Yanis Varoufakis said George Osborne was trapped in a vicious cycle
Yanis Varoufakis, Greece’s outspoken former finance minister, has said George Osborne will “go down in history as a particularly inept Chancellor.” Mr Varoufakis said that the former UK Chancellor made fiscal targetsthat “entrapped him” in a “vicious cycle”.
Responding to a question about Mr Osborne’s replacement, Philip Hammond, on BBC Radio 4, he said: “I believe the new Chancellor is going to utilise this opportunity he is now getting to escape from the trap that George Osborne created for himself.
“George Osborne will go down in history as a particularly inept Chancellor. He created fiscal targets that entrapped him by insisting that by 2020 he would eliminate the budget deficit through consolidation, through cutting of government spending.
“Every time he made that statement, and every time he consolidated it, the public sector borrowed and his target moved further way.”
The economics professor – who was thrust into the spotlight when he became Greece’s finance minister for brief but turbulent period last year – added that once Mr Osborne was “caught up in that target of his own making”, he became more aggressive in cutting government expenditure, especially for the “weaker members of British society”.
Mr Osborne was sacked on July 13 as Prime Minister Theresa May told him he would not be a part of her Government. This came 12 days after the then Chancellor abandoned his target to restore Government finances to a surplus by 2020.
Mr Varoufakis, who resigned as Greece’s finance minister after a controversial six months in the role, said he believes Britain’s eventual Brexit will inspire several forces in the EU, such as Italy, to “go it alone”.
He also revealed he has held several discussions with John McDonnell who, this week, announced his economic plan for the shadow treasury, adding: “We have discussed what Britain needs on a large number of occasions and we are in full agreement that there is one word that encapsulates that which Britain is missing… and would make all the difference… and that is investment.”
He added that there was £900bn in the financial sector “sitting there doing nothing”, which should be invested.
“Outside of the South East and London you have stagnation, you have whole regions of England falling behind.
“The regions that voted for Brexit are the regions that feel heavily left behind. It is not immigration it is gross economic mismanagement.”
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PROFILE: Yanis Varoufakis
Role: Academic economist, former Greek Minister of Finance
- Born: 24 March 1961, Athens
Education
- University of Essex (BSc Mathematics)
- University of Birmingham (MSc Mathematical Statistics)
- University of Essex (PhD Economics)
Career
- 1982-1988 Economics lecturer at University of Essex, University of East Anglia, University of Cambridge
- 1987-2000 Senior Economics lecturer University of Sydney
- 2000-2004 Associate professor of Economic Theory at University of Athens
- 2004-2006 Economic advisor to Greek government
- 2005-present Economics professor, University of Athens
- 2015 Member of Greek Parliament, Minister of Finance
- July 2015 Resigns as Greek Minister of Finance
- 2016 Launches pan-European left wing movement Democracy in Europe Movement 2025 (DiEM25)
“This country must stop extending and pretending, we must stop taking on new loans pretending that we’ve solved the problem, when we haven’t; when we have made our debt even less sustainable on condition of further austerity that even further shrinks the economy; and shifts the burden further onto the have nots, creating a humanitarian crisis.”
- – Yanis Varoufakis,
- in New Statesman interview, July 2015
