Submitted by Yanis Varoufakis – The Yanis Varoufakis Blog
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For 161 turbulent days, former Sydneysider Yanis Varoufakis was a central player in a crisis that cast a menacing shadow over the world economy.
In January the economist-turned-politician was made finance minister in Greece’s left-wing government led by the Syriza party. The job came with a tough assignment: to strike a deal with Greece’s hard-nosed creditors amid fears the bankrupt nation would be pushed out of the eurozone and trigger global economic turmoil.
It was a world away from the job Varoufakis had teaching economics at Sydney University between 1988 and 2000. Suddenly an intellectual who puts Newtown and Bondi among his favourite places was centre stage. Varoufakis is a dual Greek-Australian citizen and his 12-year-old daughter lives in Sydney.
It wasn’t just his party’s radical anti-austerity platform that put Varoufakis on a collision course with Europe’s financial powerbrokers. His style and intellectual interests set him apart.
Varoufakis describes himself as an “erratic Marxist” and rode his motorbike to work in Athens even after becoming a minister. For years he has been fiercely critical of Europe’s handling of the region’s debt woes which emerged following the global financial crisis. Weeks before becoming Greece’s finance minister Varoufakis dubbed the bailouts for struggling eurozone countries as “fiscal waterboarding” that threatened to turn Europe into “a form of Victorian workhouse”.
Even Varoufakis’ attire raised eyebrows. When he met British Chancellor George Osbourne in February, an editorial in London’s Telegraph noted Varoufakis was “wearing a leather jacket and an open-necked shirt of a brilliant, unConservative, blue”.
Varoufakis, who is visiting Sydney, said those months at the heart of the crisis were “exhilarating, terrifying, complicated and simple all at once”.
The simple part, he says, was his proposition to Greece’s creditors.
“My task was to go to our creditors and say to them: to get you money back we need to end this degeneration, this constant shrinkage of our national income,” he said. “But we are not going to do this on the basis of more loans … the narrative was very simple. The problem was the other side did not want to listen to reason.”
In early July Varoufakis resigned a few days after comparing Greece’s creditors to terrorists. At the time Greek Prime Minister Alexis Tsipras said Varoufakis “was talking but nobody paid any attention to him”.
Varoufakis has no regrets. “I tend to embrace my choices,” he said.
But how has the experience changed him?
“It made me calmer,” he said. “I’m now more calm than I’ve ever been in my life. Because either you acquire a degree of stoicism when you’re faced with such orchestrated venom or you lose it. You simply recoil into a cocoon and disappear from public view. So I acquired a degree of stoicism that I didn’t think I had a capacity for.”
Varoufakis’ interest in Europe’s currency union goes back to his days as an academic at Sydney University. He strongly opposed Greece joining the euro, which came into full effect in 2002.
“When I was here at Sydney University – from my office 352 in Merewether Building – I was penning feisty and fiery articles in Greek, published in newspapers Athens, against Greece entering the monetary union,” he said.
At that time he taught economic game theory, which explores strategic interactions between individuals. Students taught by Varoufakis remember a striking, charismatic teacher. He later became economist-in-residence at American video gaming company,Valve Corporation, and advised the firm on the “social economies” that developed among online multiplayer games.
Varoufakis said his economic training sometimes came in handy during his foray as a finance minister.
“In my case it was very helpful to be able to see through the claptrap that passed as technocratic advice,” he said.
After leaving Sydney University for a post at the University of Athens Varoufakis became famous in Greece for his strident analysis of the euro crisis.
Varoufakis returned to Sydney University on Thursday to speak about Europe’s economic challenges. He told a packed lecture hall that creating a monetary union is “a bit like invading Russia”.
“At first dramatic progress,” he said. “Just like the French troops under Napoleon … they storm the country and take large tracts of land without much resistance. But then slowly the heavy winter sets in. The Cossacks and the Russian partisans start blowing up your convoys and eventually you end up with blood in the snow.”
But Varoufakis says there is no going back from the euro because the cost would be too great.
What’s needed, he says, is a more democratic Europe – and that’s his next project.
“The reason that Europe is crumbling is because of its democratic deficit. Unless we overcome that deficit Europe is going to shrivel and die. Then the whole world is going to be in turmoil.”
Varoufakis calls his ambitious new political venture “Democratise Europe”.
“Together with a number of colleagues we are trying to create a political movement which will be pan-European, cross border, and which will attempt to address the common problems that we have,” he said.