1. Along with the debt swaps would be an agreement that would allow Greece to enter the ECB’s quantitative easing programme, thus reducing our dependence on European taxpayers’ money. The investment initiative was to involve the European Investment Bank and the creation of a development bank utilizing the nation’s remaining public assets.
2. There was another, more personal, factor that may have been involved. In the summer of 2015 the term of the Eurogroup presidency expired. Luis was ambitious to replace Jeroen and was clearly soliciting votes from finance ministers at this time.
3. The co-signatories, as they appeared on the cover page, were: James K. Galbraith (University of Texas at Austin), Jeff Sachs (Columbia University, special adviser to the UN secretary general), Lord (Norman) Lamont (formerly Britain’s chancellor of the exchequer), Mariana Mazzucato (University of Sussex and author of The Entrepreneurial State), Thomas Mayer (director of Flossbach von Storch, formerly chief economist at Deutsche Bank), and Larry Summers (Harvard University, formerly US Treasury secretary).
4. Just before this Wolfgang and I had been at a meeting of finance ministers discussing the possibility of imposing a financial transactions tax (FTT) across a subgroup of EU member states. At that meeting the two of us managed to be in agreement for once, voting together against other member states’ objections to the FTT. When that meeting ended, Wolfgang retired to his office, where I visited him with my deputies.
5. The ‘other proposal’ he was referring to was that of a German firm of financial and investment advisers, Goetzpartners, whose proposals were consistent with my idea of a development bank utilizing public assets as collateral. In the weeks that followed I collaborated with the Goetzpartners representatives to improve my Policy Framework. See Note 7, below.
6. This is the scene as Alexis had described it to me. Of course I was not present and cannot corroborate Alexis’s account of exactly what was said and how.
7. This new document differed from the earlier Policy Framework in two major ways. The first was that I had incorporated, despite my misgivings, the fiscal targets that Alexis had accepted. As a loyal member of his government and his finance minister, I had to accept collective responsibility for the woeful concessions he had made while trying to salvage what remained. The second change was a major improvement in the design of the proposed development bank. This would in one stroke stop the fire sales of public assets the troika was insisting upon while putting an end to their underutilization by the Greek state. This policy initiative was developed in association with the German consulting firm Goetzpartners, an outfit with close connections to both the Chancellery and the federal finance ministry.
8. In fact, months later I put together my interpretation of Schäuble’s vision in an article published in Die Zeit entitled ‘Dr Schäuble’s Plan’: http://www.zeit.de/2015/29/schuldenkrise-europa-wolfgang-schaeuble-yanis-varoufakis. For an English-language version see https://www.yanisvaroufakis.eu/2015/07/17/dr-schaubles-plan-for-europe-do-europeans-approve-english-version-of-my-article-in-die-zeit/
9. In an op-ed I contributed to the German financial daily Handelsblatt on 24 July 2013 (‘Europe needs an hegemonic Germany’) I had surprised many by arguing in favour of a strong Germany as the best way of leading Europe out of its difficulties. In that context it should not have been surprising that I wanted a robust Schäuble singing in unison with an energised Merkel and doing the right thing. In my mind at least, that wish was perfectly compatible with a determination go to war against them if they insisted on doing the wrong thing by Europe by demanding our surrender.
10. In fact, like many other European countries, Greece had three VAT rates: 6, 11 and 23 per cent. But, dating back to the 1940s, the islands of the Aegean received a discount of 30 per cent on VAT because transport was so difficult and as a result the cost of doing business or living there was higher. Thomsen counted the discounted rates on the islands as an extra three, adding up to six rates nationwide. The fact that other countries such as Spain, which includes the Canary Islands, had similar arrangements was irrelevant to him.
11. The labour reforms Thomsen wanted were a commitment on our side not to reintroduce the right of trade unions to collective bargaining, and to release large businesses, mainly banks and supermarkets, from the legal restraint on mass dismissals.
12. A model’s parameters are its constants – its inbuilt assumptions – as opposed to its variables. The tax rate in our models was a constant, whereas the revenue from them was a variable, depending on myriad other factors. A parametric reform would therefore be a change in the model’s assumptions – in this case, the tax rate.
13. Kafetsi had been the museum’s inaugural director in 2000. For more than a decade she had struggled, mostly alone, to find a dedicated building in the centre of Athens for the museum. Eventually she succeeded in securing an old brewery for the purpose and having it suitably converted, but only weeks before it was due to open the Samaras government removed her from her position. A year later, after we had won the election, EMST remained closed. My sources reported that a banker was blocking its opening in order to prevent a letter of credit he had offered the museum from being cashed in.
14. See Chapter 2, ‘Blacklisted’.
15. See Chapter 6, ‘Home front’.
16. On 26 May Euclid voted against Elena; Stathakis and I voted for her, and Dragasakis abstained because, as he explained, Elena was clearly the most suitable candidate but, at the same time, the party did not want her.
Chapter 16: Adults in the room
1. See Chapter 13, Note 8.
2. A month after the banks were shut down, a German member of the European parliament, Fabio De Masi, wrote to Mario requesting a copy of that legal opinion. Mario replied that ‘confidentiality’ did not permit him to share its contents. Later, Fabio and I launched a campaign, Release #TheGreekFiles, involving politicians, academics, law experts and members of the public, to have this legal opinion released.
