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Interview with Greek Finance Minister Varoufakis "We will smash them"

In an interview with stern-magazine Greek Finance Minister Yanis Varoufakis talks about his life as a rebel politician and how to fight the oligarchs in his country.

Mr Varoufakis, does this hectic shuttle diplomacy leave you any time to reflect on your work?
I wish I had more time. We're an inexperienced government, and we haven't been given the time to familiarize ourselves with the work of our ministries. Strictly speaking, we need a few weeks to deliberate and draw up our programme, but we're looking down the barrel of a gun. Rushing from one meeting to the next, after sleepless nights, is testament to how severely this crisis has undermined the integrity, even the soul of Europe.

Do politics function much in the way you expected?
Unfortunately in the case of Europe, yes, they do. I never had any heightened expectations of the political process. I threw my hat into the ring because I'm appalled by the current state of European democracy. If there is one deficit in this Europe of ours it is a lack of democracy. We are turning the institutions that make decisions affecting people's lives into democracy-free zones. And this benefits the dark forces that seek to undermine democracy and human rights.

The new stern-issue

As Finance Minister, one single word from you is enough to move the markets. What does that feel like?
It's a power I don't want to have. Power is something I don't want to have, generally speaking. That might sound hypocritical, but I mean it in all sincerity. And the same can be said of many of our cabinet members. They preferred life in the opposition, after all it's quite comfortable being a left-wing minority (laughs).

So why did you take on this job?
For five years I've been criticizing the powers that be who say there is no alternative to our chosen course. And then one day a young man named Alexis Tsipras asks me: 'If we come to power, do you want to try and implement your plans?' In moments like these you have to put your money where your mouth is. It's not a question of whether you want to or not but more like Immanuel Kant's categorical imperative. You do it because you must.

You're an academic and a teacher. What makes you think that you're up to the job of a politician?
Absolutely nothing. I have no idea of whether I can actually do this job. I’m trying to do my best, but I won't necessarily say that I'll succeed. That would make me an idiot or a liar, and I'm neither. All I can do is work from day to day, and then we'll see.

You appear to change your opinions quite frequently: at times you seek aid from Russia, and at other times you rule it out …
That's not so. I've always been very clear in my views.

At times you want a debt haircut, and at other times you don't.
No, no. For years I've been saying the same thing: a non-substainable debt cannot be paid back, it leads automatically to a haircut. There are all manner of terms to describe it, and the German and Greek languages are very rich languages in this respect. The bottom line, however, is that the Greek debt cannot be repaid anytime soon. In 2010, we had another term for the debt cut. At the time, Greece had gone into bankruptcy, but the Europeans pretented it wasn't happening. The Greek taxpayers shouldered the burden of the banks' losses as a result of the debt haircut, after which the burden was shifted to Brussels, Berlin and Frankfurt. That was cynical. What the Europeans lent us, wasn't done out of solidarity. The money went to the banks. But we want to change that now. We want to minimize the costs for the taxpayers, both in Greece and in Europe.

What do you expect from Angela Merkel and Wolfgang Schäuble?
Angela Merkel is by far the most astute politician in Europe. There is no doubt about it. And Wolfgang Schäuble, her Finance Minister, is perhaps the only European politician with intellectual substance. He's a genuine committed European and a deep down federalist.

You once accused Angela Merkel of "magical thinking".
When was that?

Two years ago.
Two years is a long time in European politics. But I think the key issue is how we extricate ourselves from this crisis. At the time, the US-administration under Barack Obama pursued an expansionary fiscal policy, and the Federal Reserve attempted an expansionary monetary policy. In Britain they tried a bit fiscal contraction - and expansion in the monetary field. In Europa we have been trying contraction and contraction. But that has never worked, and it's never been substantiated by history or by economic theory. And believing in that is magical thinking.

So all will be well if we just put an end to austerity. If it's so simple, why has no one else in Europe come up with this solution?
We face a political problem. We need more deliberation and coordination. Many politicians in Europe are too scared to step out of the herd.

