Yanis Varoufakis: A Bizarre Champion for ‘Remain’

Yanis Varoufakis achieved very little during the short time he held public office. Therefore, it seems bizarre that he should come to Belfast to outline why Brexit will be bad for Northern Ireland or Ireland.

Varoufakis’ attempts to negotiate more favourable terms for Greece’s monstrous debt, fell on deaf ears, in the few short months he was Greece’s Finance Minister.  He argued, and there was merit in his argument, that the Troika (the IMF, ECB and EU Commission), was heaping debt on Greek and European taxpayers (rather than on the banks themselves).  In short, the Greek bailout was all about protecting banks and shafting the citizens of Europe.

Varoufakis argued that the people of Greece should reject the bailout terms mandated by the Troika (and especially by the ECB and EU Commission). In July 2015, the Greek people voted ‘No’ to the bailout – with Varoufakis arguing for a ‘No’ vote. Indeed, he threatened to resign if the Greek people voted in favour of the bailout. They didn’t. But he resigned anyway.

It is perplexing why Varoufakis seems to think that the EU has any merit given his experiences with the Greek bailout. His own experience was of an ECB and an EU Commission that represented only the interests of the European establishment and the systemically damaged European banking system. He failed to face them down. His own Party, Syriza, failed to face them down.

Instead Greece, like Ireland, capitulated to the terms mandated by the Troika – with the people paying the price while the failed banks survive.  Indeed some 70% of Greek government debt was held by foreign banks – with German, Italian and French banks likely to have suffered most if Varoufakis got his way. Mario Draghi, President of the European Central Bank, was formerly the Governor of the Bank of Italy, Italy’s central bank.  His full time job these days is overseeing the bailout of failing European banks and central banks.

Varoufakis’ own experience negotiating with the EU was that it refused to budge and refused to accept the will of the people. His plan for the renegotiation of Greek debt was welcomed by the left and the free market right alike (like the Adam Smith Institute in London). It was also mandated by the people of Greece in a referendum. But despite all of this, it was rejected and the ECB bulldozed its way over democracy.

Varoufakis’ support for reform of the EU has as little hope of success as his Greek debt plan. His support for Remain in the UK referendum made no sense given his experience negotiating with an EU that is beyond reform.

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  • Conchúr Ó Conghaile

    Jeff. If you’d ever actually spoken to an actual Greek person, you’d find that most Greeks are overwhelmingly in favour of the EU as it has helped transform their country from a forgotten backwater that was emerging from a brutal military dictatorship.
    Although Greece has treated fairly shoddily by the ECB in recent years, not many Greeks would advocate leaving the EU, the country is hugely dependent on tourism and exports and the EU has helped them immensely Any Greek would think that actually leaving the EU would be a completely daft thing to do.

    You’ve such an Anglocentric view of the world that your opinions on the rest of Europe are completely ignorant

  • Korhomme

    The IMF until recently thought that health services were a ‘luxury good’ that could be dispensed with. Unsurprisingly, Greece saw a return of malaria when such ideas were (financially) enforced.

    It’s clear, too, that the neoliberal ideas meant that the ‘bail outs’ of the Greek economy went, not to Greece, but to ‘bail out’ those banks who had lent to Greece.

    And the rigid enforcement of ideology has meant a marked reduction in the size of the Greek economy, unemployment levels of 50% among the young, and no possibility of any repayments of debt. That is, those lenders who were foolish enough to lend have been rescued; the Greeks have been abandoned. The idea of a ‘bad debt’ has vanished.

  • Kevin Breslin

    Brexiteers generally don’t need to speak to people … they have a gnosis that gives them a psychic understanding of how everyone in the rest of the planet must feel like called a television.

    Free will is just scripted in their heads.

  • Kevin Breslin

    I love how Leavers think that being on the conservative right automatically puts them on the side of the moral right.

    Once the UK government ratchets back to Suez crisis level isolationism reflecting on its lack of importance, it will find the disassociation with reality that didn’t work in the 1950’s still won’t work in the 2010’s.

