As it happened – Yanis Varoufakis’ intervention during the 27th June 2015 Eurogroup Meeting

The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals – proposals crucial for Greece’s future in the Eurozone. The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt. I was even asked: “How do you expect common people to understand such complex issues?”. Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting! But nor did European institutions. After our request was rejected, the Eurogroup President broke with the convention of unanimity (issuing a statement without my consent) and even took the dubious decision to convene a follow up meeting without the Greek minister, ostensibly to discuss the “next steps”. 

Can democracy and a monetary union coexist? Or must one give way? This is the pivotal question that the Eurogroup has decided to answer by placing democracy in the too-hard basket. So far, one hopes.

Intervention by Yanis Varoufakis, 27th June 2015 Eurogroup Meeting


In our last meeting (25th June) the institutions tabled their final offer to the Greek authorities, in response to our proposal for a Staff Level Agreement (SLA) as tabled on 22nd June (and signed by Prime Minister Tsipras). After long, careful examination, our government decided that, unfortunately, the institutions’ proposal could not be accepted. In view of how close we have come to the 30th June deadline, the date when the current loan agreement expires, this impasse of grave concern to us all and its causes must be thoroughly examined.

We rejected the institutions’ 25th June proposals because of a variety of powerful reasons. The first reason is the combination of austerity and social injustice they would impose upon a population devastated already by… austerity and social injustice. Even our own SLA proposal (22nd June) is austerian, in a bid to placate the institutions and thus come closer to an agreement. Only our SLA attempted to shift the burden of this renewed austerian onslaught to those more able to afford it – e.g. by concentrating on increasing employer contributions to pension funds rather than on reducing the lowest of pensions. Nonetheless, even our SLA contains many parts that Greek society rejects.

So, having pushed us hard to accept substantial new austerity, in the form of absurdly large primary surpluses (3.5% of GDP over the medium term, albeit somewhat lower than the unfathomable number agreed to by previous Greek governments – i.e. 4.5%), we ended up having to make recessionary trade-offs between, on the one hand, higher taxes/charges in an economy where those who pay their dues pay through the nose and, on the other, reductions in pensions/benefits in a society already devastated by massive cuts in basic income support for the multiplying needy.

Let me say colleagues what we had already conveyed to the institutions on 22nd June, as we were tabling our own proposals: Even this SLA, the one we were proposing, would be extremely onerous to pass through Parliament, given the level of recessionary measures and austerity it entailed. Unfortunately, the institutions’ response was to insist on even more recessionary (aka parametric) measures (e.g. increasing VAT on hotels from 6% to 23%!) and, worse still, on shifting the burden massively from business to the weakest members of society (e.g. to reduce the lowest of pensions, to remove support for farmers, to postpone ad infinitum legislation that offers some protection to badly exploited workers).

The institutions new proposals, as expressed in their 25th June SLA/Prior Actions document, would make a politically problematic package – from the perspective of our Parliament – into a package that would extremely difficult to push through our Parliamentary caucus. But this is not all. It gets worse much worse than that once we take a look at the proposed financing package.

What makes it impossible to pass the institutions’ proposal through Parliament is the lack of an answer to the question: Will these painful measures at least give us a period of tranquillity during which to carry out the agreed reforms and measures? Will a shock of optimism counter the recessionary effect of the extra fiscal consolidation that is being imposed on a country that has been in recession for 21 consecutive quarters? The answer is clear: No, the institutions’ proposal is offering no such prospect.

This is why: The proposed funding for the next 5 months (see below for a breakdown) is problematic in a variety of ways:

First, it makes no provision for the state’s arrears, caused by five months of making payments without disbursements and of falling tax revenues as a result of the constant threat of Grexit that has been wafting in the air, so to speak.

Secondly, the idea of cannibalising the HFSF in order to repay the ECB’s SMP-era bonds constitutes a clear and present danger: These monies were earmarked, correctly, for strengthening Greece’s fragile banks, possibly through an operation that deals with their mountainous NPLs that eat into their capitalisation. The answer I have been given by senior ECB officials, whose name will remain unsaid, is that, if need be, the HFSF will be replenished to cope with the banks’ capitalisation needs. And who will do the replenishing? The ESM, is the answer I was given. But, and this is a gigantic but, this is not part of the proposed deal and, moreover, it could not be part of the deal as the institutions have no mandate to commit the ESM in this manner – as I am sure Wolfgang will remind us all. And, moreover, if such a new arrangement could be made, why then is our sensible, moderate, proposal of a new ESM facility for Greece that helps shift SMP liability from the ECB to the ESM not discussed? The answer “we will not discuss it because we will not discuss it” will be very hard for me to convey to my Parliament, together with another package of austerity.

Thirdly, the proposed disbursements’ schedule is a minefield of reviews – one per month – that will ensure two things. First, that the Greek government will be immersed every day, every week in the review process for five long months. And well before these five months expire, we shall enter into another tedious negotiation over the next program – since there is nothing in the institutions’ proposal capable of inspiring even the faintest of hopes that at the end of this new extension Greece can stand on its own two feet.

Fourthly, given that it is abundantly clear that our debt will remain unsustainable by the end of the year, and that market access will remain as distant then as it is now, the IMF cannot be counted upon to disburse its share, the 3.5 billion that the institutions are counting as part of the funding package on the table.

These are solid reasons why our government does not consider it has a mandate to accept the institutions’ proposal or to use its majority in Parliament in order to push it through and onto the statutes.

At the same time, we do not have a mandate to turn down the institutions’ proposals either, cognizant of the critical moment in history we find ourselves in. Our party received 36% of the vote and the government as a whole commanded a little more than 40%. Fully aware of how weighty our decision is, we feel obliged to put the institutions’ proposal to the people of Greece. We shall endeavour to spell out to them fully what a Yes to the Institutions’ Proposal means, to do the same regarding a No vote, and then let them decide. For our part we shall accept the people’s verdict and will do whatever it takes to implement it – one way or another.

