Varoufakis’ Keynote on the Future of Greece Last Night in Berlin

By Lambert Strether of Corrente.

Alert reader CS sends in the following video, explaining:

[Yanis] Varoufakis was part of a panel discussion on the future of Greece within
the EU last night, organised by the IMK [link].

Keynote begins at 12:30, followed by a prolonged Q&A session.

An aspiration too far? Enjoy!

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Swedish Lex

    Watched it live
    Note how Greece over 4 months has managed to move goalposts of global debate more than anyone expected. Syriza prior branded as band of loons. Now claims intellectual highground & makes G7 look like Bagdad Charlie. Kn my view

  2. BillC

    I watched the whole thing attentively and it leaves me very puzzled.

    YV speaks as well as he writes. He has the gift of clearly and succinctly giving a good high-level view of the problem and why the dictated solutions cannot possibly work, with good historical support. He is careful to note and understand others’ questions and comments and responds directly and unevasively. He very also politely reminds his German audience that Germany became what it is today because in 1946 the US convinced its allies, who until then planned to confine Germany to life as a purely agricultural nation, to forgive its debts and instead make a massive investment in rebuilding its industrial base and infrastructure, and as importantly, giving a defeated nation a “speech of hope” that rekindled their shattered spirits — even though the disastrous situation in which Germany found itself was its own fault. He suggested that Greece is in the same situation and deserves the same tretdment.

    The audience was overwhelmingly friendly, but there were several critical questions that YV handled well. Maybe most importantly, at the very end, he very graciously and constructively responded to Hr. Welch(?), a CSU(?) Bundestag member who clearly and forcefully asked, “Why should my voters pay for your debts? And why do you think shuffling the debt around to other alphabet-soup European public entities will help the situation?”

    So here’s my puzzlement: with a nearly 7×24 worldwide media spotlight on this issue since SYRIZA took office, why have they not been presenting this same show-and-tell non-stop to the European public instead of just talking in backrooms, stonewalling Brussels bureaucrats who have neither the imagination nor the power to alter the Rules of Austerity? Sure, there’s been lots of PR by leak, but that’s more “inside baseball” stuff, not easily-digested big picture descriptions of How We Got Into This Mess and What it Takes to Get Out.

    Wish I’d been there to partake of the finger food downstairs afterwards. I imagine YV and Hr. Welch had an interesting and perhaps even useful discussion over sekt and sandwiches that would have been very interesting to overhear.

      1. BillC

        Hr. Welch’s question begins about 2:07:30 — in German, but even if it’s Greek to you, it’s worth seeing for his vehemence and his handling of some heckling from the audience. 2nd, a much frendlier and less interesting comment from a CDU Bundstag member follows immediatly. YV’s responses to both, Hr. Welch first, begin about 2:13:30.

        Summarizing broadly, YV’s answer to Hr. Welch is:

        Just like you, Hr. Welch, in 2010 I and many of my colleagues now in government were in the streets of Athens protesting the proposed Eurogroup bail-out. We knew it was a fraud on us and you to pretend that an insolvent state could manage that debt by rolling it over. We wanted to work it out with the Banks, not involve the other EU states. But now we’re in government and we have to deal with this problem, even if we didn’t create it. We want to pay you back, every penny. But we can’t do it if our economy is in a shambles. We need your help to heal the economy. We propose linking repayment terms to GDP growth so that both parties have a vested interest in fostering our growth.

        As for taking the debt I must (but cannot) repay to the IMF this month and transferring it to other EU institutions — what would you have me do? Come back to you for a new loan? It’s not a trick to transfer debt among instiutions. We do not want default, but we must have some breathing room to revive the economy.

        More technical details follow regarding a state return to normal open-market borrowing once the immediate threat of default is eliminated.

        As Yves continues to point out, YV is clearly clearly agreeing to continued austerity by promising perpetual primary surpluses, though smaller than the institutions now demand. Seems to me he’s being extremely optimistic to think that there won’t have to be haircuts, but maybe they just figure they’ll cross that bridge after current hostilities dissipate.

