Prior to the publication of my ADULTS IN THE ROOM, the Daily Telegraph serialised ten of the events the book turns on:
A strange visit by Merkel’s go-between
The blocked Chinese deal
The key Berlin meeting
Osborne meeting
Tapped phone calls
Coup d’état: How the government overthrew the… voters
Dressing with dash: The story of that leather jacket
The Obama Line
Threat to son
The Macron intervention
Read on:
THE STRANGE VISIT BY MERKEL’S GO-BETWEEN
In early March 2015 negotiations in Brussels reach another impasse. After a phone conversation with Alexis Tsipras, the Greek prime minister, Angela Merkel offers to send an emissary to Athens to try and break the deadlock. That man is Thomas Wieser, the president of the Eurogroup Working Group, but also a key player who Varoufakis describes as “probably the only deep establishment functionary equidistant from her and the German finance minister”.
The condition on which Chancellor Merkel sent Wieser to us was absolute confidentiality. Our ministries were not to be involved in planning his visit; there would be no government car to pick him up, and the meeting would have to be held at a secluded private residence. I decided that our flat was ideal. An unofficial car was sent to pick Thomas up from the airport and deliver him straight to us. The empty street outside our building, thanks to a cold grey day, put paid to any concern that tourists visiting the New Acropolis Museum opposite might recognize him.
It is fair to say that Thomas Wieser brought the weather with him into the flat. Our seven-person party was keen to welcome Wieser warmly. Wieser was equally keen to keep his distance. His first sentence was disheartening: ‘I’m happy to be here even though I do not know why I’m here.’ Surely the person who had asked him to visit us must have explained the reason, I asked. ‘I have no idea who sent me,’ he replied. ‘I just found a note at my office instructing me to board a plane for Athens.’
Unwilling to beat about the bush, I spelled out the facts: we were at an impasse, one that only Chancellor Merkel’s intervention could overcome. She had proved amenable to such an intervention and had offered to send him to us informally to discuss how to reboot the negotiations.
Incredibly, Wieser would have none of it, continuing to deny any knowledge of the chancellor’s involvement in his trip. Instead, over the course of a lengthy meal, he laid down the law with the charisma of a bailiff and the sensitivity of a litigator. Outlining the coming weeks and months, he carefully avoided the substance of the negotiations, instead giving us chapter and verse on Eurogroup and Eurogroup Working Group rules and constraints. From his litany of troika-speak, one thing of interest emerged: we should expect no easing of the squeeze on our liquidity before 30 April – which was presented as a natural, apolitical consequence of bureaucratic constraints.
In response I told Wieser that unless we received a sign from the creditors that they were serious about a compromise on the reform agenda and a sensible fiscal policy made possible by meaningful debt restructuring, we would not reach 30 April without a default to the IMF. ‘Independently of our preferences and political will,’ I said, ‘our liquidity will run out well before then.’
He replied that we could last much longer by plundering the reserves of non-governmental but publicly owned institutions such as pension funds, universities, utility companies and local authorities. Given that I was not willing to plunder the remaining reserves as he had suggested, I asked Wieser whether we could use €1.2 billion that Greece was owed by Europe’s central bank to to meet our IMF payments for March, buying us both extra time to negotiate. ‘It sounds reasonable,’ replied Wieser, advising me to send a formal request to Jeroen [Dijsselbloem, Dutch finance minister and president of the Eurogroup], his boss, for access to that €1.2 billion. (Days later, when I did so, Jeroen referred me to the president of the Eurogroup Working Group . . . Thomas Wieser! And what was Wieser’s verdict, now that he had been given the authority to decide? That what I was requesting was ‘too complicated’.)
Seeing no glimpse of a potential breakthrough, the only useful thing that remained was to try to establish some form of human bond between us – to at least bring some humanity into the proceedings, if only for the sheer hell of it. Euclid, Nicholas Theocarakis, Danae and I took the lead, changing the subject to anything other than the negotiations: we spoke of art, music, literature, our own families. For six hours in all we ate simple but excellent Greek food and drank a considerable amount of wine followed by Cretan raki. Thomas Wieser’s resistance was extraordinary. He ate and drank and smiled frequently, but the force field that he erected to prevent any camaraderie from developing between us proved impenetrable.