Some worry that a Yes vote would be a vote of no confidence in our government (as we shall be recommending a No vote), in which case we cannot promise to the Eurogroup that we shall be in a position to sign and implement the agreement with the institutions. This is not so. We are committed democrats. If the people gives us a clear instruction to sign up on the institutions’ proposals, we shall do whatever it takes to do so – even if it means a reconfigured government.

Colleagues, the referendum solution is optimal for all, given the constraints we face.

  • If our government were to accept the institutions’ offer today, promising to push it through Parliament tomorrow, we would be defeated in Parliament with the result of a new election being called within a very long month – then, the delay, the uncertainty and the prospects of a successful resolution would be much, much diminished
  • But even if we managed to pass the institutions’ proposal through Parliament, we would be facing a major problem of ownership and implementation. Put simply, just as in the past the governments that pushed through policies dictated by the institutions could not carry the people with them, we too would fail to do so.

On the question that will be put to the Greek people, much has been said about what it should be. Many of you tell us, advise us, instruct us even, that we should make it a Yes or No question on the euro. Let me be clear on this. First, the question was formulated by the Cabinet and has just been passed through Parliament – and it is “Do you accept the institutions’ proposal as it was presented to us on 25th June in the Eurogroup?” This is the only pertinent question. If we had accepted that proposal two days ago, we would have had a deal. The Greek government is now asking the electorate to answer the question you put it to me Jeroen – especially when you said, and I quote, “you can consider this, if you wish, a take or leave it proposal”. Well, this is how we took it and we are now honouring the institutions and the Greek people by asking the latter to deliver a clear answer on the institutions’ proposal.

To those who say that, effectively, this is a referendum on the euro, my answer is: You may very well say this but I shall not comment. This is your judgement, your opinion, your interpretation. Not ours! There is a logic to your view but only if there is an implicit threat that a No from the Greek people to the institutions’ proposal will be followed up by moves to eject Greece, illegally, out of the euro. Such a threat would not be consistent with basic principles of European democratic governance and European Law.

To those who instruct us to phrase the referendum question as a euro-drachma dilemma, my answer is crystal clear: European Treaties make provisions for an exit from the EU. They do not make any provisions for an exit from the Eurozone. With good reason, of course, as the indivisibility of our Monetary Union is part of its raison d’ etre. To ask us to phrase the referendum question as a choice involving exit from the Eurozone is to ask us to violate EU Treaties and EU Law. I suggest to anyone who wants us, or anyone else, to hold a referendum on EMU membership to recommend a change in the Treaties.


It is time to take stock. The reason we find ourselves in the present conundrum is one: Our government’s primary proposal to you and the institutions, which I articulated here in the Eurogroup in my first ever intervention, was never taken seriously. It was the suggestion that common ground be created between the prevailing MoU and our new government’s program. For a fleeting moment, the 20th February Eurogroup statement raised the prospect of such common ground – as it made no reference to the MoU and concentrated on a new reform list by our government that would be put to the institutions.

Regrettably, immediately after the 20th of February the institutions, and most of colleagues in this room, sought to bring the MoU back to the centre, and to reduce our role in marginal changes within the MoU. It is as if we were told, to paraphrase Henry Ford, that we could have any reform list, any agreement, as long as it was the MoU. Common ground was thus sacrificed in favour of imposing upon our government a humiliating retreat. This is my view. But it is not important now. Now it is up to the Greek people to decide.

Our task, in today’s Eurogroup, ought to be to pave the ground for a smooth passage to the referendum of 5th July. This means one thing: that our loan agreement be extended by a few weeks so that the referendum takes place in conditions of tranquillity. Immediately after 5th July, if the people have voted Yes, the institutions’ proposal will be signed. Until then, during the next week, as the referendum approaches, any deviation from normality, especially in the banking sector, will be invariably interpreted as an attempt to coerce Greek voters. Greek society has paid a hefty price, through huge fiscal contraction, in order to be part of our monetary union. But a democratic monetary union that threatens a people about to deliver their verdict with capital controls and bank closures is a contradiction in terms. I would like to think that the Eurogroup will respect this principle. As for the ECB, the custodian on our monetary stability and of the Union itself, I have no doubt that, if the Eurogroup takes a responsible decision today to accept the request for an extension of our loan agreement that I am now tabling, it will do what it takes to give the Greek people a few more days to express their opinion.

Colleagues, these are critical moments and the decisions we make are momentous. In years to come we may well be asked “Where were you on the 27th of June? And what did you do to avert what happened? At the very least we should be able to say that: We gave the people who live under the worst depression a chance to consider their options. We tried democracy as a means of breaking a deadlock. And we did what it took to give them a few days to do so.

POSTSCRIPT – The day the Eurogroup President broke with the tradition of unanimity and excluded Greece from a Eurogroup gathering at will

Following my intervention (see above) the Eurogroup President rejected our request for an extension, with the support of the rest of the members, and announced that the Eurogroup would be issuing a statement placing the burden of this impasse on Greece and suggesting that the 18 ministers (that is the 19 Eurozone finance ministers except the Greek minister) reconvene later to discuss ways and means of protecting themselves from the fallout.

At that point I asked for legal advice, from the secretariat, on whether a Eurogroup statement can be issued without the conventional unanimity and whether the President of the Eurogroup can convene a meeting without inviting the finance minister of a Eurozone member-state. I received the following extraordinary answer: “The Eurogroup is an informal group. Thus it is not bound by Treaties or written regulations. While unanimity is conventionally adhered to, the Eurogroup President is not bound to explicit rules.” I let the reader comment on this remarkable statement.

For my part, I concluded as follows:

Colleagues, refusing to extend the loan agreement for a few weeks, and for the purpose of giving the Greek people an opportunity to deliberate in peace and quiet on the institutions’ proposal, especially given the high probability that they will accept these proposals (contrary to our government’s advice), will damage permanently the credibility of the Eurogroup as a democratic decision making body comprising partner states sharing not only a common currency but also common values.


