Yanis Varoufakis on the consequences of Brexit – and why homelessness in Greece is set to rapidly escalate
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In the white heat of Greek recession, the rise of anti-austerity party Syriza and threat of Grexit from the EU marked the emergence on to the international stage of a new principal player. Rock star economist Yanis Varoufakis cut a suave figure with his leather jacket, chiselled looks and intelligent, eloquent dissection of EU fiscal policy and the crippling austerity its bailouts visited upon Greece.
Last September, after seven months as finance minister under Syriza, he quit amid a chaotic rebellion against the latest bail-out deal, which sparked a general election. Since then he has focused on academic writing, lecturing and launching his Democracy in Europe Movement 2025. As the future shape of Europe stands on a knife-edge, he has stepped back into the debate, and last week chose the annual global street papers summit in Athens to discuss the planet’s economic bandits, poverty and the necessity for publications like The Big Issue. And Mr Varoufakis had much to say on the fate of Europe – and Britain – in the event of a Brexit vote this week. This is just the beginning…
The Big Issue and street papers
There is something of great character to the street paper endeavour“At this street paper summit, the discussion, the overall give and take, the vibe was excellent. There is a wonderful irony to publications like The Big Issue or [Greek street paper] Shedia, or any of the variety of these publications. If you succeed in dealing with the issue that you are attempting to deal with, you effectively annul your own business. I felt exactly that way when I had a short stint as finance minister as the bank of the state. I felt that my job was to effectively make changes and have an impact so that I would no longer be necessary. There is something of great character to the street paper endeavour. I call it the partial gift exchange. The partial gift exchange of the transaction involved. When you buy a copy of The Big Issue, or Shedia, this is not exactly an act of philanthropy, it is not a gift – you get something. And having read several issues of these two newspapers, indeed I can safely say that you get a lot better quality than buying commercial. It’s not a gift – it’s a partial gift exchange between vendor and buyer.”
Greece’s homelessness crisis
“For anyone who is now observing the ranks of the homeless in Greece, be in no doubt that in the next 12 months this will escalate because these foreclosures are going to start in the next three or four months. They will be rapid, they will be vulgar and they will be brutish. Our government surrendered last July in acceptance, and now the homeless problem in Greece is going to get far, far worse.”
Negotiating with the European Commission, the European Central Bank and the IMF, and his bid to implement the ‘bad bank’ model set up in Ireland and Spain
“Let me share a few pointers from negotiating with this troika of bandits. The ‘bad bank’ proposal would take the deeply non-performing debt loans from the books of the banks to allow them to clean up their asset books and potentially lend again. At the moment, the big banks do not lend to anyone, as 50 per cent of their asset books is non-performing. Our argument was that this ‘bad bank’ and the public would take a hit to clean up the private banking sector so that it could start lending again, and prevent foreclosures on families in order to prevent a worsening of the humanitarian crisis of homelessness. There was absolutely no interest in even listening to these proposals.”
The European Union
“Europeans are turning against the European Union because of its hypocrisy. When it suits the established order to interfere, they interfere in a way that is akin to invasion. Last year they shut down our banking system to impose cuts upon the Greek government. In 1967 we had a coup d’état using tanks, last year we had a coup d’état using banks. There can be no greater interference in the life of a country than to close down its banks. And at other times, when you have clearly misanthropic government interventions which violate the rulebook of the European Union, as we do today in Hungary, in Poland, in Romania, sadly interference is not an important principle. Any union that disrespects consistency to such an extent eventually turns its people against it. And I say this as someone who does not want to see the European Union disintegrated but who feels that it is increasingly difficult to convince people out there that we should not allow it to perish.”
Brexit
“I campaign extensively for a radical in vote. The worst enemies of the Remain campaign are people like David Cameron and Tony Blair, who are campaigning on our side. With friends like that, why do you need Boris Johnson? I try to take a nuanced stance on this. I think it’s important to move away from Project Fear from either side. I don’t think that Brexit means there’s going to be anything tremendous that happens in the next day or the next two weeks. Those projections of the treasury that Britain is going to lose a third of its income, that Armageddon will hit, that house prices will go through the floor – none of it is going to happen. My reasons why Britain should stay in are not Cameron’s reasons. Similarly, the Brexit campaign has a very good argument regarding democratic sovereignty, which has been ceded to a large extent to an undemocratic – anti-democratic, I should say – cabal of bureaucrats and institutions.
That economic crisis, as it gets worse in Europe, is going to suck Britain in to a new depression“So you may say, why am I against Brexit? The reasons are two. First one is – you cannot leave, even if you vote to leave. You are stuck in the single market. The single market is not a free trade area – there are common industry standards, every service has to be policed according to regulations made in Brussels, environmental protection standards, legal market standards – all from Brussels. The same lack of sovereignty will continue when it comes to writing the rulebook for a great variety of economic and social activities. So why do you want to get out, if you can’t get out? By getting out, you are ceding these rules to an alien force in Brussels, in which you are not even participating. The second reason is that Brexit will speed up the political process of Europe’s disintegration. And that, of course, is going to make the economic crisis worse in Europe. That economic crisis, as it gets worse in Europe, is going to suck Britain in to a new depression. Even if you have left, that will happen.
“So, in this context, there are no great gains – and there are large costs for a Europe that will be nasty, brutish, and it will push the United Kingdom into developments that you don’t want. My message is in, and against. We stay in and we fight against the establishment. It’s the only chance we have.”
On being a heart-throb…
“You don’t expect me to comment on this?”
“The handsome Mr Varoufakis” was a commonly used phrase
“It was a surprise. But also an unpleasant surprise because every time this kind of lifestyle discussion came up, I knew that the issues were not being discussed. It was an attempt to trivialise and to shift the emphasis from the particular proposals, the practical proposals for solving problems.”
Yanis Varoufakis was speaking at the recent International Network of Street Papers summit in Athens