As the evening drew to a close, Nicholas asked Wieser if he was related to Friedrich von Wieser, the pioneering right-wing economist and Austrian finance minister whose thinking had shaped the minds of libertarians such as Ludwig von Mises and Friedrich von Hayek. Thomas answered that, yes, he was indeed the grandson of his cousin, but confessed that he did not know much about his works. Reaching into our bookshelves, I pulled out a thick volume that Nicholas and I had co-authored in 2011, in which we referred to von Wieser’s influence in a chapter aptly titled ‘Empires of Indifference’. I offered it to Thomas for him to keep. He accepted.
As he was leaving, heading to a hotel before his flight back to Brussels the following morning, I longed for my academic days, when disagreements were resolved through the power of argument rather than brute force. Weeks later, as the troika’s brute force was reaching its climax, I recalled one of von Wieser’s most memorable lines, wondering whether he would be pleased or appalled by his descendant’s part in the eurozone’s travails: ‘Freedom has to be superseded by a system of order.’
THE BLOCKED CHINESE DEAL
As the Troika continues to stop money reaching Greece’s banking system, Varoufakis does a deal with the Chinese to invest in Greece’s crumbling port and railways and – as a show of good faith – purchase €1.4bn in Greek T-bills [similar to gilts] to give the country precious space from its creditors. The plan, however, is thwarted by unseen hands.
On 31 March, the day Beijing had promised the breakthrough purchase of €1.4 billion in T-bills, I was at my office waiting for the phone to ring. The auction was meant to end at around 11.00 a.m. At 10.30, unable to contain myself, I called the ministry’s public debt manager. ‘No news yet,’ I was told, ‘but don’t worry. The Chinese make a habit of entering auctions at the very last moment.’ So I waited.
At 11.02 my phone rang. I jumped to answer it. ‘There’s good news and there’s bad news, Minister. Which do you want first?’ asked the public debt manager.
‘Begin with the good news,’ I said. ‘Well, the Chinese have entered the auction, but the bad news is that they only bought another €100 million.’
Before we had hung up, I was dialling the Chinese ambassador on my mobile. Once I had told him what had happened, he said, ‘I cannot believe this. Can I come to your office right away?’
‘Of course,’ I replied. Half an hour later, a frazzled Chinese ambassador was sitting on my red sofa. In what I believe to have been genuine anguish, he pleaded with me to believe that he had had no inkling that something like this would happen, that he was hugely embarrassed and that he would do all he could to get to the bottom of the shortfall. From within my office he tried to place calls to the Chinese ministry of finance but could not get through. So he went back to his office promising to get back to me as soon as he heard. Few hours later he called, sounding far more relaxed. ‘Minister, I can assure you it was a technical hitch. Beijing is very sorry about it. In two days’ time, when you have another T-Bill auction, the purchase will go through.’ I felt a mixture of relief and incredulity. On the one hand it made no sense for Beijing to lie via its ambassador, who appeared genuinely keen to cement our deal. On the other, the idea that China’s technocrats had simply made a mistake was equally unbelievable. Time would tell.
Two days later I was in my office awaiting the same call from our public debt manager. At 11.05 the phone rang. ‘There’s good news and there’s bad news, Minister. Which do you want first?’ Not again, I thought. ‘Please don’t tell me that they entered the market with another €100 million,’ I implored him.
‘Precisely what they did,’ came his reply. This time I did not bother to call the ambassador; I went straight to Maximos. There I told Alexis what had happened and suggested strongly that he contacted the Chinese prime minister.
The next day Alexis relayed the news from Beijing. Someone had apparently called Beijing from Berlin with a blunt message: stay out of any deals with the Greeks until we are finished with them.
When I spoke to the Chinese ambassador again, I tried to convey to him how our people felt when foreign powers, pretending to be our partners, steamrollered their hopes for recovery and dignity ‘I understand, I understand,’ he replied. And I believed him.
