“The Eurogroup is a very unpleasant place, including for Schäuble, Dijsselbloem and the ECB president Draghi. Centres of power are stressful by definition, with big egos and continuous conflict. If you’re a psychopath and you thrive on conflict, then the Eurogroup is the place to be.”
No other political debutant dominated the European news in 2015 like Varoufakis, while his ministership in Athens didn’t even last half a year. It’s like the TV commercial for the temp agency Tempo Team: they were five tremendous months. “Intense months,” he says himself.
“On my first day as the minister, I was told the country was going to go bankrupt in eleven days. On the third day, Eurogroup chair Jeroen Dijsselbloem visited and threatened to close all the Greek banks if I didn’t sign on the dotted line for an austerity package that I had denounced during the elections. I had more to swallow within 72 hours than most ministers have to take in their whole career. Fortunately for them, by the way.”
Anyone who thinks I have prophetic powers is a fool. Ten year olds can understand that the eurozone is falling apart
Varoufakis is in Geneva for the TED Global Talk, the internationally celebrated and prestigious platform where brilliant scientists (Stephen Hawking), former presidents (Bill Clinton) and people who have earned billions (Bill Gates) present their ideas. And now Varoufakis too. “I’ve taken up my old craft again,” he says about life after his departure as minister on 6 July. “Giving lectures and publishing. Only with a bigger audience.”
Switzerland, Australia, Great Britain, Ireland, Germany, Portugal, Austria, the 54 year old Greek is constantly on the road. But don’t call him a prophet. “Anyone who thinks I have prophetic powers is a fool. Ten year olds can understand that the eurozone is falling apart. The way Europe is directed from the back rooms makes a major disaster unavoidable. Politicians dodge that discussion. Government leaders, ministers, national parliamentarians all find themselves on dead-end legislative paths. And the European Parliament? Well, that is useless anyway. That’s why people are interested in what I say because I put a name on the problems.”
Let’s go back to your brief period in office first. What were the happiest moments during that time?
‘When I would take the lift down to leave the Ministry of Finance, away from the oppressive meeting rooms and complex discussions, enjoying being with normal people. They were a great source of encouragement.’
No pleasant memories with your counterparts in the Eurogroup at all?
‘Anyone who speaks about blissful moments in the Eurogroup should be locked up immediately for being a dangerous lunatic (Laughs). The Eurogroup is a very unpleasant place, including for Schäuble, Dijsselbloem and the ECB president Draghi. Centres of power are stressful by definition, with big egos and continuous conflict. If you’re a psychopath and you thrive on conflict, then the Eurogroup is the place to be.’
Or if you’re interested in power.
‘Ultimately, almost no one has any power. The centres have the power, not the individuals. Their power is undermined by opposing power, everyone cancels each other out. I’ve seen a lot of frustration in the Eurogroup.’
What do you regret about the five months being a minister?
‘That I trusted in the unity of the Greek government, or to be more precise: the unity within the war cabinet of seven people, including Prime Minister Tsipras and me. We were together day and night during that time. I slept the way you sleep in the trenches in a real war: a few hours here and there, with all your senses on edge. I trusted blindly in Tsipras, wrongly.’
Do you feel betrayed?
‘We from ‘the left’ have a terrible record of accusing each other of betrayal, condemning each other with increasingly toxic language. I don’t want to do that. But do I feel disappointed? Yes, hugely. Tsipras surrendered to the demands of the Eurogroup – without consulting me.’
Do you still have contact with your European colleagues from back then?
‘Certainly, with a few. But I won’t say who, that would damage them.’
Is it that dangerous to stay in contact with you?
‘I symbolise the resistance against the third bailout of 86 billion euros for Greece. A plan that none of my colleagues wanted, but which they approved unanimously. They’re in a terrible situation and I don’t want to make it worse.’
Do you remember why you got into politics?
My standpoint was to accept the bankruptcy and put our house in order
‘Absolutely, for the same reason that I’m travelling around to spread the same ideas now. Politics was never on my radar, it was not an ambition. But after the implosion of the Greek state in 2010, in fact the bankruptcy, I started campaigning with articles, a book and lectures, just like I am now. I said that borrowing even more under strict terms will squeeze the economy to ruins. That would be catastrophic and unfair to our creditors. My standpoint was to accept the bankruptcy and put our house in order. When Tsipras started to take my advice, I knew the day would come when he would ask me to put these theories and analyses into practice. At that point it ceases to be a request. It becomes an obligation, a tour of duty.’
That sounds very negative, like a chore.
