’
I answered him honestly: ‘Read it and weep.’ The transition to a new drachma would be so painful as to be debilitating. Plan X outlined the pain, blow by blow. As he sank into his seat, I reminded him that Plan X was there to have but not to use, unless Schäuble got his way with Merkel. But I did recommend that we activate immediately the euro-denominated parallel payments system, which was the opposite of Plan X: a system that would allow us, in the event of a no vote at the referendum, to stay in the eurozone long enough for Merkel and Draghi to have the chance to come back to us – as Juncker had done already – with an agreement that included our minimum demands of debt relief and an end to self-reinforcing austerity.
Alexis looked at me serenely and asked, ‘What are the chances that they will come back to us with something decent, Yani?’
At that critical juncture in our country’s history I was obliged to answer with the greatest possible precision. I told him that the probability they would do so was 100 per cent if they acted rationally. But, I warned, as Dan Ellsberg, the great American economist and Pentagon strategist turned pacifist whistle-blower, had emailed me a few weeks before, ‘Keep in mind that the ruling class can be self-destructively mad; not just pretending!’
‘Powerful European leaders have a track record of being bad at serving their interests, of falling prey to irrational urges,’ I said. And given that irrationality breeds unpredictability, I estimated that a more sensible probability – that Chancellor Merkel would opt for the mutually assured damage of Grexit rather than a mutually advantageous deal – was around fifty-fifty.1
Watching him buckle under the pressure of that probability made me want to forgive, legitimize and rationalize his unforgivable, unethical and irrational slip-ups. There were many of these, but two above all: his retreat from our firm agreement, on which we had based our original strategy, that a continuation of the nation’s insolvency through a new bailout would be worse than Grexit, however painful Grexit might be; and his rejection of my plea to address the nation with the dignified surrender speech I had prepared for him, instead of organizing a referendum that he secretly hoped to lose.
During the referendum campaign I issued a statement to the press that if yes were to win I would resign. ‘As a democrat,’ I said, ‘I shall respect the people’s choice to have their government accept the creditors’ terms. But, at the same time, I have no obligation to sign and implement that agreement myself. If yes wins, I shall resign and let my successor do it.’ The fact that none of my government colleagues, Alexis and Euclid included, committed themselves to doing the same told me everything I needed to know. In essence, the difference between my Syriza comrades and me was that I concentrated all my strategizing against the troika. In contrast, after that cruel day, 27 April, when Alexis decided to burn Theocarakis and sideline me, even as I was attempting to persuade him that neutralizing his finance minister in the face of the ruthless Eurogroup and the formidable forces of Merkel–Schäuble was self-defeating, he was busily strategizing how best to sacrifice me.
If there was callousness in Alexis, I did not discern it. I think its apparent absence was due to his capacity to do something that I believe the rest of his entourage could not: reflect upon himself. I remember one May afternoon when we were in his office at Parliament House, well after he and I had clashed over the concessions he was making to the troika. Before I had the chance to challenge him on whatever doomed tactic he was currently proposing, he told me, ‘I was reading an article by Stavros Lygeros [a political commentator] just now. The rascal has me all sized up. He likened my situation to swordfish fishing. I have taken the hook but I am too strong for them to pull me out of the water. So they bide their time. They pull me in for a while and then give me more line. Then they pull me back in. And they will carry on doing this until I am exhausted. Once they sense my weakness, they will pull me out in one violent move.’
The others, like Dragasakis and Chouliarakis, could never have fooled me. I would never have believed their subterfuges nor joined any cause they espoused. With Alexis it was different. He had to talk himself into crossing his own red lines, which is the opposite of never having the intention of keeping to them. I can imagine Alexis saying to himself, like Shakespeare’s Richard III, ‘And therefore, since I cannot prove a lover, / To entertain these fair well-spoken days, / I am determined to prove a villain’, except instead of ‘lover’ it would be ‘insurgent’, and instead of ‘villain’ it would be ‘insider’. Alexis’s actions were not banal, to adopt Hannah Arendt’s sense of the word; he struggled hard to reconcile himself to them and to find peace. It was, I am convinced, that inner voice of his that was both his strength and his downfall, both the usurper of our common project and the reason why I believed him almost to the bitter end.
