Saturday 17 November 2018

Varoufakis: A Greek bearing a gift to challenge EU politics

Greece's former finance minister has launched a new campaign for the 2019 Euro-elections, writes Paddy Agnew

Yanis Varoufakis’s DiEM25 party aims to field candidates across Europe next year. Photo: Simela Pantzartzi/EP
Yanis Varoufakis’s DiEM25 party aims to field candidates across Europe next year. Photo: Simela Pantzartzi/EP

Paddy Agnew

In February 2015, at the height of Greece's economic meltdown, the then finance minister Yanis Varoufakis went to the Federal Ministry of Finance in Berlin to negotiate a way out of the mess. Given that Germany was Greece's main creditor, this was an obvious, if awkward port of call.

The huge Bundesministerium der Finanzen, Nazi-built in 1936, originally served as the Ministry of Aviation, headed by the notorious Herman Goering. Architectural historians describe the building as one built "in the typical style of National Socialist (Nazi) intimidation".

When Varoufakis stepped out of the lift, he found himself in a long cold corridor. Waiting for him at the end of the corridor, seated in his famous wheelchair, was the German Finance Minister, Dr Wolfgang Schauble. When Varoufakis neared Dr Schauble, he put out his hand to greet him. Dr Schauble, however, ignored the outstretched hand and, instead, rushed Varoufakis into his office to get on with the business.

Yanis Varoufakis himself tells that story in his book, And The Weak Suffer What They Must?. He goes on to recount how on that same day, a German Junior Minister "playfully" asked him: "When am I going to get my money back?"

The 57-year-old Varoufakis, the anti-austerity economist with the big motorbike, flashed across the European sky for six intense months in 2015, serving as the country's finance minister from January to July of that traumatic year. It is an understatement to suggest that he and the Alexis Tsipras-led government of which he was a member enjoyed a "difficult" relationship with Germany and other senior EU member countries.

In the week that Angela Merkel confirmed that she will step down as German Chancellor, probably by 2021 if not earlier, Yanis Varoufakis is unlikely to shed too many tears about her impending departure. Setbacks at recent local elections in both Hesse and Bavaria would seem to indicate that ''Mutti'' (Mother) Merkel is losing sway with German voters.

While some observers would argue that, to a large extent, Merkel has stood almost singlehandedly steadfast at the European helm, Yanis Varoufakis would beg to differ. Talking to the Sunday Independent and other members of resident foreign press in Rome last week, the articulate, affable Mr Varoufakis identified her as a leading player in a European establishment that has misgoverned the EU since 2010, promoting in particular "an awful policy mix of universal austerity for the many and socialism for the bankers".

Back in the summer of 2015, Varoufakis in the end resigned his post because he refused to agree to the terms of a German-inspired Eurogroup ultimatum. He had successfully campaigned against that ultimatum in a July 2015 referendum which returned a 61.5pc vote in favour of rejection. When Greek prime minister Tsipras told him on the night of the referendum that, despite the result, he had decided to accept the Troika's terms, Varoufakis immediately resigned, ruling Tsipras's decision a surrender.

Three years later, Varoufakis has not gone away.

He was in Rome last week for the launch of "European Spring", the campaign slogan with which his DiEM25 transnational, progressive party intends to contest next summer's Euro-elections, fielding candidates in France, Germany, Italy, Denmark, Poland, Ireland and maybe elsewhere. (DiEM25, by the way, stands for Democracy In Europe 2025)

At this stage, it is hard to see DiEM25 winning many seats across Europe, even if his leading Italian candidate, the charismatic Mayor of Naples, Luigi Di Magisteris, will command plenty of votes. However, this is one election where competing makes the point.

Varoufakis may be a sometimes controversial figure in his native Greece where some critics would argue that, rather than fix things as finance minister, he made them worse, in particular by annoying German and other EU partners. However, his original and outspoken thinking, expressed in impeccable English, not to mention a serious academic track record, mean that, outside of Greece, he remains a credible economist.

For example, later this month, along with US Democrat, Bernie Sanders, he will be launching the Progressive International in Vermont which "will issue an open call to political forces" from Africa, Asia, Europe and Latin and central America to join an international alliance.

Mr Varoufakis explains: "The fascists, the nationalists, the racists, people like Trump, Bannon, Salvini, are internationalists, they bind together magnificently. In contrast, progressives are failing (to make international agreements)...The fact that Matteo Salvini (the Italian interior minister) is gaining votes in Italy by becoming increasingly racist is simply a symptom of the inability of progressives to bind together to combine a rational approach to the problem of migration with European humanism."

Mr Varoufakis chose to launch his campaign in Rome because he argues that "today Italy is the ground zero of the EU crisis", referring to the ongoing Italy-EU tensions over the Italian budget for 2019. Varoufakis is an outspoken critic of the EU but he remains a convinced "Europeanist" who wants a democratic, Federal Europe.

One of his basic tenets is that the EU has been so badly governed over the last decade of "studied stupidity" that it has been unable to react to the current post-2008 crisis of capitalism, leaving the way clear for the "reckless, racist, xenophobic and anti-European" policies of such as Orban in Hungary, Kurz in Austria, Le Pen in France, Salvini in Italy and others.

To some extent, the EU and the European Central Bank (ECB) have been "held hostage" to a charter written by the Bundesbank, a charter that left the ECB with no Treasury and left 19 Treasuries with no central bank, meaning that individual countries could not save their national banking systems during a crisis. Ireland knows something about this.

This ill-conceived charter has not only undermined the eurozone but it also created the perfect conditions for Brexit. This meant that, at the very moment (post-2008) that the ECB was forced to shrink the money supply, the Bank of England, the US Federal Reserve and the Bank of Japan were busy pumping it out, boosting their money supplies.

One result of that was that hundreds of thousands of Italians, Spaniards, Greeks, Portuguese et al were attracted to England precisely when the then Chancellor of Exchequer, George Osborne, was imposing austerity on English workers - fertile terrain in which Messrs Johnson and Farage could work up plenty of anti-EU feeling.

To some extent, that same mistaken reasoning lies behind the current stand-off between Brussels and Rome over the Italian budget. Observers argue that if Italy, despite market turmoil and EU warnings, does not back down on its plan to increase its budget deficit to 2.4pc of GDP next year, then it will face fines and sanctions.

Varoufakis tells us that both parties are in the wrong - the EU for imposing fiscal rules that ensure stagnation in zero growth Italy and the Italian government for presenting a budget which does not boost growth whilst cutting taxes:

"Cutting the top tax rate, introducing building and tax amnesties will not boost growth. When the rich receive a handout, they take it to Switzerland or Luxembourg..."

Mr Varoukfakis, a regular visitor to Ireland, could not refrain from an observation on the Irish Presidential election. In an aside to the Sunday Independent, he said: "I think that Ireland is blessed to have Michael D Higgins as President. There has never been in the history of modernity a president with greater clarity and humanism than Michael D."

So, count your blessings.

Sunday Independent

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