Varoufakis on Eastern Europe 'A Connection Between Austerity and Xenophobia'

He failed as Greece's finance minister, but Yanis Varoufakis now wants to use his fame as a star leftist politician to change Europe. In an interview, he accuses Eastern Europeans of egotism -- with their fiscal policies and response to the refugee crisis.

Greek politician Yanis Varoufakis: "There's no conspiracy against Greece."
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Greek politician Yanis Varoufakis: "There's no conspiracy against Greece."

Interview Conducted by and


SPIEGEL ONLINE: Greek Prime Minister Alexis Tsipras, a member of Syriza like yourself, just presented his policy plans for his new government. His first term in office lasted only a few months. Do you think he will succeed in serving a full term this time?

Varoufakis: Perhaps, but it's irrelevant. The agreements with the creditors provide Alexis with absolutely no degree of freedom. The local council in Dresden has more power than the Greek government. Where this government has made a commitment to do something different is the assault on the oligarchs -- and they are shielded by the troika.

SPIEGEL ONLINE: Really? What is it that kept you from moving to apply heavier taxes on shipping magnates during your term as finance minister?

Varoufakis: Most of them are British citizens and their mansions in Athens are owned by offshore companies. But it's other oligarchs who are the real problem in Greece. It's construction companies that have enriched themselves with overpriced roads, bankers who still control the banks even though their institutions have received so much money from taxpayers, or supermarket owners who are able to push through prices that are too high with the help of cartels. We wanted to end all of these practices, but the troika was only interested in increasing taxes and reducing pensions.

SPIEGEL ONLINE: Tspiras will still have to implement many unpopular measures. Will that lead to further divisions within Syriza's left-wing alliance?

Varoufakis: No. The people who have remained loyal to Tsipras have already entered into a Faustian pact in which they have basically voted for the new reforms. Just look at the new rules on the pre-payment of taxes for small businesses. That's what you do if you want to destroy a country.

SPIEGEL ONLINE: Do you truly believe that?

Varoufakis: There's no conspiracy against Greece, we're not that important. Germany and France are unable to reach agreement on how to save the euro. Wolfgang Schäuble wants to introduce a disciplinarian currency union that would also have maximal controls over the French national budget. The French are resisting that. Against that backdrop, we were just a nuissance to the big boys with our suggestions for alternatives.

SPIEGEL ONLINE: But you also encountered fierce opposition from countries like Slovakia and Latvia.

Varoufakis: Latvia has been given accolades for its own austerity policies and that's why it is demanding them of others. But the reason it works there is two-fold: A large share of Latvia's population left the country during the crisis, so of course unemployment went down. And the Latvian banks also laundered Russian mafia money.

SPIEGEL ONLINE: Do you really consider that to be a full explanation? What about the Latvian state, which is very modern compared to Greece? The economy has been growing there for some time now despite the austerity measures.

Varoufakis: The jobs that are being created in the country are very bad in terms of quality. If Europe sees this as a success, then it has a problem.

SPIEGEL ONLINE: Italian activist and philosopher Franco Berardi, with whom you just appeared on stage in a panel in Berlin, comes to a very bleak conclusion is his new book. He argues that the financial industry determines the thinking of the entire political class today and that politicians now think like investment bankers. He argues that this has permanently destroyed the European values of humanism and democracy. Are you equally pessimistic?

Varoufakis: No, but the financial industry has in fact gained enormous amounts of power in Europe. At the same time, we have very brittle financial and monetary policies. This is why Europe is finding it so very hard to recover from the 2010 crisis.

SPIEGEL ONLINE: Are we experiencing the beginning of the end of the EU?

Varoufakis: Yes, but it doesn't have to be an inevitability. The United States has always responded to crises by establishing stabilizing institutions, like the Federal Reserve Bank. It was always an attempt to balance conflicting class interests. But from its very beginnings as the European Coal and Steel Community, the EU was designed as a politics-free zone. That's why we now need a major infusion of democracy: The Euro Group needs to be scrapped and replaced by the equivalent of a federal governing body.

SPIEGEL ONLINE: Instead, what we are seeing with the refugee crisis right now is how little unity there is in Europe. You have explicitly praised Germany's role in taking in refugees.

Varoufakis: I even gave Angela Merkel personal praise. Nothing gives me more pleasure than to find goodness and merit in a political opponent.

SPIEGEL ONLINE: Is it possible the refugee crisis will serve as a wake-up call for Europe?

Varoufakis: My worry is that the euro crisis is creating centrifugal forces in Europe that will give rise to ultra-nationalists and right-wing parties, especially in Eastern Europe, where there is a connection between austerity policies and xenophobia. It's a renationalization of all ambitions. They say: We want to be in Europe, but we want to seal our borders from foreigners; we don't want to take in any blacks, Muslims, Greeks or Portuguese. This is incompatible with the European Union.

SPIEGEL ONLINE: Together with German left-wing politician Oskar Lafontaine and other members of his Left Party, you have called for the creation of a "Plan B for Europe." One option being discussed is civil disobedience. Do you support that?

Varoufakis: I already tried that civil disobedience on my own as finance minister.

