Varoufakis on Eastern Europe ‘A Connection Between Austerity and Xenophobia’

FRANKFURT AM MAIN, GERMANY - FEBRUARY 04: Greek Finance Minister Yanis Varoufakis speaks to journalists after a meeting with the President of the European Central Bank Mario Draghi, on February 4, 2015 in Frankfurt am Main, Germany. Varoufakis has travelled to Germany to re-negotiate the terms of Greece's debt. The finance minister has described the meeting with the European Central Bank as 'fruitful' as he prepares to meet with German Finance Minister Wolfgang Schâ§uble tomorrow. (Photo by Hannelore Foerster/Getty Images)

Interview Conducted by and

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.

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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