So ended a dreadful episode in the long saga of the creditors who had no interest in getting their money back – with the scuttling of a marvellous agreement between two ancient countries.
THE KEY BERLIN MEETING
By June 2015 negotiations between Greece and the Troika had reached a stalemate as the Greek government continued to refuse to sign the Memorandum of Understanding (MoU) with its creditors committing it to a swathe of new austerity measures. Wolfgang Schäuble, the German finance minister has suggested that Greece takes a ‘time out’ from the euro, but has been overruled by his chancellor, Angela Merkel. On June 8 Varoufakis goes to see Schäuble for the last time, and presents him with a Policy Framework paper with a new set of proposals.
My recollection is that Wolfgang found nothing to fault in my proposition. Later, seeking a second opinion on his response, I asked Jamie Galbraith [the American economist and Varoufakis supporter and adviser] to write down his impressions. Here is how he described Wolfgang’s reaction.
Schäuble listened to the presentation at length with close attention and body language that suggested no disagreement on any point of the argument. Varoufakis stated repeatedly that a solution should be definitive and not a predicate for further failure and ongoing bailouts . . . The most important fact about Schäuble’s response was that he said, repeatedly and with a shrug, that he has ‘no idea’ about how to resolve this matter.
I pressurized him for some kind of response. ‘Here I am, asking you, the finance minister of the richest and most powerful country in Europe, to tell me what I should do. You reject my ideas; your own proposal was rejected by your chancellor, and meanwhile the negotiations between my prime minister’s team and the troika in the Brussels Group are heading in a direction that is the opposite of a solution. What should I do, Wolfgang?’
He looked up for the first time in a while and said without any enthusiasm, ‘Sign the MoU.’ We had come full circle.
‘OK,’ I said. ‘Let’s suppose I do it. Let’s assume that I sign the damned thing. Tell me this: are we not going to be in the same situation again in six or twelve months? With another funding crunch feeding “Greece on the verge again” headlines, more recession, and a political backlash in the Eurogroup?’
Perking up a little, Wolfgang agreed and said, ‘This is why I told you to convince your prime minister to consider a time out.’
‘Except that your chancellor put an end to that discussion.’
‘Well, that leaves you with the MoU,’ he said, falling back once more on the same non-solution.
Only a move beyond reasoning and rhetoric could break the vicious cycle, I thought, a human gesture. ‘Will you do me a favour, Wolfgang?’ I asked humbly. He nodded warmly. ‘You have been doing this for forty years,’ I said; ‘I have only been doing it for five months. You know from our earlier meetings that I have followed with interest your articles and speeches since the late 1980s. I need to ask you to forget for a few minutes that we are ministers. I want to ask you for your advice. Not to tell me what to do. To advise me instead. Will you do this for me?’
Under the watchful eye of his deputies, he nodded again. Taking heart, I thanked him and sought his answer as an elder statesman, not an enforcer. ‘Would you sign the MoU if you were in my place?’ I was expecting him to give me the predictable answer – that, under the circumstances, there was no alternative – along with all the usual, senseless arguments. He didn’t. Instead he looked out of the window. By Berlin standards, it was a hot and sunny day. Then he turned and stunned me with his answer. ‘As a patriot, no. It’s bad for your people.’
A chink had appeared. Naturally, I tried to prise it open. I said that since we now agreed that the MoU was ‘bad’ and Grexit was off the table, an agreement like the one I was proposing was the only solution consistent with our mandate and duty to our people – the Germans as well as the Greeks. But by that stage Wolfgang looked like a broken man.
As I departed that day, I was not leaving behind me a Machiavellian dictator; I was leaving behind a sunken heart, a man ostensibly more powerful than almost anyone in Europe who nevertheless felt utterly powerless to do what he knew was right. As the great tragedians have taught us, nothing causes greater wretchedness than the combination of supreme authority and wholesale powerlessness.
OSBORNE MEETING
Soon after taking office, Varoufakis met George Osborne, the then Chancellor of the Exchequer. When it came to the Eurozone at least, the two men found they had more in common than might have been expected.