    The UK is growing its budget deficit at a more alarming rate than Greece, at a time where it is likely to endure a lost decade as a result of a hard Brexit’s failure to launch.

  • Kevin Breslin

    The Brits and Americans were lenders to that Greek economy too. The only kind face that have even suggested a knock down on their lending to Greece has been the Cypriots. Of course the German SNP through Schultz have suggested reducing the debt to the Greeks may kick-stark some growth in the troubled Eurozone economy but it has limited democratic appeal to some of the German taxpayers they had borrowed from.

    Greece is pretty much like the “Northern Ireland of the United Kingdom” of the European Union.

  • Katyusha

    I love to hear Yanis speak, actually.
    Someone who is actually on the side of the people against the onmarching ride of globalisation, with the understanding of global economics necessary to form realistic strategies.

    Yanis is right. The EU has problems, but breaking it up only causes more fundamental problems.

  • Slater

    Greece is like Northern Ireland.
    Cheaper to throw money at it than allow it to wreck the place, be it the UK and GB or the EU and Germany.

  • Fear Éireannach

    Yet notwithstanding the details of events in Greece, the Greeks have enough sense not to leave the EU unlike the lunatics in Britain.

  • burnboilerburn

    la la land

  • burnboilerburn

    he Greek issue is far from resolved. While Germany insists no debt writedown will be allowed, the IMF are insisting there is no other option. Either way, Greece is better placed to survive within the union than outside. The schiftit will hit the fan soon enough as further bailout payments are due, the Germans in this instance will eventually have to give in, and they will give in; but after the election.

  • aquifer

    Yep the EU were not baling out Greece, they were baling out German and French banks who were silly enough to invest in a property bubble.

    Yanis is an economist, one of those damned experts who understand concepts like economies of scale and common standards to promote trade and jobs.

    His talk was interesting, him recalling that the German finance minister was going to punish Greece to teach France a financial lesson!

    What financial lesson will the EU will teach us on exit.

    (Cue claims of economic liberation and prosperity. Take names for later.)

  • aquifer

    The Brits had a veto on all the EU directives they whine about, but did not use it.
    This suggests they do not know what is important to them, or that they are crap negotiators. Not a good sign for post Article 50 Brexit negotiations.

  • aquifer

    The problem the right has is that many EU governments were centrist, so EU directives were Social Democratic in tone. The EU was also actively pursuing environmental sustainability and resource efficiency, which cuts across major vested interests in manufacturing and energy.

    It seems that some of the DUP’s Brexit budget was contributed by someone linked to Saudi Arabia. Who else chipped in?

  • aquifer

    Except that the Germans are refusing to acknowledge the value to the whole economic system of transfer payments.

  • aquifer

    Many of the people who voted leave felt ignored by the UK political system. Expect some attention seeking behaviour and faith-based bonding, not necessarily accompanied by economic arguments.

  • aquifer

    The Tory press saw EU regulations on cross-ownership coming down the track and threw a pile of rocks on the line. Will they care who loses out?

    Don’t expect NI’s border and welfare problems to headline any GB edition.

  • Old Mortality

    “The UK is growing its budget deficit at a more alarming rate than Greece,”
    That may be true Kevin but just look at gilt yields. Investors do not seem overly concerned. Being outside the Euro is a considerable advantage in these circumstances since domestic investment institutions would consider the currency risk of buying foreign bonds not worth the extra yield that might be obtained. There was no such comfort for Ireland or Greece. I recall that one Irish-owned insurance company had only 10% of its portfolio in Irish government bonds at the time of the crisis.

  • John Smyth

    Greece cannot finance its present debt. Can someone tell me how adding a further 40billion Euros of debt helps? As Varoufakis has said increasing the level of debt without some form of debt relief is nothing more than “fiscal waterboarding”.

  • Kevin Breslin

    Not all Germans, this is a matter of political negotiation.

  • Kevin Breslin

    If the Euro is so risky, explain why it’s the second biggest reserve currency in the world.

    If having an unconstrained currency is such an advantage why can’t Ukraine clear its debts by simply monetary policy.