58 thoughts on “As it happened – Yanis Varoufakis’ intervention during the 27th June 2015 Eurogroup Meeting

  1. “Can democracy and a monetary union coexist?”

    It is. Electorates in the rest of the Eurozone, not only representing more countries than the one electorate of Greece but absolutely far larger in size, reject a renegotiation of the terms given to Greece.

    • You are not considering the ongoing trends, Randy. The real problem is not so much the monetary union as it is austerity (austerity for the poor so the rich can plunder more and better). Besides Greece, the most obvious development is in Spain, where we have just witnessed the meteoric rise of Podemos in a way very similar to Syriza four years ago. But there are others: in Scotland the only major British party opposed to austerity, the SNP just rolled over, even in England there was a lot of people wishing they could vote for them. In Ireland the Sinn Féin, not long ago a tiny party, has become the second major party, in Portugal the Socialist Party has adopted a (dubious?) anti-austerity discourse and is posed to win, etc. Even the far right is adopting the same discourse (although it is again most dubious but obviously responding to a growing popular demand).

      It is criminal to make citizens pay for private ventures (broke banks) that have gone wrong, it is criminal to force states like Spain to privatize their savings banks when Germany instead keeps them safe as public facilities, it is criminal to force states to stop spending in what in effect amount to subsidies to productivity (public housing, health care and most other forms of welfare, all of which allow indirectly to reduce salaries) while Germany retains them, etc.

      Most of the problems are derived from austerity and “liberalization” policies and not so much from the common currency. However I reckon there are two big problems with the currency: (1) that the economies that are more normal are severely hampered in their capacity to export, competing in clear disadvantage not only against extra-communitarian states but also against communitarian ones like Poland or Britain or Bulgaria which have not adopted the euro, and (2) that the cost of life everywhere tends to that of Germany, causing internal demand to collapse (as well as many other quotidian problems). All this is not so much caused by the common currency but by its absurd rigidity: the euro began at near parity with the US dollar, but has been most of its history extremely overvalued relative to this initial reference value. 50% of the fault for this must be placed on Germany, the other 50% on the idiocy of all us non-German Europeans, who naively accepted those absurd terms which effectively create a gold-like rigid currency that is causing huge problems since day one but especially since the 2007-08 crisis.

      The tendency is to EU to break apart. Now it may be Greece, tomorrow probably Spain, then maybe France. When France breaks up, the EU can be considered defunct. But in the meanwhile it will have caused tremendous problems, a huge burden that will take decades to straighten up. Except for Germany and a few small satellites, which have treated EU as their colonial backyard and made huge profits out of it.

    • “The real problem is not so much the monetary union as it is austerity”

      That was inevitable. No one after 2008 was going to lend Greece even more money to subsidize a huge deficit, not other Eurozone countries and certainly not private finance. Austerity in one form or another was inevitable.

      “naively accepted those absurd terms which effectively create a gold-like rigid currency”

      This is what a modern currency generally is.

    • First: “austerity for the poor, public money for the rich” is not inevitable unless you favor the neo-feudalization of our societies and the neo-slavery that goes with it. If there must be austerity, the first ones to suffer for it must be the rich (and that’s precisely the opposite of what EU & co. are trying to impose in our little continent.

      Second: when you reach debt levels that you cannot pay, the only logical thing to do is to declare bankruptcy. Once you do so, you can start anew with maybe only surplus budgets but not the unbearable pressure and drain of a massive debt burden. The only “problem” here is that if we don’t get loans, banks do not get profits, but who cares about banks?! Let them fall!

      The problem of Europe is that there has been a doctrine of “banks are untouchable”, “banks are too important to let them fall”, when in fact we can do with a mere network of public banking facilities for the greatest part, facilities whose profits should provide for extra funds for social spending and overall investment, research included. However this public banking system was the first victim of EU’s dogmatic “liberalizing” policies (except in Germany, which keeps it intact for some odd reason).

      Banks are not necessary. Not just that: banks have become (if they were not at the origin already) the core problem. Let them fall.

      “This is what a modern currency generally is”.

      Not at all. The gold parity system was precisely dropped at the beginnings of the Toyotist period and it was such a Neoliberal as Nixon who did it. Modern currencies are fiat currencies which are managed by the state according to needs, usually allowing for some inflation to buffer up in times of crisis (too much inflation can be a problem but some inflation is just normal and even good).

      But my big complain is that even a stable euro should have never departed far from parity with the US dollar, which is (or used to be) the measure of all things economic in our globalized economy. Making it stronger dramatically eroded the European economy by making our exports non-competitive. The hyper-strong euro has made Europe weak, and that means that even the euro itself is weak now (because every currency in the end reflects the economy it exists in).

      Additionally the EU is not even democratic, so in the end the euro is managed only by an obscure bureaucracy which obeys who? The lobbies! And that’s the most worrisome of all because it means that we Europeans do not have control on our most important joint venture, only big companies and maybe some governments (also too influenced by those same big companies) control it, if at all. The fact that the euro, the ECB, is controlled by a guy who is at least as responsible for the Greek debt as any Greek government (Draghi was high in the Goldman Sachs hierarchy when that happened) is extremely worrisome and I personally think that Draghi should be fired for a number of reasons, including his blackmailing of Greece, and the ECB put under direct control of the European Parliament instead. We cannot afford such a key power to remain out of democratic control.

    • Apart from the whole idea of the European Central Bank being independent of political control, is there any reason to think that the European Parliament would behave any differently in this matter? Again, hostility to the various proposals of Syriza seems deeply embedded across the European political spectrum.

      Would you still favour this approach if the European Parliament behaved in the same way as the troika and Eurogroup?

    • I don’t hear the same kind of messages from Paris as from Berlin, so indeed there may be a difference. At the very least the debate would be where it belongs: at the political and popular representation level, there would be a debate at the very least, with all the implications. I wish the EU would be a space for joint political debate on the common public affairs such as this one rather than a mere stage for nationalist policies, particularly German imperialist ones.