‘There’s nothing wrong with chores. It is Kant’s categorical imperative: there are some things that you have to do. Animals have inclinations, we humans have duties. I never wanted to become the faculty head at the university, and found that everyone who did have that ambition had to be fired. A good professor wants to teach and write, not manage a department. Professors should take on administrative duties in turn, as a chore. That’s also how I think about politics.’
What does politics give and what does it take?
I thought that I could make a difference, a big difference, not just some meaningless difference
‘It takes your privacy and inner peace. It gives headaches, big headaches. If I’d said ‘no’ to Tsipras, my life would have been much easier, and I wouldn’t be sitting here in Geneva. But I would never have forgiven myself if I hadn’t tried. The wish not to have regrets later is what motivates me. I thought that I could make a difference, a big difference, not just some meaningless difference. I thought that I could help restructure the Greek debt, could set up an investment bank, and a ‘bad bank’ to manage the banks’ bad loans. That’s what I thought I could do. It didn’t pan out that way.’
Who is the boss in the Eurogroup?
‘Wolfgang Schäuble. He’s the puppet master who pulls all the strings. All the other ministers are marionettes. The president of the Eurogroup has no real power. Dijsselbloem has no authority; he is a soldier, a puppet.’
What do you mean no authority?
‘He can’t make any decisions without calling Schäuble.’
Not the French minister Sapin?
(Laughing) ‘Sapin? Oh, no! Schäuble is the grandmaster of the Eurogroup. He decides who becomes the president, he determines the agenda, he controls everything.’
And who leads intellectually?
‘Schäuble of course.’
Not the president?
In El Paìs, you called Dijsselbloem an ‘intellectual lightweight’.
‘Because it’s true.’
‘I don’t know. It’s a combination of nature and nurture. But that goes too far for this interview.’
Who did you listen to in the Eurogroup?
There was absolutely no reason for me to speak with Jeroen because he was neither willing nor able to have a real discussion, let alone interested
‘To Mario Draghi, a formidable economist. Draghi is very frustrated by the suffocating limitations of his ECB mandate. And I went to Schäuble for advice; he is cunning and has vision and authority. When I spoke with him, I didn’t keep any cards up my sleeve, and he didn’t either. Of course I didn’t go to Dijsselbloem: that would have been a waste of time. Dijsselbloem is a cog in a machine that he doesn’t understand himself. There was absolutely no reason for me to speak with Jeroen because he was neither willing nor able to have a real discussion, let alone interested.’
And Moscovici, the European Commissioner for Economic and Financial Affairs?
‘Moscovici? Ah, we were actually always in agreement, but he couldn’t deliver.’
Is that practical, stepping on everyone’s toes? You accused the ECB and the bailout fund, your creditors, of monetary terrorism; Italy would collapse if it didn’t help Greece…
‘But it’s true! Don’t forget that I was confronted with an extremely venomous press in Italy. It seemed like chemical warfare.’
But you needed something from your colleagues. Normally you don’t make enemies, you look for allies.
‘That’s what I did.’
Without success: it was 18 to 1 in the Eurogroup.
‘Not for my lack of trying. I visited Sapin in Paris. During the press conference, my speech was as diplomatic as you could imagine. In his office, behind closed doors, it was all hugs and cuddles, nothing but brotherly love. That Sapin distanced himself from me afterwards had to do with his agenda, the budget deficit in France, not with me or Greece. I went to my Italian counterpart Padoan, to Schäuble, to Draghi with the same message every time: I represent the most reform-oriented government ever in Greece.’
On 24 April, three months after you took office, you were sharply criticised by your colleagues during a Eurogroup meeting in Riga. They chewed you up and spat you out. After that, your influence quickly went downhill.
‘It absolutely was a turning point. But above all it was a conspiracy, a total plot. The evening before, there was a secret meeting of the ten most important people in the Eurogroup. I happened to run into them around 11:00 p.m. in the hotel lobby when I was looking for a friend to go for a drink. An frightening silence fell when I entered and said hello.’
You didn’t ask if you could join them for a drink?
‘I think I did, but there was so much consternation that they left immediately. The next morning, I walked into the meeting room: almost no one was there. When Greece came up for discussion, the door suddenly burst open and everyone pulled up a chair. It was so orchestrated. Then everything and everyone crashed against me.’
Did you record that meeting?