    I believe a lot of the risks in Irish and Greek bonds have nothing whatsoever to do with the Euro.

    We see with the British economy due to reach Euro parity this year at the cost of higher inflation that just being outside the Euro doesn’t do much for the stability of the purchasing power of the average industrial wage.

  • Kevin Breslin

    Well the NI border is going to be linked to the overall discussion on the customs union agreement.


    I don’t expect the Conservatives to offer much in terms of Social protection, for denizens or migrants.

  • Fear Éireannach

    Doing something against your own interests as a means of getting attention should be the stuff of comedy, not politics.

  • Old Mortality

    Perhaps I didn’t make myself clear so let me try again. UK as well as Irish pension and life companies have future liabilities to meet. They attempt as far as possible to match assets to liabilities in terms of income streams and maturity. By investing in foreign currency bonds, they are exposed to the additional risk of currency fluctuations. So there is little incentive for UK funds to invest in Euro-denominated bonds because the extra yield does not compensate for the risk of adverse currency movement. Indeed, the risk premium currently inherent in Greek bonds and formerly in Irish bonds had nothing to do with the Euro but much to do with the perceived credit-worthiness of Greece and Ireland. However, an Irish life or pension funds do not expose themselves to any currency risk if they choose to buy German Bunds instead of Irish bonds, or even Greek bonds. In short, Irish investors can shun their national debt without incurring additional risks while their counterparts in the UK cannot. That is one important reason why 10-year gilts still yield less than 1% in spite of your anxieties about UK public borrowing.

  • Kevin Breslin

    UK public borrowing has already had a bad effect on its credit rating, a few bad shocks from leaving the EU could damage the UK position even further.

  • Old Mortality

    It’s the yield that matters – not the credit rating – because it tells you what investors believe. Few large investment institutions would take sovereign credit ratings very seriously in any case since they are usually compiled by lesser (in terms of remuneration) beings. .

  • aquifer

    “just look at gilt yields” If an economy collapses the shares and bonds will be gone, only the government has the power to extract enough cash to pay back. So gilt yields can be low or even negative.

  • aquifer

    The Observer has a report today that one third of the tweets coming up to the vote were automated, and they were all for leaving.

    I do not think that we will ever see that £350m per day for the NHS.

    The Brexiteers were using some very sophisticated software to target messages that particular voters would respond to. The £350M for our British NHS will have pressed both patriotic and socialistic buttons. Or should we say triggers?

  • AxelHeyst

    And remember, it’s not the Greeks who are being ‘bailed out’ with these loans – it’s the bankers and risk-managers who decided to lend Greece so much money in the first place.

    It was patently obvious that the Euro was a bad idea at an economic level, as many British politicians pointed out at the time, and were ignored by our continental counterparts. The minor gains from eliminating the risk of currency fluctuation were irrelevant next to the massive risk of lumping 20 disparate economies into one currency zone.

  • Paul Hagan

    There’s quite a difference between being part of the EU and being part of the Eurozone. Greece has been a member of the EU since 1981, every country has had its own journey to the EU (or EEC as it was then) and for Greece it was similar to the other Mediterranean countries emerging from dictatorship to democracy, namely Spain and Portugal. In contrast, they’ve only been a member of the Eurozone since 2001. Greece’s financial crises are hardly a good advert for the Euro as a currency but it’s quite a significant step to say it has should mean Greece should leave the EU, it’s certainly an idea that has little support in Greece. There are a number of countries where they don’t have the Euro yet most seem content to remain in the EU. Certainly the UK didn’t need to be a member of the Eurozone for a small majority to decide they wanted to leave the EU.

  • Kevin Breslin

    What I find utterly bizarre about this thread is that Yanis has been very outspoken in his support for Remaining in the European Union and explaining why he feels strongly about it.

    Why does Jeff Peel feel he needs to interpret Yanis’s opinion for Yanis.

    Maybe Jeff is a Bizarre Champion (well not quite that high up in terms of advocacy) for Leave by not being openly racist, lying or either a ravenous Rexiter or lazy Lexiter?