      I do not think anyhow that the public banking system should be “independent” from democratic (not “political”) control. Every single institution which is not subject to democratic control becomes under the influence of undemocratic powers such as the bankster mafia. In democracy everything must be subject to the control of the people, more so if it wields such massive power. Democratizing the economy is our present challenge, possibly the ultimate democratic challenge, and it does seem to begin with finances.

      It is already a big problem that the ECB loans to private banks at near zero rate (effectively a gift from our public money, as it is below the inflation rate usually) and instead we common citizens and our institutions (the states and other representative political bodies such as municipalities, regions) are denied that. The whole problem of the design is that the system is oriented in favor of private corporations and against the people.

      That is simply wrong. Unless you are a bankster who wants to make short term profit at the expense of the European Peoples, that is.

      And that is the debate that has been stolen to the European People, and the power that has been usurped as well. Europe will be truly democratic or it shall not be. Only the victory of Syriza has brought back the debate where it belongs, at least to some extent and once again Europe owes to Greece for that. It may not be a monetary debt but it is certainly a debt of respect, which should at the very least cancel the other.

    • Does the rest of Europe owe Greece thanks, actually, when the rest of Europe seems to actually oppose the policies of the Greek government?

      Blind nationalism is, alas, always foolish.

    • The real question is: do they represent us? That’s what Spaniards have been cheering for years: “they do not represent us!” Because, when you go to elections and lie, or when you don’t even bother gauging (let alone respecting) the actual opinion of the people you claim to represent, when electoral systems are rigged to destroy the minority forces and diversity of opinions in general, to impose the opinion of a well organized and financed minorities against the plural majority way too often… in brief: when those who should be our representatives do not behave as such, democracy becomes a farce.

      And when democracy becomes a farce this stuff happens. I would think that the EU should organize a referendum on what must be done with the Greek crisis in all Europe, with questions such as:
      1. Must the Greek debt be condoned? If so, how much of it? [follows bracket of options]
      2. Must the burden of public debt in general fall on the poor or the rich?
      3a. Must countries which are or include tax heavens such as Britain or Luxemburg be kicked out of the EU?
      3b. Must countries which are not EU members but are tax heavens, such as Andorra, Monaco, Switzerland… be excluded from the Schengen Zone?
      4a. Must Mario Draghi be fired?
      4b. Must the European Central Bank be put under democratic control?


      Then we would know which is the actual European popular mandate. We should hold this kind of referendums every year or so, instead of relying on rigged representation systems. We should also reinforce popular representation and consensual decision-making in public media, so they do not depend on the particular government but rather reflect the plurality in the street. Personally I think that electing director boards of public TVs is at least as important as electing parliaments.

      The problem is that with the current 19th century style systems of “representation”, actual representation is anything but granted. Based on recent opinion polls for example, Merkel may represent most Germans but definitely Rajoy does not represent Spaniards at all (he’s just clinging to the armchair and imposing horrible fascist laws while he legally can).

      I want to be European like the Swiss, not like the Hungarians.

    • And Maju, more to the point, in a broader multinational such as that of the Eurozone, a single national electorate like that of Greece cannot unilaterally override electorates elsewhere in Europe. The new terms wanted by Greece are universally unpopular throughout the rest of the Eurozone. One might as well have in Canada a single province like Nova Scotia demand a recasting of Canadian monetary policy without regard to the interests and wants of the other provinces, never mind the Canadian government.

    • It’s not like Germany or other states are putting the issue under debate to referendum. In fact the EU oligarchies have more than once ignored the will of the people. Must I remind you that France, Holland and Ireland initially too rejected the European Constitution upfront. In other states like Britain, the Czech Republic or Denmark, referendums were aborted. But that same constitution was adopted with a modified name just years later.

      The EU, sadly enough, is not a democratic institution. It is also not an institution that invalidates national sovereignty. The EU is a sui generis confederation of sovereign states and should not try to override this sovereignty, much less as it is not willing to become a full fledged confederacy, with centralized social spending and centralized democratic institutions. Let Germany do what they will, let Greece as well.

      The EU is not like Canada but rather like the NAFTA area.

      Aside note: little Greece with its pride and daring is doing much more for the European peoples in general than Germany with all its corporate might). In fact the big problem of the EU is that Germany has not been up to its natural leadership role. Instead it has behaved like a colonial power and that is what is destroying the EU. I blame Schauble and Merkel, not Yanis and Tsipras. These are not fighting only the (much needed) battle of the Greek People, but they are leading the whole struggle of all the European peoples, a battle against banks and big corporations.

    • “The EU, sadly enough, is not a democratic institution. It is also not an institution that invalidates national sovereignty.”

      It is democratic. The democracy is more indirect than we might like, but every institution involved in the European Union, from national governments up to the supranational level, is a democratic institution responsible to electorates of one size or another.

      More to the point, from the moment of its foundation with the Treaty of Rome, the European Union has been explicitly about merging and transferring sovereignty. “Ever-closer union” does not come from nowhere. Denying that this is the case, or claiming that there was no reasonable way to know this, is ridiculous.

    • Indirect democracy is not democracy but usurpation. Today with our real time communication and data processing technology there is absolutely no reason anymore to allow that usurpation of people’s power via “delegates”, who more often than not behave as traitors to their voters.

      IMO elections should be held every one or two years, those delegates who do not fulfill their electoral promises shall face the judgment of voters immediately. It’s time to make democracy real, there’s no reason not to be at least as democratic as Switzerland. Anything else is a farce and deep in our hearts we all know that.

      Whatever powers the European Union must have, as well as any other institution, states included, should be managed by a system of direct democratic participation, in which revocable delegates are subject by honor to fulfill their electoral promises. Stop the farce, democracy and in general the management of our societies, our lives, is way too serious to be treated the way it is, as if people would be dumb.

      I would also like to open a debate on who controls the “fourth power”, the mass media, which IMO should also be removed from the hands of big capitalists and returned to the people. Just a note (I don’t want to abuse Yanis’ hospitality) but worth chewing upon: information and feedback are way too important to allow only a few individuals to control such a huge power.

