“I’m the finance minister of a bankrupt country”
In an interview with Marcus Gatzke and Mark Schieritz for ZEIT and ZEIT ONLINE Yanis Varoufakis promises a big reform programme.
ZEIT ONLINE: Mr. Varoufakis, in just a few days, you’ve antagonized half of Europe. Was that your plan?
Yanis Varoufakis: I think that’s normal. It will take some time before it’s been understood everywhere that a very fundamental change has taken place in the EU.
ZEIT ONLINE: Which change?
Varoufakis: Europe wasn’t prepared for the crisis in Greece and made decisions that just made everything worse. Now the EU resembles a gambling addict throwing good money after bad. We can’t say: “Stop! Did we do something wrong? Did we perhaps understand this crisis wrong?”
ZEIT ONLINE: Did we? After all, the Greek economy has recently been back on a growth course.
Varoufakis: Perhaps if you look at things in purely statistical terms. But, in reality, incomes and prices are falling. The existing crisis policies have strengthened political forces on the far right all over Europe – in Greece, in France, in Italy. We need a change of course.
ZEIT ONLINE: Many Germans fear this is an excuse to dial back reforms.
Varoufakis: Germans have to understand that it doesn’t mean we’re turning away from the reform path if we give an additional €300 a year to a pensioner living on €300 a month. When we talk about reforms, we should talk about cartels, about rich Greeks who hardly pay any taxes. Why does a kilometer of freeway cost three times as much where we are as it does in Germany?
ZEIT ONLINE: Why?
Varoufakis: Because we’re dealing with a system of cronyism and corruption. That’s what we have to tackle. But, instead, we’re debating pharmacy opening times.
ZEIT ONLINE: Many governments have promised to do something to counter these problems. But little has happened. So why should people trust you?
Varoufakis: You need not trust us. But you should listen to us. Listen to what we have to say, and let us then discuss it with an open mind.
ZEIT ONLINE: You are new to your office, and most cabinet members do not have any experience in government. How do you intend to accomplish everything?
Varoufakis: We may be inexperienced, but we aren’t part of the system. And we will get some expert advice. We’ve approached José Ángel Gurría, the secretary-general of the OECD, the organization of industrialized countries. He is supposed to help us put together a reform programme.
ZEIT ONLINE: Your government has rehired thousands of civil servants. Is that the new Greece?
Varoufakis: We haven’t hired anyone at all yet. We have announced that we want to have a look at a series of public-sector dismissals that were pronounced under questionable circumstances. If we rehire these people, it will be because the justification for their dismissal was unconvincing.
ZEIT ONLINE: The justification was lack of money.
Varoufakis: That doesn’t convince me. For example, our schools were plundered because the security people lost their jobs. Is that a sensible cost-cutting measure? We fire the security staff, and the school’s computers are stolen at night.
ZEIT ONLINE: Can these problems not be solved without bloating the state apparatus?
Varoufakis: We aren’t bloating it. If we notice that we have too many people, we will change course and no longer fill positions when they become empty, for example. When I was still working at the University of Athens, there was a cleaning lady there named Anthoula. We often had to work until midnight. Although her workday had ended much earlier, Anthoula cleaned up after us and unlocked the rooms for us the next morning. Guess who was let go first as part of the austerity program? Anthoula.
ZEIT ONLINE: Can politics let such individual fates determine its direction?
Varoufakis: No. But the example of Anthoula is emblematic of the situation in Greece. The reforms have been inefficient and unfair. That is why I’ve also ordered that the cleaning ladies in my ministry be rehired.
ZEIT ONLINE: In other words, those women who have been protesting their dismissals in Athens for months and have become a symbol of the crisis?
Varoufakis: Exactly. In my ministry, the representatives of the troika…
ZEIT ONLINE: … the EU inspectors…
Varoufakis: … have been devising the so-called reforms. These people haven’t dismissed highly paid consultants, for example, but rather cleaning ladies who cleaned the rooms and toilets at night. Women over 50 who went home with €500 a month. This decision is morally reprehensible. And before you ask about it: We will save money in other places – by not extending the consultants’ contracts.
ZEIT ONLINE: During the campaign, Syriza announced a spending programme worth billions. Can it be implemented without new debts?
Varoufakis: It has to. I can promise you: Excluding interest payments, Greece will never present a budget deficit again. Never, never, never!