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philip_baker 10/09/2015
1.
Twenty-first century migration realities make an urgent and compelling case for the EU (acting through the UN) to seek a revision of some key aspects of the 1951 Geneva Convention and the 1967 Protocol Relating to the Status of Refugees. This, I would suggest, might be achieved by making use of the provisions of Article 45 (1) which essentially offer a fitting reminder that "Any Contracting State may request revision of this Convention at any time by a notification addressed to the Secretary-General of the United Nations". Indeed, one hastens to recommend a qualitative revision of Article 2, replacing the existing muted reference to the 'duties' refugees owe to their host country with a more substantive enumeration of their RESPONSIBILITIES to the citizens of countries providing them sanctuary. Surely, these responsibilities must include adherence to the rule of law, due respect for the rights of others and a demonstrated reverence for tolerance and individual choice. Whenever and wherever the activities of 'refugees' pose a credible threat to law and order and social cohesion (as witnessed recently at the Calais terminal), then expulsion under Article 31 should be effectively and efficiently applied. However, such effective and efficient application of the expulsion provisions of Article 31 must necessarily engage with the constraints of Article 33 relating to the prohibition of expulsion or return of 'refugees'. For ease of contemplation, Article 33 (1) prohibits expelling or returning a refugee "in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion". Therefore, Russia's recent campaign of air and cruise missile strikes in Syria, widely perceived as specifically targeting Sunni-dominated sections of the country, will only further increase the uncontrolled mass migration of Sunnis into the EU. It will also substantially complicate efforts aimed at screening out and returning those likely to pose a threat to law and order and social cohesion. Related to the financial challenges that come with managing and assimilating migrant flows, is the principle of 'equal access to relief' that is enshrined in Article 23. More specifically, Article 23 requires the host country to extend to a refugee "the same treatment with respect to public relief and assistance as is accorded to their nationals". In light of recent humanitarian statements of welcome to an UNLIMITED number of refugees, judicious application of Article 23 could portend more singeing cuts to existing EU welfare budgets.
Marek 10/09/2015
2. Embarrassing babble
What ignorant nonsense this gentleman is peddling! He believes that Latvian economy was cured by emigration and by laundering Russian mafia money. Leaving the second point with no comment, one has to ask why didn't Greece use this miraculous method? When people leave, economy shrinks and this clearly doesn't help with debts. His comments on "Eastern" - in fact, Central - Europe are similarly 'enlightening.' Except for Hungary, far right (and extreme left) parties are weak, much weaker than such parties in most Western European countries or Greece. His reconstruction of central European arguments on migrants is a caricature. So the question is, why Der Spiegel felt an urge to interview such an ignorant in the first place? Well, bravo, Der Spiegel, another job well done in the desperate propaganda attack against those who do not want to endorse German naivety.
rafael 10/10/2015
3. Embarrassing babble
I am not so sure. By the way, why don't you negate that Latvian banks handled (or are handling) money which has a scent of mafia. Also, your comparison of Latvia and Greece holds no water. Latvia, like it or not, still benefits from her reputation of gaining independence.And. what exactly do you mean by"reconstruction" ...on migrants. Latvian president uttered some words that no national of Latvia could be proud of the country. So, give Varoufakis some slack, and do yourself a favor - come down from your pedestal.
seanl 10/11/2015
4. Loaded Interview
I do not wish to defend the man, but I feel I should point out that the way the interview is framed and many of the questions exhibit a negative bias. No doubt the interviewer caught Varoufakis in a corridor somewhere and blurted out some quick questions to which Varoufakis blurted out some quick answers. The questions are poor for the format as they would require essays to explore, not 5 seconds. If I were cynical I would say the questions were designed to initiate as emotive a reaction as possible. What is the interviewer trying to ask when he asserts that the Latvian state is more modern than that of Greece? I don't agree with the assertion and any answer would necessarily require time to examine that premise and define metrics of comparison and the parameters of what is meant by the 'state' and 'modern'.
fuuuuu 10/11/2015
5. @2
On "Eastern" The last time I checked, there was a far right wing party partnering with the "centre-right" in the ruling coalition of the Finnish government + in combo with austerity. There goes your "except for Hungary" Latvia's output levels are still below crisis, indeed many with potential have left the country, similarly as with other austerity countries (Spain, Portugal etc.). And those were mostly younger people and hence you had a noticeable drop in unemployment. There is nothing nonsensical about these claims unless you have a very selective view on the matter. To come to some reasons for the actual rebound other than Russia Mafia money - Compared to elsewhere in Europe, banks actually returned to lending, with a high demand by non finance organisations and households as illustrated in the 2010 bank survey here: https://www.bank.lv/public_files/images/img_lb/izdevumi/latvian/citas/banku_aptauja/bank_lending_survey_jan_2010.pdf Most of the "LOOK AT US" happened during 2013, look at the numbers after 2013, the short spike in productivity, well, was short. This as well can be partially explained by Bank's lending practices, which had been tightened again by then. Additionally you might want to look at Scandinavian bank lending within the country, particularly the Swedes.
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