    • “Just a note (I don’t want to abuse Yanis’ hospitality) but worth chewing upon: information and feedback are way too important to allow only a few individuals to control such a huge power.”

      Indeed. Greeks don’t deserve what Varoufakis and his ilk have done to them.

    • That’s manipulation. What I mean is that I do not deserve the TV I have to suffer, be it private or public. Context: Spain.

    • The theoretical and actual are 2 different concepts. The eurozone today is acting as a dictatorship and the unelected clowns running Brussels are of the lowest possible quality.

    • How is the Eurozone acting as a dictatorship by not doing as Greece wants? It is responsible to rather more countries with a rather larger combined population than Greece alone, and seems to be doing those countries’ bidding.

    • Maju is right. The EU is not a democratic union. It is at best a free trade zone whose rules and regulations are being negotiated by technocrats under heavy influence of national leaderships’ and corporate interests.
      The EU parliament has no real say in the lawmaking process other than rubber-stamping what has already been decided elsewhere behind closed doors. It does not vote the ‘executive’ branch into power. Instead the comission and its president get ‘elected’ by representatives of national governments during a completely intransparent process of back-room negotiations, in which – one must assume – the more economically powerful member states (e.g. Germany) have a lot more say in who gets to do what and follow which political agenda than the rest of them. After all, this is primarily an economic union rather than a true political one.
      And apart from this sad fact, the last years since the initial financial crisis hit have clearly shown that the comission itself at any given time is only as much of an executive branch as the european council (a cartel of national leaders and their ministers, clearly dominated by the most powerful ones) allows it to be. There is no democracy involved in the decisions of, for example, the eurogroup.

      One might argue that these national governments themselves are indeed democratically elected ones. But, let’s face it, governments have been known to flat out lie to their electorates if it serves their need to push through unpopular ‘reforms’, which are mostly ‘recommended’ to them by major corporate interest groups with virtually unlimited funds at their disposal to influence politics and – to some extent – public opinion.
      All over the continent, especially in eastern and – since the troika took over – southern european countries, these ‘reforms’ almost exclusively consist of cutting government spending for social security, privatizing public assets at firesale prices, deregulating the labour market, pushing down wages and liberalizing financial markets.
      One can safely assume that none of the respective electorates subjected to these measures by their democratically elected governments are especially fond of this process. But they are also being told that in order to be part of the EU or even the monetary union, there is no alternative to it and – most importantly – national governments have been able to shed any kind of responsibilty for the horrible consequences of austerity to their average citizens by declaring themselves bound to these transnational rules and regulations surpassing their own sovereignty while thereby serving the greater good of european integration that shall one day lead all of us to peace, freedom and prosperity.
      Which – in my opinion – is utter horsecrap and nothing but a smokescreen produced by the elites in order to sell policies that serve the interests of major banks and transnational corporations at the expense of the common people to just those same common people. But the fact that the EU and its rules exist the way they do makes it astonishingly easy for national governments to declare that there is no alternative and shift the blame for any misgivings voters might have about this kind of policy up to the supra-national level of the EU where there there simply is no democratically legitimized oversight. No checks and balances, just a stone cold technocratic framework contraption cobbled together by corporate lobbyists whose masters are the ones to reap the heaviest benefits from the policy it forces upon the average citizens.

      But even if one were to deny such influence and denounce it as socialist-, or anti-european conspiracy theory, one cannot change the fact that once the rules and regulations are in place, there is no way for democratically elected bodies (e.g. the european parliament) to change or even discuss them openly under supervision by the electorates they are meant to represent.
      Which renders the whole argument about whether the greek people have the right to out-vote the electorates of other member contries or not null and void, since none of these voters – including the german ones- were ever even given a real choice about whether they wanted these so called reforms imposed upon them or not. Instead, it was made abundantly clear to them that there was no alternative to biting that bullet for the sake of european integration as their only hope of facing globalized market competition, russian neo-imperialism or whatever other kind of apocalyptic external threat their governments managed to come up with.

      Which leads us to the problem at hand. In his point of view – that is, if one believes his public speeches and statements -, Mr Schäuble insists on ‘pacta sunt servanda’, meaning that everybody has to stick to the common rules and regulations previously agreed upon by the above mentioned power structure, no matter what the cost, because these rules define Europe as a whole and because – in his and his supporters’ opinion – even the slightest deviation from them would pave the way for an eventual disintegration of the european union itself.
      However, as the total failure of the austerity regime to produce economic growth in Greece over the last five years clearly indicates, what might have worked for Germany (which is also highly debatable, by the way) with its heavy dependency on a giant trade surplus, simply does not work for countries like greece who do not have the luxury of living off other nations’ debt but are in fact overburdened by their own.

      So, instead of even allowing an honest discussion about the actual usefulness and general validity of these rules, the germans insist on them being followed, even though they must clearly see that this leads to catastrophe in the case of Greece.
      Of course they claim to do so for the sake of serving the greater good and preventing the EU from collapsing in on itself.
      On top of that, the afore mentioned rules and regulations make it quite easy for the german government and its allies to wash their hands clean of any guilt for the resulting inhumane conditions in Greece and other deficit countries by referring to a transnational pseudo-constitutional framework to which they are practically subject by law and whose violation would cause even greater disaster.
      Additionally, it also allows them to appear to the public as law and order’s last line of defense against what they declare as anti-european and undemocratic interest groups such as an allegedly irresponsible, communist greek government devoid of common sense and unwilling to abide to common rules and regulations.

      One could also ask, why a clearly non-democratically legitimized institution like the IMF was even included in the negotiations (at the insistence of Germany) or who gave the allegedly politically independent (also on behalf of Germany) ECB which is also not subject to democratic oversight the mandate to participate in the Troika system which indeed very much influenced the political decision making process in the countries that had the misfortune to fall under its rule.
      Whether one believes that our political leaderships – excluding the likes of Syriza or Podemos, of course – actually believe that they are doing right by their citizens or whether they are merely the political arm of the capitalist elites is rather irrelevant. They have put themselves in a position from which they simply cannot allow democracy to reclaim sovereignty from the faceless technocratic framework they have subjected themselves to, because it would certainly mean political suicide for the lot of them.