The puzzlement Alexis’s inner voice caused me was compounded by my friend Euclid – a rare hybrid: an academic from a milieu close to mine but also a party apparatchik. Euclid and I met in the English language, to borrow another of Arendt’s phrases.2 We shared the same jokes, the same cultural references, the same radical Europeanism, the same understanding of ‘Blighty’. He liked to pretend that he was politically to my left, acting as my left-wing conscience whose job was to pull me into line and prevent me from drifting into bourgeois tendencies and suspect friendships, such as with Norman Lamont, something I enjoyed letting him do. His dislike and scorn for Alexis and Pappas, which were reciprocated by them, coupled with the fact that I had had to fight hard to have him included in the cabinet, made me feel safe in his company.
When Alexis broke with me on 27 April under Merkel and Dijsselbloem’s pressure, he told the world that Euclid was the newly appointed coordinator of our negotiating team. The media relayed the news around the globe and heralded Euclid as our chief negotiator. Of course, neither he nor I had any real influence over the timeline of concessions Alexis was making. When Euclid found out about Alexis’s surrender to new austerity – the acceptance of a decade of 3.5 per cent budget surplus targets – he was just as shocked and livid as I had been. Until the end we frequently found ourselves at Maximos or in some Brussels room, staring at each other in bewilderment while Sagias and Chouliarakis edited drafts of the SLA, wondering what our role was. A sort of gallows humour developed between us: I would ask him what on earth was going on, and he would answer, ‘Are you confusing me with someone in the know?’
However, we differed in a crucial respect: Euclid was a Syriza functionary, and I was not. By appearing to perform his allotted role as chief negotiator and thereby allowing the world to think that any kind of negotiation was actually taking place, he lent the hideous negotiation process legitimacy. I clung on in the hope that after a rupture Alexis would require my expertise with the parallel payments system and debt restructuring while determined to resign the moment it became clear that I would be asked to sign an unsustainable agreement. Lulled by the assumption that Euclid and I were of one mind, that we were somehow interchangeable, I failed to foresee quite what being interchangeable would lead to – that Euclid would ultimately become the person used by the establishment to sign the loan agreement, which they knew I never would sign.
Until the referendum I did not see that this could happen, even though I had noticed two incongruities which should have alerted me. The first was that when just the two of us were talking, Euclid would be magnificently witty and accurate in his disparagement of the rest of the war cabinet, Chouliarakis and Alexis in particular, but during war cabinet meetings his interventions were meek, verbose and unrecognizable as views that supported mine. Frequently he would not back me up at all. The second was that in our private exchanges he would habitually agree with my assessment of the day’s events, but when I proposed that we react before it was too late, he would advise me to bide my time and warn against developing a bunker mentality. One day I had had enough. ‘When in a bunker,’ I said emphatically, ‘a bunker mentality may be helpful. Given that they are trying to get me, it is not paranoia to think that they are trying to get me!’
After it was all over it took me some time to diagnose the cause of my failure to read my two comrades: Alexis’s inner dialogue and Euclid’s hybridity had blocked my sensors very effectively. It took the referendum outcome and their sudden metamorphosis to unblock them. It was a transformation portrayed by Syriza’s ideologues as true radicals behaving truly responsibly, but to me it is best summed up by the ending of George Orwell’s Nineteen Eighty-Four.
He was not running or cheering any longer … He was in the public dock, confessing everything, implicating everybody … The long-hoped-for bullet was entering his brain … O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down from the sides of his nose. But it was all right, everything was all right, the struggle was finished. He won the victory over himself. He loved Big Brother.
Square of hope and glory
On the afternoon of Friday, 3 June, as the working day drew to a close, I breathed a sigh of relief. A week of closed banks was almost over. Despite the long queues at ATMs and the uncertainty of what awaited us the following Monday, there had been no violence, no panic, no civil unrest. The Greeks had proved themselves a sensible people.