Osborne was among the first finance ministers I met after my election. The most startling aspect of that encounter – at least to those in the press who expected a frosty or outright acrimonious meeting – was that we found very little to disagree on. In the first few minutes of our discussion I suggested to him that ‘While we may disagree on the merits of austerity, you are not really doing much of it, George, are you?’
He agreed smilingly. How could he not? If an Austerity Olympics had been staged, Greece would have swept the board while Osborne’s Britain would have been an also-ran at the bottom of the medals table. Osborne also seemed appreciative of the help he was getting from the Bank of England…
‘They are behind me every step of the way,’ he told me, evidently relieved not to be in my situation, hostage to a European Central Bank that was doing precisely the opposite.
‘I envy you, George,’ I lamented. ‘Unlike you, I have a central bank stabbing me in the back every step of the way. Can you imagine what it would be like, here in Britain,’ I asked, ‘if instead of your “expansionary contraction” you were forced, like I am, into a “contractionary contraction”?’
He nodded with a smile, signalling if not solidarity at least sympathy.
TAPPED PHONE CALLS
In October 2013 transatlantic relations were sent into a tailspin by the revelation that the US spy agencies had been tapping the phone of Angela Merkel, the German chancellor. According to Yanis Varoufakis the Americans were still listening in to sensitive European government communications in April 2015.
My mobile rang.. It was [Columbia University economist and adviser] Jeff Sachs. Reluctant to convey my desperation over an unsecured line, I chose to share with him the only good news of the day: almost a month too late we were at last ready to default to the IMF.
Half an hour later my phone rang again. It was Jeff, laughing uncontrollably. ‘You will not believe this, Yanis,’ he said. ‘Five minutes after we hung up, I received a call from the [US] National Security Council. They asked me if I thought you meant what you’d said! I told them that you did mean it and that, if they want to avert a default to the IMF, they’d better knock some sense into the Europeans.’
It was around three in the morning, but I called Alexis to inform him. Despite the collapse of our united front, despite our shattered bond, such moments reminded me that we were, ultimately, fighting a common enemy.
Coup d’état: How the government overthrew the… voters
In Maximos [the prime minister’s official residence] the ministers and functionaries I encountered looked numb, uncomfortable in my presence, as if they had just suffered a major electoral defeat.
I waited in the conference room with other ministers, watching as the last results were declared on television. When the final number flashed up on the screen, 61.31 per cent for “no” in a turnout of 62.5 per cent, I jumped up and punched the air, only to realise that I was the only one in the room celebrating.
As I sat waiting for Alexis, I found a message on my phone from [former UK Chancellor] Norman Lamont: ‘Dear Yanis, congratulations. A famous victory. Surely they will listen now. Good luck!’ They would listen, I thought, but only if we were prepared to speak up. When [my wife] Danae joined me, I realised that not only were we the only happy people in the place but the only ones in jeans and T-shirts. It felt a little like being in one of those sci-fi movies in which body-snatching aliens have quietly taken over.
Eventually Alexis arrived and, half an hour later, addressed the nation on television. Two key phrases in his speech unlocked the vault of his intentions. One ruled out a rupture with the troika; the other was his announcement that he had just asked the president to convene immediately a council of political leaders.
On the morning after their decisive defeat, the pro-troika leaders of the ancien régime were being summoned to join him at the discussion table. “He is splitting Syriza and preparing a coalition with the opposition to push the troika’s new bailout through,” I told Danae. I waited another hour and a half as he held separate meetings with Sagias and Roubatis before Alexis would receive me.
It was after 1.30am when I entered his office. Alexis stared at me and said we had messed up badly. “I don’t see it that way,” I replied flatly. ‘There were plenty of mistakes, but on the night of such a triumph we have a duty to rejoice and honour the result.”
Alexis asked if the banks would open soon. It was a trick question. He was looking to justify his capitulation. I pretended not to understand, saying that to honour the “no” vote we had immediately to start issuing electronic IOUs backed by future taxes and to haircut Draghi’s SMP bonds. “Without these moves to bolster your bargaining power,” I said, “the 61.3pc will be scattered in the winds. But if we announce this tonight, with 61.3pc of voters backing us, I can assure you that Draghi and Merkel will come to the table quickly with a decent deal. “Then the banks will open the next day. If you don’t make this announcement, they will steamroller you.”