‘Of course, apart from the first one I recorded all the Eurogroup meetings! But no one got that information from me. Among my colleagues who leaked all kinds of things – especially about me – I was the only one with a sense of ethics. I recorded everything for one simple reason: those meetings often lasted so terribly long that, afterwards, I could barely remember what exactly had been discussed and happened. Everything took place in a big haze. After the first Eurogroup, I was so tired and stressed that I couldn’t deliver a good report to my government. Then I thought: what the hell, I’ll tape everything. In a normal currency union, there would be confidential minutes that you could fall back on.’
Back to the Riga turning point. After the end, Dijsselbloem and others called Tsipras: we have to talk about Yanis. He is a problem.
‘They said to Tsipras: if you want a deal, you have to get rid of Yanis. What they really meant was: stop your opposition to austerity, accept new loans, all the terms, and above all a high budget primary surplus. My whole reputation was based on my fight against exactly these Eurogroup programmes. The primary surplus they demanded would keep the Greek wound festering. Not one economist disputed that I was right. They knew that I would never accept such a package. That’s why the Eurogroup was looking for a political way to eliminate me: it was a conspiracy. In Riga, they succeeded in playing me and Tsipras against each other.’
Shortly after that Tsipras manoeuvred you to the sideline in the negotiations with the troika, the representatives of the ECB, the Commission and the IMF responsible for the implementation of the bailout package.
The troika wanted to drag the Greek government through the mud to humiliate us completely with a bank closure
‘I lost control of the discussion in Brussels and Tsipras gave the green light for the big surplus I was opposing. When I asked him about it he said: you have to give something to get something. I said: OK, what are you getting back? He answered: debt relief. I shouted: that’s not what you got; this is the stupidest thing anyone could have done! A few days later, I wrote my first resignation letter. I was sure that, whatever concessions we made, it would never be enough. The troika wanted to drag the Greek government through the mud to humiliate us completely with a bank closure. And even though I saw that coming, I didn’t send my resignation letter. I didn’t want to let my government down.
I didn’t even think Riga was that bad, hard criticism is part of the game. What was painful was that Tsipras submitted to the Eurogroup’s demands behind my back. The unity in the war cabinet was broken, the others began to capitulate. From that moment, my being a minister was no longer a chore. Torture is too strong a word, but it did become painful, very painful.’
In January you were the new kid on the block, a media star. Dijsselbloem came to meet you in Athens directly, something that other newcomers…
‘He wanted to pander to Schäuble. Score points with Wolfgang, make an impression. But he didn’t make any impression at all, certainly not on Schäuble.’
My question is: you had a unique chance. To paraphrase Michael Horn, the head of VW in America: you totally screwed up. What went wrong?
The Eurogroup’s strategy was to let us bleed, to keep putting us through the wringer
‘My biggest mistake – and only big mistake – was during a Eurogroup teleconference at the end of February when I agreed to the extension of the bailout programme that was signed by my predecessor, including all the outrageous conditions. That’s when I should have blown the whole thing out of the water. That would have kept the Greek government unified. But at that moment I was sitting alone in my office, on a telephone link with the rest of the Eurogroup, which is a difficult time to pull the trigger. It quickly became clear to me that the troika would never let go. Their coup d’état was already planned before we took power. There wasn’t anything radical about what I proposed – let Greece stand on its own feet again – but an accord with us would have been disastrous for the troika and the Eurogroup because it would show that resistance against the troika pays off. That glimmer of hope for the citizens was not permitted because there were elections in Spain, Portugal and Ireland, countries that had drained the cup of austerity to the bottom. An accord with us would make the Spanish premier Rajoy and his Irish colleague Kenny look foolish: ‘you see, you could have achieved something better.’ The Eurogroup’s strategy was to let us bleed, to keep putting us through the wringer: do we pay the IMF or our pensioners?’
The Eurogroup only had one request: deliver something now! And no trial programmes like using tourists and students as tax inspectors.
‘What’s wrong with that?’
You can’t borrow billions that way.
(Irritated) “Are you only interested in what they say, or in the truth?”
What intrigues me is the totally different experience of the reality. You and the Eurogroup were worlds apart. No wonder an accord was never reached. You say: give me time, I can’t walk on water. The Eurogroup says: you’re not doing anything.
‘That is pure propaganda! Of the most toxic kind. There was a government in Athens that fought against bankruptcy from day one, and got a hard NO to every proposal it made to prevent that outcome. That is all, there is nothing else. And then they blame us.’
And the Eurogroup says the opposite.
‘What do you want now: us or them? The truth is that the troika failed completely. There had never been an aid programme from the IMF in which a country lost 30 percent of its income. Never! But the Greek programme from the troika did lead to a drama of that scope. It was a total fiasco.’
Because the measures were never implemented, according to the troika.