The media, however, had managed to fall below their already absurdly debased standards, competing with one another to find the most innovative ways to frighten the public away from voting no. Much of the reporting of the no sponsors and supporters would in other countries have been deemed incitement to violence. The opinion polls consistently predicted that yes would win with more than 60 per cent of the vote, while comment writers foamed at the mouth at the government’s audacity in holding a referendum against the creditors’ wishes. Meanwhile, the parliamentary opposition had managed to persuade its supporters to take to the streets in some numbers, waving EU flags and placards proclaiming, WE ARE STAYING IN EUROPE!3
Later that Friday afternoon I received an email from Klaus Regling, the managing director of the European Stability Mechanism, the eurozone’s bailout fund. It was a reminder that he had the legal right to demand from me full and immediate repayment of the €146.3 billion lent to Greece as part of the first two bailouts. It was phrased in such a way as to suggest that I was personally liable, not least because as finance minister my name was on the loan agreement. It was too good an opportunity to pass up. I instructed my office to reply to our main creditor – to the man who had advised me to default to my pensioners instead of the IMF – with two ancient words. These were the defiant response of the king of Sparta, leader of the three hundred men who attempted to resist the entire Persian army at the legendary battle of Thermopylae in 480 BC, when instructed by the enemy to throw down their weapons: ‘Μολών λαβέ’ – ‘Come and get them!’
That evening two rallies took place, one in favour of yes, outside the ancient Olympic stadium where the first modern Olympics were staged in 1896, and one at Syntagma Square for the no campaign. The yes rally was held in the late afternoon, and was large and good-natured, but the no rally at Syntagma was one for the ages. Since I was a boy, I had attended some magnificent, life-changing rallies at Syntagma Square, but what Danae and I participated in that night was unprecedented.
We walked to Syntagma from Maximos with Alexis and other members of the cabinet, their partners and aides. On the way we were mobbed by rapturous supporters. As we approached the square, the crowd’s energy exploded. A sea of five hundred thousand bodies consumed us. We were pulled into its depths by a forest of arms: tough-looking men with moist eyes, middle-aged women with determination written all over their faces, young boys and girls with boundless energy, older people eager to hug us and shower us with good wishes. For two hours, struggling to hold hands so as not to be separated, Danae and I were absorbed by a single body of people who had simply had enough.
People from different generations saw their distinct struggles coalesce on that night into one gigantic celebration of freedom from fear. An elderly partisan from the Second World War pushed into my pocket a carnation and a piece of paper bearing the phrase ‘Resistance is NEVER futile!’ Students forced to emigrate by the crisis who had returned to cast their votes begged me not to give up. A pensioner promised me that he and his sick wife did not mind losing their pensions as long as they recovered their dignity. And everybody, without a single exception, shouted at me, ‘No surrender, whatever the cost!’
I believed they meant it. The banks had already been closed for a week. The hardship imposed by the creditors was plainly visible. And yet, here they were, these magnificent people saying in one word everything that had to be said: ‘No!’ Not because they were recalcitrant or Eurosceptic. They craved the opportunity to say a big fat yes to Europe. But yes to a Europe for its people, as opposed to a Europe hell-bent on crushing them.
That night, as Danae and I eventually found ourselves walking up the marble steps leading to parliament, the phrase I had been looking for to describe what all this was about finally came to me: constructive disobedience. This was what I had been trying to practise in the Eurogroup all along: putting forward mild, moderate, sensible proposals, but when the deep establishment refused even to engage in negotiation, to disobey their commands and say no. The war cabinet had never understood this, but the body of humanity that filled Syntagma Square that night surely did.
One for true believers
That night the months of frustration, each terrible moment in Maximos, every disappointment along the way, all the nastiness and the stress had been wiped away, leaving nothing but contentment, and yet I was still not convinced that the no campaign would win the referendum. The demonstration suggested support for the cause had risen, but with the banks closed and the media screaming blue murder at anyone who even contemplated voting no, success looked unlikely.
Over dinner with Danae, Jamie and some other friends at an outdoor restaurant in the neighbourhood of Plaka, I was asked if Alexis and Euclid would resign were yes to win. ‘Alexis will form a coalition government with the opposition,’ I predicted, ‘after most of the true believers resign or are pushed.’ And I would be long gone by then, I said. But Jamie insisted I was wrong. No would win, he believed, and my leverage with Alexis would skyrocket, as I would have played a large part in delivering the result. Unconvinced, I nonetheless raised my glass to toast Jamie’s optimism. ‘¡Hasta la victoria siempre!’ he said with an intense and committed look – ‘To victory, always!’