We talked for a long time. We reviewed the previous months, weeks and days. I gave a litany of his errors, pointing out the ways in which members of the war cabinet had jeopardised our struggle, often in collaboration with the troika and its operatives. I decided to put it to him straight: would he honour the vote, I asked, by going back to our original covenant, or was he about to throw in the towel? His answer was elliptical, but there was no mistaking the direction in which it headed: towards unconditional surrender.
The first time in that conversation that he spoke decisively was when he said, “Look, Yani, you are the only one whose predictions were confirmed. But here is the problem: if any other government had given them what I did, the troika would have sealed the deal by now. I gave them more than Samaras ever would, and they still wanted to punish me, as you said they would. Let’s be honest. They want to overthrow us. However, with the 61.3pc they cannot touch me now. But they can destroy you.” “Don’t worry about me, Alexi,” I said. “Worry about honouring the people out there celebrating tonight while you’re planning to give in.”
At that point Alexis confessed that he feared a “Goudi” fate awaited us if we persevered – a reference to the execution of six politicians and military leaders in 1922. I laughed, saying that if they executed us after we had won 61.3pc of the vote, our place in history would be guaranteed.
Alexis then began to insinuate that something like a coup might take place, telling me that the president of the republic, Stournaras, the intelligence services and members of our government were in a “readied state”. Again I fended him off: “Let them do their worst! Do you realise what 61.3pc means?”
I told him: “Look, tonight the people voted. They didn’t vote ‘no’ for you to turn it into a ‘yes’.” I told him he had to come out and say what I had said in my press statement earlier: that the “no” vote had given him the mandate he required to bring about a solution in cooperation with our European partners.
I told him we had to state clearly that we were preparing our own liquidity, as we had a duty to do when the ECB was keeping our banks closed.
“It will be very difficult for them to give us a solution, Yani,” he said.
“You keep making the mistake of thinking of a solution as something they give us,” I replied. “That’s not the right way to think about it. They need a solution as much as we do.”
Alexis said he was thinking of reshuffling the cabinet so as to stop the troika, the creditors and the media from targeting me.
“I would like to ask you to take over the economy ministry,”he said.
“No, Alexi, I’m not interested.” I told him. “Do you recall why I moved from America? Because you asked me to help you to liberate Greece from debt-bondage. I ran for parliament not because I was dying to be an MP but because I did not want to be an unelected finance minister while pursuing a substantial restructuring of our debt.
“Now, given your abandonment of that cause, I have no reason to be a minister in our debt prison.It’s OK. Let someone else do it.” When I saw Danae, she asked me what had happened.
“Tonight we had the curious phenomenon of a government overthrowing its people,” I said.
Dressing with dash: The story of that leather jacket
I’d left my suitcase, containing not just my change of clothes, but my overcoat, in a cab ahead of my “pivotal” trip to Europe. “Too late”, I thought. I would have to do some shopping in Paris.
I landed after 10pm on Saturday and was met by our ambassador in Paris, who dutifully rushed me to the Champs-Élysées in search of a shop that wasn’t closed. Only Zara was still open. I rushed upstairs to the men’s department to find they sold no coats and that the only vaguely suitable shirts they had were two ultra-tight ones, both blue. Lacking alternatives, I bought them. But what of a coat? The shops would be closed on Sunday and my meetings in London began at 8am on Monday and the temperature was below freezing. I was anxious enough at the prospect of confronting some rather powerful people; the prospect of trembling with cold as I did so was too much.
“Not to worry, Minister,” said the ambassador. “I shall run home and fetch a coat that I think will fit you.” Half an hour later he returned bearing a longish leather overcoat. Even I could see that it was not exactly ministerial, but I must admit I thought it rather swanky and offbeat. Little realising that two days later the coat would become famous, I gratefully accepted it.
Obama: You have no choice but to compromise
“Austerity sucks!”, said [US President] Barack Obama. “But you must compromise in your dealing with the institutions so that an agreement can be locked in.”