        Or (putting on my optimism hat for no good reason), if they manage to chink the austerity brigade’s armor, maybe a strong EU-wide recovery will follow and float everyone’s boat. Yeah, I believed in the tooth fairy, Barak Obama, and Matteo Renzi, too.

        1. Mattski

          As if Germany had paid back every penny. We bought them away from socialism, even forced through land reform in Japan to prevent socialism gaining a toehold there. They don’t believe in killing Jews any more, but they still believe that they earned all they have through hard work, and that southern Europe is lazy.

          1. Pancho

            Speaking from Germany myself, unfortunately I can only agree that the majority of Germans fiercely believe their national wealth and relatively high productivity simply results from their hard work and obeying strict rules, thereby differentiating them from all those “lazy Southerners”.
            Their Prussian-style obsession with rules is highly selective though: in the Eurozone, German governments have bent (or outright broken) about every rule they didn’t like to be applied on themselves.

            To bad for you, the ones disagreeing with this chauvinist narrative mostly are the ~5-10% Socialists in Germany. ;) But then again, today’s Socialism is about full democratic control and participation rather than about reinstating a Soviet-style authoritarian regime.

    1. MyLessThanPrimeBeef

      It’s not true Schaeuble responded that the same treatment would mean a tripartite Greece with an Athens Wall, with monitors from each of the three institution-powers monitoring each other for the next 50 years.

      Here is your ECB zone.

      And your IMF zone.

      And the EC zone.

  3. Jim

    This extremely articulate speech by Varoufakis is another empirical dot documenting the fact that he is quite interested in maintaining his “left” position within the broad managerial political/economic/cultural class of Europe.

    All power to the bureaucratic public/private network of administration.

    No wander the left has collapsed. It is now simply a part of the administration of the status quo.

  4. juliania

    Thank you for posting this excellent video. Perhaps at some point there can be a transcript link (translated) as two years of German way back in college days weren’t sufficient for me to follow the Q&A. I think the entire presentation is worthy of that.

    The mention of a new set of rules precipitated by an important speech written by the father of Varoufakis’ mentor was a stirring proposal. Also stirring was Varoufakis’ insistence that the Greek people would support him through the hard times of even a partial softening of the troika’s stance. He laid out the frailty of the EU itself, and proposed that dealing fairly with Greece in this instance would strengthen rather than destroy that union.

    In its way, the speech resembled the Gettysburg address. Why is not it just as important to preserve that Union as it was for the United States of America? The irony is that Germany herself would not exist had not one Galbraith called for a merciful approach. We could well have had Ukraine before Ukraine, in spades.

    On another blog the question was raised, ‘Who does Putin have to talk to in the West?’ I think he has Varoufakis at least. And maybe a lot of the Greek people as well. Beautiful speech!

    Our own politicians have forgotten how to make beautiful speeches, if they ever knew.

    1. norm de plume

      ‘Our own politicians have forgotten how to make beautiful speeches, if they ever knew’

      It is partly down to the subject matter. Some of the nobility of YV’s statements derive from the nobility of their substance, at least as much as their style IMHO. If he was selling the poisonous moonshine Obama is peddling (or even those great orators Blair and Clinton before him) he too might sound a bit shopworn, even with a whole legion of Peggy Noonans to buff the cadences.

      You can polish a turd but in the end it is still a turd, and eventually it smells.

    1. norm de plume

      I just commented somewhere else that austerity is a twofer: ‘a raid on the common wealth that happily doubles as a mechanism via which to win hearts and minds for the sale of public assets’

      Meaning that the inevitable crisis brought about by starvation funding allows full throated and seemingly plausible roars for privatisation – market discipline, streamlining, expertise, cost reduction etc etc. Of course the cost goes up and the service is still crap, very often worse, but by then the ship has sailed.

      But I wonder if ‘twofer’ is selling austerity short… it is also a whizz at silencing dissent from pesky quarters like labour and academe and the precariat generally, and is just the thing for helping to emphasise, to make palpable that gap between us and (shiver).. them.