      What we are seeing here is the (hopefully failing) process of turning Europe into a giant profit generator for the corporate and financial elites that produces mass unemployment as a waste product and whose mechanism, once set in motion, can not be stopped because its creators believed in the concept of perpetual motion and did not include an off-switch in its design. It is no wonder that the germans think this is a good idea. We certainly do love our machines.

  2. From the FT:

    Greek pension funds ration payouts

    Haris Theoharis, formerly the head of Greece’s independent revenue collection office, said the government was preparing to issue IOUs next month to pay more than 600,000 public sector workers as a first step towards readopting the drachma.

    He said a team from the national accounts office at the finance ministry was working on a “drachma plan” at the office of prime minister Alexis Tsipras.

    A government spokesperson denies this. But if this is indeed the case, then there may me a Plan B after all🙂

  3. Hi Yanis

    The EU has never been and is not a democratic organisation.

    Syriza is an organisation that is deluded by capitalism. Its lack of strategic vision has led it into a cul de sac. Consquently it is left with no other option but to fall back on a referendum that is going to further confuse the working class. The forthcoming referendum is ambiguous. It does not make clear as to whether it entails a break with the Euro or not. But even a break with the Euro is not a solution. Social revolution is the solution. However that is only feasible on a European basis.

    Syriza has run out of road and is strategically bankrupt. The referendum was called to prevent its breakup. In that sense it bears an opportunist character.

    The Greek question is a manifestation of the limits of capitalism. However Syriza and the Greek working relentlessly cling to illusions in it. Your book, The Minotor, made for very interesting reading. However it still demonstrates your illusions in capitalism.

    In or outside the Euro entails austerity. Communism transcends austerity.

    Paddy Hackett


    • That’s dogmatic, snubbing and discouraging, Paddy. When in your country you get the kind of situation Greece is in, feel free to share experiences, meanwhile I think the correct thing to do is (1) watch and learn (for good or bad, nobody is perfect), (2) build up solidarity networks to help Greece get through their own process at their own pace while weakening the position of the global bankster mafia in core Europe and elsewhere.

      Greeks can’t wait till the core of Europe wakes up from its conformist slumber, if it ever does… They have to take decisions now, in the real conditions and contradictions they live in. There’s no point waiting for the second coming of Saint Lenin… just as Lenin himself, or Mao or Castro and Che, or more modernly Chávez or Morales, did not wait for any supposed pre-condition to manifest: they did what they had to do when they had the opportunity according to the conditions they were immersed in.

      I also dream for revolution at pan-European level (and very probably Yanis does too, in his own terms) but that doesn’t seem like it’s going to happen any time soon. Neither the German nor the French nor the British real left is anywhere to be seen. Dialectics is a live thing and manifests when it does and the way it does, not necessarily when and how we imagine it. Today’s European class dialectic is flaring in Greece primarily and you’re telling the Antithesis to quit playing their role? C’mon! You are doing the Capitalists’ dirty job, even if unwillingly so probably.

      Every battle battle is important and must be won if possible.

  4. Excerpted and linked at my blog.

    I must say on this dramatic week, not just for Greece but for all Europe, that I do appreciate the commitment of Syriza with democracy and I pretty much agree with what you said, particularly that there are no provisions for exiting the Euro. Thinking in following Ecuador’s model? I guess it’s the only thing to do now, if that’s what the sovereign Greek People decides to do, naturally.

    On your legal question about the legality of your exclusion of the Eurogroup, I must say that it may be “informal” (in the sense that it does not have deciding power) but that it is defined by the Treaty of Lisbon as follows:

    “The Ministers of the Member States whose currency is the euro shall meet informally.”

    So if a member state whose currency is the euro, i.e. Greece, is excluded, it is whatever but NOT the Eurogroup. They cannot issue communications as “the Eurogroup” or pretend to be it.

    Also I believe that Djisselbloem MUST resign, as well as Mario Draghi, because of their awful behavior that shames us all European citizens.

    • “I must say on this dramatic week, not just for Greece but for all Europe, that I do appreciate the commitment of Syriza with democracy…”

      It would have been nice if the government had asked the citizens of Greece to vote on the lenders’ proposal prior to the June 30 deadline, don’t you think?

      Now with the lenders’ proposal expiring tomorrow and thus default imminent, what is the point?

    • As Yanis commented to the press the other day: “every time we make a concession and we walk three fourths of the road, the institutions do exactly the opposite”. The Greek Government has done every effort (maybe too much?) to reach deals up to the very last minute and yet the Troika has systematically sabotaged every single one of them. It is clear that their main aim, barring a total surrender of Greece, is to annihilate the Syriza government. However popular support has been only growing, showing that the Greek People is not as easy to manipulate as they’d like because they already had five years of those “deals” and know too well what they mean.

      It is also clear, I believe, that, barring a reduction of the debt burden (which was not happening by any accounts), the only solution is some sort of bankruptcy, which allows for a difficult but fresh new beginning. All this debt “relief” vicious circle was leading nowhere. At some point someone has to say “enough!”

      The Greek People is, luckily, the one to decide that, not like the Spanish people(s) for example, who are instead getting totally extremist repressive laws that make impossible to even demonstrate peacefully or speak freely. The banner of Democracy, whatever the qualms we may have, flies high in Athens, not Brussels nor Madrid. I envy the Greeks for this ability to be able to vote in the most important decisions that affect their lives. I wish we’d have that elsewhere in the EU.

      I could agree that a referendum might have been announced and organized earlier, better, without the pressure of imminent default, and that Tsipras was maybe not brave enough to take the step until he was placed between a rock and a hard place. I have the feeling that the Greek Prime Minister truly wanted a deal but that the Troika made it impossible: Syriza itself would have not backed this deal, even Yanis suggested he could resign if there was not a reduction of the debt burden. Only then he could be brought to his senses: let the Greek People decide, what else?