VAROUFAKIS: Mr President, we are ready to compromise, compromise and compromise some more. But we are not ready to end up compromised. OBAMA: You have no other alternative but to keep trying. And we will help. VAROUFAKIS: I must tell you that we are disappointed that [Treasury Secretary] Jack Lew blames the lack of progress on our side. OBAMA: [laughing] You know how it is. Finance ministers are more conservative than their leaders. VAROUFAKIS: [almost laughing] Not in our case, Mr President.
Threat to son
As a left-wing finance minister committed to taking on Greece’s corrupt oligocracy, Varoufakis made enemies who did their very best to unsettle him
He came home in the early hours of Sunday morning. Exhausted, Danae and I had already turned in but had been listening for the front door’s reassuring thud. Danae’s seventeen-year-old son had recently spread his wings and was observing the customary rites of an Athenian teenager on a Saturday evening: going out with friends to discuss the meaning of everything until late in the night,
On that night, moments after sleep had taken me, the landline rang. Conditioned to associate calls after midnight with family illness, I jumped out of bed to pick up. An eerily suave male voice asked, ‘Mr Varoufakis?’ Hazily I said, ‘Yes, who is this?’
‘We are very glad to see that your boy has returned. He had a great time, it seemed, in Psyrri. He then made his way back along Metropolis Street, taking a detour along Hadrian’s Road, arriving home via Byron Street.’
With a chill running down my spine I shouted into the phone, ‘Who the hell are you? What do you want?’
His answer was icy cool. ‘Mr Varoufakis, you were misguided to put certain banks in your sights. If you want your boy to continue to return home every day you will desist. There are better topics for you to meddle in. Pleasant dreams.’
My greatest fear had materialised.
Macron Intervention
Varoufakis clashed frequently with European finance ministers, but with one European colleague he struck up a strong relationship – that was Emmanuel Macron, then the French economy minister, now on course to be the next president of France.
EMMANUEL Macron, economy minister of France, texted me at around 6pm on Sunday, June 28 to inform me that he was attempting to convince President [Francois] Hollande and Sigmar Gabriel, Germany’s social democratic vice chancellor, to find a solution. ‘I do not want my generation to be the one responsible for Greece exiting Europe,’ he said.
Less than a minute later I replied, ‘But of course. Just know that we need an agreement that offers respite for the long run and a prospect that this situation will not be repeated in a few months.’
Emmanuel agreed. He would talk to his president and get back to me. ‘Sustainable solution is key, I agree with you,’ he said, proposing that he travel to Athens the next day, incognito, to have dinner with me and Alexis [Tsipras, the Greek prime minister] and to hammer out a deal between Athens, Berlin and Paris.
After midnight, while we were in the thick of preparations for the bank closures, Emmanuel wrote again to inform me that President Hollande was planning to issue a statement in the morning announcing the reopening of negotiations. ‘Would Alexis agree to go to Paris on Monday evening or Tuesday morning?’ he asked. I implored him to come to Athens himself instead. With the situation in Greece so volatile, Alexis could not leave the country for open-ended talks.
“OK,” Emmanuel said. “I am ready, and I am sure that Alexis, you and me could find a deal . . . I will convince the president tomorrow. We have to succeed!”
Deeply appreciative, I texted him: “I always felt that you and I could see eye to eye. The difficulty will be to find a solution that is viable for us and acceptable to Wolfgang.”
On June 29, the day he was meant to come to Athens, Emmanuel called, asking for a favour: could Alexis contact President Hollande to let him know that he was ready and willing to receive Emmanuel in Athens as the French president’s emissary? I called Alexis, explained the opportunity that was being presented to us, and he agreed. An hour later, however, Alexis called me back, understandably cross. ‘What’s going on? Hollande’s office replied that they have no idea about a possible mission by Macron to Athens. Is he pulling your leg?’
When I relayed this exchange to Emmanuel, his explanation shocked me. “The people around Hollande do not want me to come to Athens. They are closer to the Berlin Chancellery than to our government. They clearly blocked Alexis’s approach. But let me have his personal mobile phone number. I shall go to the Élysée personally in an hour to speak with [Hollande] and ask him to call Alexis directly.”