‘Listen! During one of my first conversations with Schäuble, I told him: my biggest problem is the Greek tax authority. I don’t control it, I don’t trust the agency, I want to replace it. Not with one that is in the hands of politicians again, but an independent organisation. Can you help me? I told him, and I was hanged in the Greek press when that was leaked: I want a German to lead the new agency. Someone that you appoint.’
And what was his answer?
‘I’m not going to negotiate with you: that was his answer. The Eurogroup was completely uninterested in reforms. I had excellent help with my plans from the Americans Jeffrey Sachs and Larry Summers, who are not especially left-wing Syriza adherents! But Schäuble, Draghi, Lagarde… they had absolutely no interest. I go to bed at night with a clear conscious and a light heart. My team was the only one that wanted real reform.’
According to the Eurogroup, you only had one strategy: don’t move, wait until Greece is at the edge of abyss, and then the eurozone countries will still come with the billions.
(Angry) ‘That’s complete nonsense! The Eurogroup stalled the process so that our banks ran out of money and our government would collapse. That was their objective! And then accuse me of being obstructive, ridiculous! That’s how propaganda works: take the truth and turn it around. Goebbels wrote the manual for that.’
In Brussels they still wonder: was Varoufakis an evil genius or a complete amateur? As time goes by, they tend toward the latter.
‘Let them say that to my face. If I release the recordings of the Eurogroup meetings – and I will, at least my part – you’ll hear that everything I said was middle of the road: moderate plans, sensible economic arguments. The rest is lies.’
How is it possible that 18 ministers with above-average intelligence misunderstand you so badly?
‘You’d have to ask them why they lie.’
You say you only made one mistake, all the misery is the others’ fault.
‘There is no doubt about that.’
It is hard to believe you can lay all the blame outside yourself. Isn’t it time you took part of the responsibility?
If I was a crazy left-wing lunatic, they wouldn’t have been afraid of me. No, they wanted to get rid of me because I knew what I was talking about
‘No! I won’t do that. It was nothing but a coup, one big coup d’état. And it succeeded. I’m not taking any responsibility for that. The same thing happened in 1967, when tanks brought an end to democracy in Greece. Were the democrats responsible for that? Were the citizens of Prague responsible for the Russian tanks in 1968? I reject that completely! My speeches were moderate, my plans measured, my advisors were not left-wing lunatics. There was another reason that the other side poured poison and lies over me, and portrayed me as a dangerous radical while I was the most right wing minister in the cabinet. If I was a crazy left-wing lunatic, they wouldn’t have been afraid of me. No, they wanted to get rid of me because I knew what I was talking about. Because I was working with people like Sachs and Summers. Compare their assessment of my plans with those of the Slovakian and Slovenian minister. Put their CVs next to it and then judge who has more authority to speak.’
It is a very serious accusation: a coup d’état by the Eurogroup.
‘That is true, but that’s what it was: a coup. The Eurogroup would never tolerate a government that was elected on the basis of a programme that challenged it.’
Tsipras also dropped you.
‘Ultimately he gave in.’
He dropped you: he said about you that a good academic doesn’t necessarily make a good politician.
‘That is a great compliment. I think that the reverse is true for Tsipras. He didn’t fire me, I resigned. I didn’t accept this job to sign a new 86 billion euro loan that we can never pay off. With impossible conditions. Not even God could implement this programme! Nevertheless, Tsipras decided to press on, although the deal was imposed on him as a coup d’état. Tsipras is now in the midst of a tragedy in the classic sense of the word: he’s an actor in an impossible situation hoping for a deus ex machina. Oedipus also accepted his role, but it’s still tragic.’
When you took office, the third bailout package for Greece was estimated at 30 billion euros, when you left 86 billion was needed. You are the 50 billion euro man.
‘It wasn’t Varoufakis that cost 50 billion, it was the Eurogroup shooting down his plans.’
What is your political legacy?
‘That question is too lofty for me. I’m no Winston Churchill or François Mitterrand. My small legacy is the return of the politics of principle in Europe. I stood for something, was elected for that, couldn’t put it into effect, and left. This new politics, not twisting yourself up to stay in power, is something that Europe badly needs.’
In January, you were catapulted into international politics from nothing and then shot out again just as hard. What does that do to your ego?
‘It made me more detached, more stoic: just ask my wife. I don’t react to all attacks anymore. After all, it never ends. They lie through their teeth.’
Do you have a Christmas wish for Dijsselbloem?
‘Let me keep it polite and civil: I wish Jeroen all the best for 2016.’