On the day of the referendum I drove to Palaio Phaliro, the southern Athenian suburb where I grew up and where my father still lives. Together we made our way to the polling station. Inside, the majority of voters were ebullient when they saw me, except for one or two who remonstrated angrily with me that I had closed down the banks. With the television cameras rolling, I told one angry man that the troika had given us an ultimatum and that accepting it would shape his and his children’s future. What we had done was to give him the opportunity to vote for or against it. ‘Vote yes if you think it is a manageable deal. We are the only government that have respected your right to decide. The fact that the troika decided to close the banks down before you got the chance to express yourself is something that only you can interpret.’
After voting, as I was helping my father back to the car, an elderly woman approached me, surrounded by the usual television cameras. She asked me sternly if I knew where she lived. I admitted I didn’t. ‘I sleep in an orphanage here in Palaio Phaliro. And do you know why they let me? Because your mother worked tirelessly to let vagrants like me have a permanent shelter.’ I thanked her for her spontaneous and wonderful memory of my mother.4 But she was not finished. ‘I bless her every day. But do these bastards know this?’ she said pointing at the cameras and the TV crews. ‘I bet they don’t and they don’t even care.’
‘It doesn’t matter,’ I assured her. Even if they didn’t, it was enough that she knew. Nonetheless, I was upset when on the evening news our heart-warming encounter was presented as me being accosted by a homeless woman blaming me for her destitution.
It was not until late that afternoon that I began to sense an historic victory might be on the cards. At my office I composed a piece, in English, for my blog. ‘In 1967,’ I wrote, ‘foreign powers, in cahoots with local stooges, used tanks to overthrow Greek democracy. In 2015 foreign powers tried to do the same by using the banks. But they came up against an insanely brave people who refused to submit to fear. For five months, our government raged against the dying of the light. Today, we are calling upon all Europeans to rage with us so that the flickering light does not dim anywhere, from Athens to Dublin, from Helsinki to Lisbon.’
By 8 p.m. I could see from the drooping shoulders and morose expressions of TV presenters that we had won. What I did not yet know was the extent of our victory. My fear was that a close shave would give Alexis the excuse to say we had a divided nation and thus insufficient support for a rupture with the troika. I told my team that the magic number was 55 per cent. If the votes for no were any greater, Alexis would have to honour the result. I thought carefully of what I would say to the journalists gathered in my ministry’s press room in order to give him the necessary impetus to do so. By 9 p.m. I had written my speech. Traditionally, ministers wait for the prime minister to make his statement before issuing their own, so I waited in my office for Alexis to address the press at Maximos.
At 9.30 I began to feel something was wrong. The results were more or less final, indicating that the 55 per cent mark had been reached, but Alexis was still holed up in his office. My chief of staff was pressurizing me to go to our press room as the journalists were getting agitated and were beginning to tweet that something sinister was afoot. I waited until after 10.00 p.m. I called Alexis. He did not pick up, and nor did a secretary. Wassily walked in to inform me that other ministers were beginning to speak to the media, issuing lukewarm statements in response to what was in reality an earth-shattering outcome. I could not allow this to continue. Our voters deserved a proper response.
So at around 10.30 I headed for the press room to make my statement, intending to go to Maximos straight afterwards to discover what was going on there. As I read out my prepared statement I had the very strong feeling that it would be my last as a minister. That feeling, combined with the memory of Syntagma Square two nights earlier, made me read it defiantly, brazenly even.
On 25 January dignity was restored to the people of Greece. In the five months that has intervened since then, we became the first government that dared raise its voice, speaking on behalf of the people, saying no to the damaging irrationality of our extend-and-pretend bailout programme. We confined the troika to its Brussels lair; articulated, for the first time in the Eurogroup, a sophisticated economic argument to which there was no credible response; internationalized Greece’s humanitarian crisis and its roots in intentionally recessionary policies; spread hope beyond Greece’s borders that democracy can breathe within a monetary union hitherto dominated by fear.