ZEIT ONLINE: Why did you have to throw the EU troika out of your country?
Varoufakis: What’s the troika? A group of technocrats who monitor the implementation of the reform programme. We were elected because we no longer accept the logic of their programmes. They have ruined our country. The troika doesn’t have a mandate to negotiate another policy with us. But that does not mean we will no longer work together with our partners.
ZEIT ONLINE: Greece has accepted the conditions of its lenders. The attitude in Berlin is that deals must be kept.
Varoufakis: When I hear something like that, I sometimes think that Europe hasn’t learned anything from history. After World War I, Germany signed the Treaty of Versailles. But this was a bad treaty. Europe could have spared itself a lot of suffering if it had been broken. John Maynard Keynes…
ZEIT ONLINE: … the famous British economist…
Varoufakis: …already warned at that time that driving a country into ruin wasn’t a sustainable strategy. If we believe that the bailout policies have been a mistake, we have to change them.
ZEIT ONLINE: Have they been a mistake?
Varoufakis: A huge mistake. Greece collapsed under its debts. How did we deal with that? We gave even more loans to an over-indebted state. Imagine one of your friends loses his job and can no longer pay his mortgage. Would you give him another loan so he can make payments on his house? That cannot work. I’m the finance minister of a bankrupt country!
ZEIT ONLINE: So, where does that lead us?
Varoufakis: We should approach the problems with the eyes of an insolvency administrator. And what does an insolvency administrator do? He tries to reduce the debts.
ZEIT ONLINE: Germany’s federal government has ruled out a debt haircut.
Varoufakis: I understand there are terms that have been discredited in certain countries. But we can also lower the debt burden without touching the amount of money owed itself. My proposal is to peg the amount of interest payments to economic growth.
ZEIT ONLINE: So, if the Greek economy didn’t grow, creditors would have to waive the interest. You’ve been quoted in German newspapers as having said: “No matter what happens, Germany will still pay.”
Varoufakis: The quotation has been ripped from its context. I did not say that the Germans will pay and that this is a good thing. I said that they have already paid far too much. And that they will pay even more if we do not solve the debt problem. Only then can we refund the money that people have loaned us in the first place.
ZEIT ONLINE: Do you believe you’ve been deliberately misunderstood?
Varoufakis: I hope it’s only a misunderstanding.
ZEIT ONLINE: Immediately after the election, Alexis Tsipras visited a memorial to those who resisted Nazi Germany. That has also been understood as a provocation. Is that a misunderstanding, as well?
Varoufakis: The Golden Dawn party has risen to become the third-strongest force in our parliament. They aren’t neo-Nazis; they are Nazis. We must fight them, always and everywhere. Laying down roses on the monument was a message to the Nazis in my country. It was not a signal directed toward Germany.
ZEIT ONLINE: In your view, has Germany become too powerful in Europe?
Varoufakis: Germany is the most powerful country in Europe. I believe the EU would benefit if Germany conceived of itself as a hegemon. But a hegemon must shoulder responsibility for others. That was the approach of the United States after World War II.
ZEIT ONLINE: What could Germany do?
Varoufakis: I imagine a Merkel Plan based on the model of the Marshall Plan. Germany would use its power to unite Europe. That would be a wonderful legacy for Germany’s federal chancellor.
ZEIT ONLINE: Merkel would say she has a plan.
Varoufakis: What kind of plan is that? A Europe in which we get even more loans that we will never be able to pay back? Back then, the United States forgave the lion’s share of Germany’s debts. From the ongoing EU aid programme, there are now €7 billion lying on the table that I can take just like that. All I have to do is quickly sign a document. But I wouldn’t be able to sleep well if I did because it wouldn’t solve the problem.
ZEIT ONLINE: As a result, you have another problem: Your money could run out in a few weeks.
Varoufakis: That’s why we need a bridging loan. The European Central Bank should support our banks so that we can keep ourselves above water by issuing short-term government bonds.
ZEIT ONLINE: In doing so, the ECB would be acting on the fringes of legality.
Varoufakis: But it wouldn’t be the first time that it took up such a task. And it’s also not about a long-term solution. We will have our plan ready at the beginning of June.
ZEIT ONLINE: Will you ask Russia for help?
Varoufakis: I can give a clear answer to that: That is not up for debate. We will never ask for financial assistance in Moscow.