The European Choice







Yanis Varoufakis on how to build a democratic Europe in a post-Brexit landscape.

Yanis Varoufakis negotiated with the EU elite over the Greek bailout, witnessed firsthand the callous mathematics used to keep the union together. Today — after OXI, after Brexit, and after Trump — he and his comrades in DiEM25 are calling for a New Deal for Europe: a plan that can stabilize the European Union and return democracy to the people.

He sat down with Doug Henwood on Behind the News to discuss this new venture, the international far right, and Europe’s recovery. This transcript has been edited. You can listen to the original interview here, and subscribe to Jacobin Radio to hear Behind the News and other Jacobin-hosted podcasts at iTunes, Stitcher, or Blubrry.

Yanis Varoufakis: How can we possibly expect something different when we’re doing exactly the same thing in Europe?

Doug Henwood: They did promise us things would work out, but they’re not working out.

Yanis Varoufakis: Yes, but those promises were underpinned by a commitment to continue doing exactly the same thing. Whatever it is that they have done, it was always behind the bend, always in response to the continuation of the crisis for which they were responsible, never an attempt to stem it, to get ahead of the curve, and to do something about the causes rather than the symptoms.

Doug Henwood : Are there any signs of recovery?

Yanis Varoufakis: There is a cyclical recovery of sorts. It’s a very tepid one, a very weak one. The business cycle at this very moment should be registering significant recovery, but it is the architectural design codes and the procrastination and the commitment to failed policies which is holding it back. If you look at countries like Spain, for instance, there is modest growth. There is even a little bit of inflation.

Even in Germany, we shifted away from the deflationary mode of last year, but nevertheless, it is all very tentative. It is based in Spain, for instance, on credit expansion in the country that suffered the credit bubble, and therefore is still laboring under the legacy of that bubble’s bursting.

Investment in things that society needs remains ridiculously low. We are wasting the upturn of the business cycle due to the political failure of the eurozone.

Doug Henwood : Is there any bifurcation between the core of the European Union and the periphery, or are they both stuck in the mud?

Yanis Varoufakis: They’re both stuck in the mud in different ways. The manifestation of the crisis in Italy is evident for all to see. We have a completely broken-down banking system, a public debt which is unsustainable, even though the European Central Bank is buying tens of billions of it all the time.

In places like Germany, you have pension funds that have been crushed by the deflationary forces unleashed by the same process. The fact of the matter is that while the monetary authorities, particularly the European Central Bank, have managed to inject sufficient cortisone into the European patient to make it look stable, under the skin, within the foundations of the real economy, Europe is becoming increasingly imbalanced. The centrifugal forces are doing their catastrophic deed.

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