Some hours passed, but Hollande never called Alexis. So I texted Emmanuel: “Do I take it there has been no progress? And that your trip has been cancelled?”
A dejected Macron confirmed that he had been blocked by his president and the president’s entourage. ‘I will push again to help you, Yanis, believe me,’ he promised. I believed him, and of course I understood exactly how he felt.
Three months after my resignation, in October, Emmanuel invited me to visit him at his ministerial office even though I was not in government any more. He told me that at a summit meeting before his failed attempt to mediate with Alexis he had used my line that the troika’s deal for Greece was a modern-day version of the Versailles Treaty. Merkel had heard him and, according to Emmanuel, ordered Hollande to keep Macron out of the Greek negotiations. Merkel’s spell was every bit as powerful as I had imagined.
Five months earlier when the anti-austerity Syriza government had just been elected, Varoufakis, newly installed as minister of finance, goes on a tour of Europe to meet his new European colleagues.
“France is not what it used to be”
The Greek embassy’s German car arrived outside the hotel to take us to meetings with France’s finance ministers. I was met by an effusive Michel Sapin. A jovial man in his early sixties. Once we were sat down, I was asked to make an opening statement, which I used to outline the main items on our economic agenda, my debt-restructuring ideas, prefaced with an expression of allegiance to Europeanism and my contention that the Greek crisis, and its perpetuation, was wounding Europe unnecessarily. I explained that I was proposing a new relationship between Greece and the EU based on Jean-Jacques Rousseau’s concept of a contract between equals.
Michel’s response was that of a brother-in-arms: ‘Your government’s success will be our success. It is important that we change Europe together; that we replace this fixation with austerity with a pro-growth agenda. Greece needs it. France needs it. Europe needs it.’ It was the cue I needed. I explained how the ECB could partially restructure the whole of the eurozone’s public debt without haircuts and without asking Germany to pay for everyone else or guarantee the periphery’s public debt. I outlined how investment-led recovery could produce a new deal for Europe. The only thing that Michel did not do was suggest we join hands and rush out to storm the Bastille singing the Marseillaise!
As Michel and I were making our way from his office to the obligatory press conference, he informed me that Berlin had been in contact. They were very upset that I had come to Paris without also offering to go to Berlin. I was more than happy to go to Berlin too, I told him. The reason I was in Paris and not there was that he had invited me and they had not. Michel smiled. ‘You should go to Berlin immediately after Frankfurt. They asked me to convey this to you.’
In the press room Michel spoke first and began by welcoming me and saying a few words about the great sacrifices the Greek people had made during the past few years. But then, quite suddenly, his tone changed. The joviality and comradeship disappeared and were replaced with a harshness more familiar from the other side of the River Rhine: Greece had obligations to its creditors, and the new government would have to honour them; discipline must be maintained and any flexibility contained within the current arrangements. Nothing about the new Rousseau-inspired social contract that we had agreed upon. Not a word about ending austerity or adopting public-investment-led pro-growth policies for the good of all of Europe.
When my turn came, I stuck to my prepared statement. Although I managed to finish my prepared speech lauding solidarity and French idealism, I felt as if I had been punched in the stomach. As soon as we left the press room, Michel instantly switched back to his amicable joviality. Determined to maintain my exterior poise, I turned to look at him and asked, ‘Who are you and what have you done to my Michel?’
To my great astonishment, not only did he clearly understand what I was saying, he did not seem angered by it in the slightest either. Instead he stopped, and, switching to English almost as if he had practised the line, shared an opinion of historic importance and sadness: ‘Yanis, you must understand this. France is not what it used to be.’
In the months that followed, the French government and the country’s entire elite proved their inability, as well as reluctance, to deter attacks on our government that were, in the long term, aimed at Paris. While I never expected them to go out of their way to assist us against their interests, I was ill prepared for the French establishment’s abandonment of its own interests, which were not served by reinforcing the surplus countries’ domination of fiscally stressed ones. Michel Sapin’s performance that day is an excellent allegory for what is wrong in the French Republic.