      I mean: the alternatives were to “go PASOK” (surrender) or “go KKE” (break up with EU and try to emulate Lenin without the soviets, or is it Bela Kun?) And judging on election results and opinion polls neither is what the Greek People wants. There may still be a third option, which is “go Bolivarian”, not without risks but more balanced maybe.

      This is very complicated: they are managing a country trapped in what the Troika has made contradictory desires: be part of EU but do so in a dignified manner, i.e. with some sort of minimal social rights and the power to manage their own economy, not just a mere colony of the bankster mafia. The problem for Greeks as for myself is that we want to be part of Europe but certainly not this Europe of ultra-liberalism, in which banks and big corporations are the only ones with real power. We want Europe for the Europeans, for the common Europeans and not for a bunch of mafioso thugs wearing expensive suits and ties and suckling from our taxes on top of that.

      But in any case any attempt at holding a referendum would have caused similar effects. The Troika will not have anything of it (democracy? that’s something we use for decoration only!): they would have broken the negotiations equally and attempted to choke the Greek economy exactly the same.

      If you are really Greek, as your nickname suggests, I think you should be happy and proud that you can cast your vote on the most critical decision for your country. Both choices have many contras but one is the known evil, i.e. the choice of fear, and the other is to stand proud and face the unknown, i.e. the choice of bravery. I know what would I vote but I cannot vote for you.

      Here they even changed the constitution to satisfy the banksters’ demands without consulting the people. They think that “democracy” is lying for a few weeks every four years and then using the acquired power to just smash the people to pulp, not fulfilling a single one of those promises.

      I wonder if the Greek People is harder to deceive because “demokratia” directly translates in your language for its true meaning: people’s power. Here many believe it just means farce and corporate feudal-like power.

    • As Yanis commented to the press the other day: “every time we make a concession and we walk three fourths of the road, the institutions do exactly the opposite”. The Greek Government has done every effort (maybe too much?) to reach deals up to the very last minute and yet the Troika has systematically sabotaged every single one of them. It is clear that their main aim, barring a total surrender of Greece, is to annihilate the Syriza government.

      I agree. The lenders are thugs. It would not be an overstatement to say that what they are doing to Greece is a crime against humanity. And that these same thugs, the last thing they want to see in Greece is a truly democratic government (especially a left one). But this has been known for years now, and it should not have come as a surprise to the current Greek government.

      If you are really Greek, as your nickname suggests,…

      Greek Canadian. And as for the username, the idea came from a Gore Vidal novel. Really, there is nothing apocalyptic about it …lol

      I think you should be happy and proud that you can cast your vote on the most critical decision for your country. Both choices have many contras but one is the known evil, i.e. the choice of fear, and the other is to stand proud and face the unknown, i.e. the choice of bravery. I know what would I vote but I cannot vote for you.

      If the vote were held a few weeks prior to the June 30 deadline, then, yes, there would have been a choice. Now what choice is there? The Greek PM has already decided. What we have now is nothing more than a glorified poll — an expensive, glorified poll.

      In any case, and don’t want to get into the politics here … all I care for now is that the misery of the Greek people does not worsen. I dearly hope that the Greek government has a plan for a worst-case scenario (default — Grexit). Someone over at Yves Smith’s site, Naked Capitalism, suggested that, in Modern Greek style, there is probably no Plan B …. just Systeme D. That is one frightening thought.

    • That’s not true: if the Greek people votes yes, it’s clear that, no matter how horribly it weights on their souls, Tsipras must sign the deal and Syriza must vote it in Parliament. That’s a horrible scenario but it’s what they have agreed to do.

      The advantages are that it prevents Syriza from blowing up. No deal could be passed against a party in rebellion, nobody or nearly nobody would do it unless the Greek People says clearly: that is what we want. If so the Troika wins but now knows that it is negotiation not just with “a leader” or “a government” but with a whole real people which will have the last word.

      If the people votes no (I hope so), then Syriza will have to manage the situation somehow. Probably declaring unilateral bankruptcy and other sovereign interventionist measures. Nobody is saying a word but, from what Yanis said, I understand that leaving the euro is not likely to happen unless the EU kicks Greece out of it (AFAIK it can only “suspend” membership and it has only one precedent: the suspension of Austria when the fascists ruled it), and even then Greece might still decide to keep using the euro, much as Ecuador uses the US dollar.

      In any case there are two very different options to choose between: take what the Troika “offers” (demands) or reject it. Unlike the Greek Government, the Troika is not apparently willing to accept the democratic choice of the people, but that’s precisely the task of the Government: to try by all means necessary to make them accept it.

      As Tsipras said, the position of the Government will be much strengthened if Greeks say NO to the “offer they can’t reject”.

    • Sorry, the second paragraph — ” I agree. The lenders are thugs….” — in my last comment to Maju should not have been in italics.

  5. Reblogged this on Ya,ya,ya and commented:
    Ante el empeño de medios de comunicación que hacen incapié que lo que se decide es la salida de Grecia del Euro, Varoufakis lo deja bien claro,como ya hizo en un artículo de hace unos años en este blog, cuando le negaba a P.Krugman que la situación en el año 2000 en Argentina y su solución podría ser similar para Grecia.

  6. It’s quite telling to see almost the entire concern from Brussels to be about the euro (and its deeply flawed architecture) and almost nothing about the torture of the Greek people. Berlin is already foaming at the mouth in preserving the currency which allows Germany to be a trade junkie. Shame on the hypocrites who pretend that they want to advise us about our own good which is nothing more than their exclusive good at our expense. Shame. Martin Scultz is emetic and Juncker slimy. Merkel clueless and Schauble a torture chamber psychopath. What a bunch of criminals.