      I love thee austerity, let me count the ways…

      1. Skippy

        Yet one wonders if they ever played old school Warcraft, when the mines are tapped out, there is only one alternative…

        I think Keynes intrinsically understood this, attempted rewrite the code, tho the antiquarian cult [Foucault] bastardized it as were their want, in a compromise [biding time], till such a time as the narrative could be tweaked [libertarianism].

        Skippy…. BTW nice tunes… if I might share…. Minutemen – This Ain’t No Picnic –

  5. Chauncey Gardiner

    Also want to join others here in thanking you for posting the video of Yanis Varoufakis’ presentation in Berlin. His discussion of asymmetrical capital flows stemming from the German-Periphery nations’ trade imbalances, the related growth of unsustainable private debts, and the resultant bailouts of the private banks’ bad loans by the European public, is similar in effect to the bailout of private banks and other financial intermediaries in the U.S. following the 2008 financial collapse, although U.S. banks’ losses were attributable to different root causes than excessive liquidity from the recycling of trade imbalances.

    His point that for every irresponsible borrower there corresponds an irresponsible lender is spot on. Like the American people, the Irish people and others in Europe, the Greek people have taken a huge economic and social hit so that the banks would be saved.

    His related discussion of Aesop’s fable of the ants and the grasshoppers to expand upon this truth was a useful explanatory device in addressing the issue of irresponsible borrowers and lenders, their debt-fueled economic excesses, and the grasshoppers’ subsequent capital flight to perceived “safe havens”,

    I have difficulty reconciling his acknowledgement that the brutal austerity measures that have been imposed and that have cut Greece’s capacity to repay its debts with Syriza’s evident willingness to implement further deep austerity policies. But perhaps Greece’s political choices have been so curtailed that he and Tsipras have decided to instead publicly transfer the ethical burden onto Merkel and other German policy makers.

    Appreciated Varoufakis’ comments regarding the shared problem of corruption of our government officials. Impressed by willingness to bring in German auditors as part of tax reform, but distressed by the further privatization of public assets (although impressed by the effort to make lemonade out of lemons thru retention of minority ownership for state investment seed money).

    I appreciated Varoufakis’ adoption of Joseph Stiglitz’ view that Greece’s debt payments should be linked to Greece’s GDP growth. That would appear to me to align common interests.

    But maybe that is no longer what this is really all about given his opening remark that the winners in all this have been the enemies of democracy and of Europe. Tell us more, Yanis. Seems to be a common theme now with “fast track” of the secret TPP, TTIP, TISA agreements, etc.

      1. financial matters

        Thanks. This article by a member of the central committee of Syriza shows the depth of their leadership and the type of thinking that is rare in governing parties today.

        “This is the reason why, in a situation of such an intensification of social antagonisms like today, a government that wants to side with labor and the social majority cannot even imagine succumbing to pressures to continue implementing austerity policies.”

        “This conservative perspective recognizes as a “moral hazard” any policy that supports the interests of the working class, expands the public space, supports the welfare state, and organizes the reproduction of society beyond and outside the scope of markets.”


        Michael Hudson has been an early proponent of these views and how foreign loans have been exploitative rather than helping to build other countries. The loans were often used as leverage to pick up assets on the cheap.

        Naomi Klein pointedly picks up on this in Shock Doctrine showing how economic crises such as this can be exploited.

        With what we’ve seen as far as the state bailing out and supporting corporate interests I think Mariana Mazzucato also brings some important points to the table in ‘The Entrepreneurial State: Debunking Public vs Private Sector Myths’.

  6. akaPaul LaFargue

    Just to be clear about this: Germany was saved from a plight worse than Wisconsin not from an ethical insight but from a RealPolitik one – Russia. Unfortunately, the banks, today, seemed to have insulated themselves from the cold logic of a similar rationale vis-a-vis Greece. Greece is a single domino on the table (they think).

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