3. I also said, ‘The fiscal council would, under this agreement, monitor the state budget’s execution on a weekly basis, issue warnings if a minimum primary surplus target looks like being violated in the foreseeable future and, at some point, trigger automated across-the-board horizontal reductions in all outlays in order to prevent a slide below the pre-agreed threshold. That way a failsafe system will be in place that ensures the solvency of the Greek state and its primary surplus while the Greek government retains the policy space it needs in order to remain sovereign and able to govern within a democratic context.’ I proposed the deficit brake as an alternative to pre-emptive austerity. In effect I was saying to the creditors, ‘You let me cut tax rates and maintain the minimum pensions, and if I fail to raise incomes and revenues, the automated deficit brake will kick in to increase tax rates and cut minimum pensions.’ Having ignored this proposal, a year after my resignation my successor was forced to introduce both new pre-emptive austerity and a deficit break on top of it, i.e. a high surplus target with pension cuts and tax-rate hikes, plus an automated, pre-agreed, further spate of austerity, including even deeper pension cuts and even sharper tax-rate increases, to come into force in the event that their ludicrous targets were not met.
4. I said, ‘The conditionalities that we agree upon should be the basis of completing the current – the fifth – review. And at the same time we [should] have a new agreement with the ESM, using the same conditionalit[ies], allowing us to perform an SMP buyback from the ECB, with the SMP profits, which will be around €9 billion, to be disbursed in tranches, with reviews every time so that the implementation of the MoU is supervised properly. On top of that, we can have an arrangement that Greece’s participation in the ECB’s quantitative easing is also subject to the successful completion of these reviews of the new MoU. The only reason why I am tiring you with all this is that we need to answer the question: how can we ensure that the MoU we are working towards – the set of conditionalities – become[s] not only politically feasible but [is] combined with a financial arrangement that allows it to breathe … so that this Eurogroup is not saddled yet again, in a few months’ time, with more crunch meetings like this one.’
5. Nikos Kazantzakis’ epitaph reads, ‘I hope for nothing. I fear nothing. I am free.’ See also the first line of Janice Joplin’s ‘Me and Bobby McGee’.
6. See ‘The Greek Debt Deal’s Missing Piece’, 15 August 2015, by Landon Thomas Junior: https://www.nytimes.com/2015/08/16/business/international/the-greek-debt-deals-missing-piece.html
Chapter 17: Lions led by donkeys
1. Lord Adair Turner, former head of Britain’s Financial Services Authority, had also shared with me, at a meeting in Paris, his fear that Berlin was going to go for Grexit even though it would be a catastrophe for Europe. ‘They have convinced themselves they can contain it,’ he said.
2. Arendt used to say that she met Martin Heidegger in the German language.
3. The first pro-troika rally took place in Syntagma Square on 18 June, while I was in Brussels at one of the many Eurogroup meetings. A good ten to fifteen thousand people gathered, making Alexis and the rest of us feel uneasy.
4. My mother, Eleni Tsaggaraki-Varoufaki, served as a local councillor and deputy mayor of the Palaio Phaliro Municipality for twenty years or so. She had indeed been responsible for the management of the local facilities, including orphanages, that were converted into shelters for young and old people.
5. 62.5 per cent was a very high turnout given that no postal or remote voting was permitted.
6. His precise words were so offensive that I do not reproduce them here.
7. The executed men were held responsible for the rout of the Greek army and the sacking of ethnic Greek cities, villages and communities by the army of Kemal Atatürk and Turkish irregulars, eradicating all Greeks from Asia Minor, where they had lived since Homer’s time. Hundreds of thousands died and even more flooded into mainland Greece as refugees. A coup d’état ensued in Greece, and a military tribunal was convened at which the political and military leaders of the disastrous campaign were found guilty of high treason.
8. In response to the media frenzy that followed my revelation, I published an explanation of the thinking behind my parallel payments system in the Financial Times: ‘Something is rotten in the Eurozone kingdom’, 28 July 2015: https://www.ft.com/content/27db9c44-3483-11e5-bdbb-35e55cbae175
9. See Chapter 2, ‘“National traitor” – the origins of a quaint charge’.
10. This is not my comparison. I owe it to someone who appeared on a BBC television discussion programme who said, ‘Saying that Varoufakis is responsible for Greece’s economic woes is like saying Dunkirk was responsible for World War II.’
Epilogue
1. That annotated version of the August 2015 MoU can be found at: https://www.yanisvaroufakis.eu/wp-content/uploads/2015/08/mou-annotated-by-yv.pdf
2. This was the inaugural Europe Lecture of the University of Western Sydney, which I delivered on 23 October 2013 at the New South Wales State Library, Sydney. The entire text can be read at: https://www.yanisvaroufakis.eu/2013/10/25/the-dirty-war-for-europes-integrity-and-soul-europe-inaugural-public-lecture-uws-state-library-of-new/. An audio recording made by ABC Radio’s Big Ideas programme can be heard at: http://www.abc.net.au/radionational/programs/bigideas/the-dirty-war-for-europee28099s-integrity-and-soul/6261534