  7. The german media is already in the process of shifting the blame for a supposed graccident towards the Syriza government, and thus again bending reality to the will of the ruling ideology.
    As far as I know, of all the people directly involved in the negotiations, you are the only one who insists on communicating your position directly to the public, without the disgusting back-channel trickery that seems to be all the rage in european politics these days. One cannot thank you enough for that.
    Holding the referendum is the only reasonable thing to do now. And I salute you for staying true to your cause!
    Whatever happens during the coming week, let it be said that the greek government will have fought to the last minute to defend democratic values and the rights of all european citizens to make their own choices against the misanthropic, ignorant and undemocratic regime of the technocrats. And the role that my government has been playing within this travesty of a negotiating process makes me feel ashamed for being german.

    • The guilty are always engaged in the blame game. Are there any people in Germany that don’t understand that it was strictly within the power of the Troika to propose a viable plan and that Syriza’s ability to deviate from the reasons that got them elected was between nill and zero?

  8. reblogged with comment: The Greek people rejected austerity while the UK incomprehensibly voted for more of it. Possibly the Greeks realized the difference between belt-tightening and strangulation – the latter happens when everyone’s work is drained off to pay debt that an unelected institution decided was a valid response to the economic crisis of 2008 caused by … oh oh … unelected institutions???…
    Courage Yanis and greek people.

  9. Reblogged this on My World, Your World, One World and commented:
    The Greek people rejected austerity while the UK incomprehensibly voted for more of it. Possibly the Greeks realized the difference between belt-tightening and strangulation – the latter happens when everyone’s work is drained off to pay debt that an unelected institution decided was a valid response to the economic crisis of 2008 caused by … oh oh … unelected institutions???…
    Courage Yanis and greek people.

  10. Greece has won already. If the euro keeps falling it means Merkel is practicing internal devaluation on the entire eurozone. Which means Germany steals from other Europeans which she is using as a buffer and it won’t be long before all savers in Europe realize that they have been robbed 40% of their savings as the euro plunges from $1.40 to $0.80 within a year.

  11. Yanis, thankyou for your honourable efforts these last 6 months. Many of us in Ireland have been watching closely and hoping you succeeded in getting fair treatment for the recovery of your country’s Troika imposed suffering.

    You got nothing, but it hasn’t been in vain. You have shown many more ordinary citizens, and removed residual doubts from many others, just how malicious, self-serving and contemptuous of democracy and majority citizens’ interests (everywhere) the Euro/EU Institutions, Officials and most politicians actually are.

    Whatever the European Project was, or was intended to be, it is clear that little has changed from rule by vicious sociopathic elites that sent millions to be slaughtered in frequent wars for their own narrow interests. There is no real solidaritary (or democracy), as desired by the vast majority of ordinary citizens, being expressed at the political or Institutional level.

    Time to show the rest of us what can be achieved using MMT macro/monetary governance with a new sovereign currency? I hope so.

  12. I have been warning Yanis for years now that the EU elite are a nasty bunch, not to be trusted and the best solution to this present monstrosity is decentralization, reduction of powers and downsized budget. Yanis had dreams about taming the beast ad creating a human face. Does Yanis have any more illusions after his experiences with them???

  13. This situation has been aggravated and has truly come to a head by the deepening socio-economic crisis in Greece and a loss of faith in a real democratic process over the last five years. In the last five months, there has been as much hatred as hope. On Sunday July the 5th we will witness Democracy at its best, in its birthplace.

    I believe our “common people” will understand the “complex issues” far better than any of the institutions and/or partners. For five years they have unfortunately suffered, lived and continue to live and suffer this daily horror of uncertainty, financial abuse and bullying. For over five years our “common people” witness daily the erosion of a dignified and sovereign people and country.

    « Ήρθε η ώρα για το μεγάλο ΟΧΙ »

  14. At a time when Europe should be working together, we see another area where it is still missing the big picture. Europe’s position in the world is under threat; we have terribly high unemployment, internal dissension on matters such as immigration and how to assist those member states being used as entry points by a vast number of illegal entries – and a serious flaw of a joined currency but two economic conditions with opposite dynamics.
    All of this at a time when Asia is still growing significantly – and is uniting in major economic formats such as AIIB – while USA continues to be a major force, with its strong technology giants dominating much of the world market. Even Africa is making considerable gains (somewhat based on Chinese investment, but also as governments work together to improve trade relations).
    The threat to the EU, and the external European states, is being ignored due to the infighting of the Euro Group and its constant battle to match the German and the Mediterranean economic positions.
    Perhaps a last chance is worth considering, where the Rest of the EU and external Europe is included, rather than ignored in trying to reestablish the economic position of the continent as a whole. In the same way as Asia is looking at an electronic currency, the ACU, to be a single trading intermediary of the AIIB states, always convertible to the fiat currencies of them, they are able to achieve the economies of scale of negotiating for a block including over 4 billion people and $25 trillion GDP. There is no political union, no need to trade between each state (if there is a war or major disagreement), but there is a simple alternative for the US dollar as a reserve currency, something that the euro has failed to achieve because of its structure.
    A ECU, made up of the other EU members, including the UK, Scandinavia and Poland, plus the EFTA currencies, notably Switzerland, as well as the euro, based on the prevailing rates of the fiat currencies against the US dollar and the ACU, would create a third leg for trade and investment. Then, whether Greece, Portugal, Spain or even Germany pull out of the euro, they would still be party of the ECU, with ongoing trading as a part of the group. A move to electronic settlement, in ECU or fiat currencies, is clearly better, but that applies in any event; note how India is already offering tax incentives to achieve this, not just for simplicity, but also as the way to collect VAT in real time as part of the electronic flow.
    If Europe followed the same format, much of the $200 billion annual losses on VAT to fraud and under-reporting would be recovered as well; perhaps that ought to be within the calculation of how to change the way Europe operates?
    Is this a solution for Greece and for other Euro members suffering from ongoing unemployment and austerity measures? It could be, it should be – even if time is so short, it ought to be, if Europe is to be seen as a cohesive working part of the world, capable of helping its population compete in the new world environment.

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