Countries pursue their own interests.
And achieve the exact opposite. They might create a balance of interests but ultimately it's a terrible equilibrium that can lead to a great depression, as we saw in the 1930s. Or even to a period of deflation as we are currently experiencing in Europe. We have a heavy burden of debt in Europe, yet there are billions of euros sitting idle in the financial sector in Frankfurt. Everyone is thinking: let the others invest, and so ultimately no one invests. The situation can only be overcome if we enforce a New Deal like the United States did in the 1930s: the government mobilized idle savings and invested them. Once people saw houses and highways being built, and workers had money to spend, they also began investing.

So Germans should do more to benefit Europe and less to promote their own interests.
I think the Germans are very good Europeans, even more so than the French or Greeks. Many Germans look to Europe as a means of escaping the nation state. It's one of the consequences of the Second World War. But I think fingerpointing is a very stupid exercise. Instead we should get beyond thinking in national terms. We should be thinking as Europeans.

You yourself were affected by the crisis and left Greece two years ago to teach at the University of Texas.
I couldn't continue my work at the university as the faculty's funding had been slashed. When I was appointed Finance Minister, several people said: consider yourself lucky. If this doesn't work out you can always jump on a plane and fly back to Texas. But that's not what I want. I resigned my post in Austin, and while we speak my wife is busy packing up all our belongings in the flat.

It is said that you once received death threats.
That was in 2011.

At the time I was helping some journalists with their investigations into various banking scandals. One night, I received a phone call and a stranger asked me whether my son had already come home. The caller then described the route my son had taken and said: if you want him to come home safely in the future, then stop investigating the banking business. That was another reason why we moved to Texas.

Who was behind these threats?
I have no idea. I was never scared for myself, but if your son is targeted then you have a moral obligation to respond.

The banks in Greece are part of a super-rich elite that has benefitted from the crisis.
Yes, but we will smash them.

I don't know yet, but we will stop them. We'll need help from the Germans. We're the first Greek government to really be willing to smash the cartels in our country.

But Greece hasn't even managed to set up a working tax administration yet.
The previous government only pretended to be interested in reforms. Just look at the tax laws. People were being taxed who had tax immunity. It’s like asking turkeys if they want to be slaughtered for Christmas.

How do you plan to change that?
We now have a very good database and know exactly how much capital is being transferred from Greece and deposited in accounts in Europe or other parts of the world. At least that is what the people in my department tell me. I'd know the exact figures if I weren't forced to spend my time travelling around Europe begging for more breathing space. We have cases where someone transferred 1.5 billion euros to foreign accounts last year but for the last 20 years has only declared annual taxes on 5000 euros. How can that be? These lists existed but they were never utilised.

You're referring to data from the list that Christine Lagarde, the Managing Director of the International Monetary Fund, sent to Athens?
The Lagarde list only involved one bank. We have a list of all banks and all transfers. But the people in my department tell me they were effectively prevented from pursuing these cases by the higher authorities.

You come across as the opposite of the archetypal politician. You fly economy class and ride a motorbike. Does this symbolism not detract from the actual problems?
It has nothing to do with symbolism. A few days ago, while in Rome, we were accompanied by a police escort. This makes me sick, we weren't even late! We still had an hour to go before meeting the Italian Finance Minister. The idea that we are special and that somebody has to interrupt the traffic for us, that makes me unhappy. I want to carry on living my own life. I want to ride my motorbike and walk home if I like. Do I have to be unhappy because I'm a minister? Some people ask me why I dress like that? I've always dressed this way! Why should I change?

During your first days as Finance Minister, we nearly always saw you in your leather jacket. But not anymore. Why?
If we were in Greece, I'd still be wearing it. I've never worn a tie in my life. Not even when I was invited to give a speech in the House of Lords. Should I start wearing a tie just because I'm a government minister? If you put someone in a Roman uniform, they'll feel uncomfortable and start thinking differently. I don't want to feel uncomfortable, and I certainly don't want to start thinking differently.

A while ago, you mentioned on your blog that you don't want to turn into a politician. Why?
I value debates and Socratic dialectics. The whole point of a discussion is to learn from one another. But just look at politicians debating in parliament or on television – it's all about annihilating and destroying their opponents. If that happens to me then somebody should shoot me.

Interview: Marc Goergen and Andreas Hoffmann print

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