ADULTS IN THE ROOM: My Battle with Europe’s Deep Establishment by Yanis Varoufakis
A review by Roger Silverman
In the last few years, Greece has witnessed the most dramatic conceivable eruptions of popular outrage; an assertion of human solidarity stretching across the entire mass of the oppressed and deprived. For months on end, tens of thousands occupied Athens’ Syntagma Square and city squares throughout Greece. 35% of the total population physically participated in street demonstrations, and in opinion polls 33% called in so many words for “revolution”. When it came to the famous referendum in July 2015, 61.3% of the population voted to defy the bankers, come what may.
In June 2011, a 5,000-strong posse of police had put a brutal end to the Athens occupation; but, in the words of the author of this book, “the spirit of Syntagma would become an unstoppable political movement”. When the SYRIZA government was elected in January 2015, its support having swelled over the previous six years from 4.6% to 36.3% of the vote, it was that same spirit that had propelled it to power. Its election was the culmination of years of mass struggle not seen in Europe for decades. It could not have asked for a clearer mandate.
Much to his own surprise, it was the economist Yanis Varoufakis who suddenly found himself “thrust into the belly of the beast”, charged with responsibility to confront the bankers as SYRIZA’s finance minister. Adults in the Room, his memoir of six months in the crucible, is a day-by-day account of his persistent and ultimately futile efforts to avoid “a humanitarian bloodbath”.
Sometimes, the more daringly unconventional a politician’s style and persona, the more prudent and circumspect his policies. The leather-jacketed motor-cyclist struck an appealingly nonconformist public posture, but soon Europe’s financial establishment was relieved to find itself facing a reassuringly pragmatic negotiator across the table. Varoufakis started out from the stale and threadbare premise that “the time is not ripe” for socialist demands, and that in the age of neoliberalism, Keynesian reforms constitute the most radical alternative to hand. It was “necessary to rescue European capitalism from itself”. This book gives us a riveting insight into the debacle of his doomed unequal struggle.
THE ROOTS OF THE CRISIS
Varoufakis’ account is vital reading, not only as a unique historical record but also for his devastating exposure of the true nature of Greece’s catastrophe as a direct consequence of the 2008 world financial crisis. The primary explanation was to be found not in any home-grown Greek malpractices but in the colossal exposure of French and German banks to trades in US toxic derivatives. Already in 2006 Varoufakis had predicted the “terminal breakdown” that was threatened by the bursting of the bubble in American real estate and in the derivatives market: “The question is not whether this will happen but how quickly it will result in our next Great Depression.” He explains that “when the crisis hit, the banks of France, Germany, the Netherlands and the UK had exposure in excess of $30 trillion… almost three times the national incomes of Britain, Germany, France and Holland put together”. While acknowledging Greece’s “endemic underdevelopment, mismanagement and corruption”, he demonstrates that it was not the personal debts of the squeezed and starved Greek people but the ledger balances of European bankers and corporate international creditors that were bailed out.
Fraudulently misrepresenting what was actually a massive bailout of these banks as “an act of solidarity with the profligate and lazy Greeks”, the European governments and ECB wriggled their way around the Eurozone’s ban on EU financing of government debt by dishonestly packaging the deal as a series of bilateral loans, as well as by luring into their conspiracy the IMF, in flagrant contravention of its own rules. The austerity inflicted on Greece could then be scripted as a “morality play” comparable to the “bloodletting and self-flagellation” prescribed during the Black Death to legitimise “cynical wealth transfers from the have-nots to the haves”. What was achieved was “a cynical transfer of losses from the books of the Franco-German banks to the shoulders of Europe’s weakest taxpayers”.
The election of SYRIZA was a product of the spontaneous mobilisation of the Greek people over the previous five years, from riots to strikes to demonstrations to occupations to general strikes, eventually converging into a broad spectrum of political protest.
Throughout its history of wars, occupations, coups and revolutions, Greece had never nurtured a stable social-democratic tradition. PASOK had flared into existence in 1974 in a blaze of radical promises in the aftermath of the overthrow of the colonels’ dictatorship, and then just as suddenly burst like a balloon in the wake of the economic crisis.
SYRIZA resembled more closely the ephemeral left-radical parties that sprang up in Europe in the 1930s, such as the ILP, POUM and the SAP: dynamic, fluid, volatile formations, intrinsically unstable, behaving almost like radioactive elements with a limited half-life, fleetingly seeking out a secure foundation and soon either subsiding into reformism, achieving a revolutionary mission, or fizzling out.
Varoufakis was not a member of SYRIZA, but he stood in the 2015 election on the SYRIZA ticket and won 142,000 votes. No candidate of any party received more votes in the whole of Greece. “It was a success,” he commented wryly, “I knew I would eventually be punished for”. Fearful that he might despite himself “turn into a politician”, he kept a signed resignation letter ready in his inside pocket throughout his brief period of office.
The day after his election, Varoufakis arrived at an empty Finance Ministry without even the password to its computer system. Outraged at the “perverse morality” of the bureaucratic mandarins who had been “casually paying tens of millions of euros for a few days’ worth of calamitous advice” from parasitic hired consultants “while dismissing the people who cleaned up after them for no more than 400 euros a month”, his first act was to reinstate those 300 sacked ministry cleaners whose prolonged struggle had been a lasting display of resistance. At his first meeting with treasury officials, he confronted them with “the one and only question that mattered”: how long had they got before the money ran out? The reply? “Things are not too bad, Minister… Anything between eleven days and five weeks.”
In pursuit of his ever elusive goal of a rational, moderate, “Keynesian” way out of the crisis, Varoufakis pressed for a debt restructuring package. He is the first to admit that “there was nothing radical or particularly left-wing” in this call. In fact, he admits to being “continually stunned by the support that I, a proud leftie, have received from a variety of right-wingers: Wall Street and City of London bankers, right-wing German economists, even US libertarians”. Among his closest consorts throughout his stand-off with the troika were former US Treasury Secretary Larry Summers, UN economist Jeff Sachs, the current French president Emmanuel Macron, and – perhaps most startling of all – the former British Chancellor Lord Norman Lamont, a right-wing Tory whom he describes as “a pillar of strength, a safe friend and a constant supporter”.
Varoufakis gives a gripping day-by-day account of his ingenious but futile efforts, against a murky background of intrigue, back-stabbing and sabotage by some of his Cabinet colleagues, to negotiate a deal with creditors who “did not really want their money back” – apparently oblivious to their paramount need to inflict exemplary punishment on a people who had dared to challenge them.
Varoufakis was opposed to voluntary withdrawal from the Eurozone, but as he was duty-bound he had prudently prepared a “plan B”: an alternative transitional arrangement for a return to the drachma in the event of expulsion from the euro. (For even contemplating this back-up reserve plan, he was later threatened with impeachment for treason.)
Taking office on the first day of SYRIZA’s election victory, prime minister Tsipras had admonished Varoufakis: “If the bastards find a way to stop us from delivering what we promised, you and I must be ready to… get out on the streets again to plan the next demonstration.” That is precisely what Varoufakis proposed in June when the bankers tightened the screw on Greece by cutting its emergency cash life support system: that “we let the banks open on Monday morning as usual, so that when the counters ran out of cash the managers would be forced to close down their branches themselves. At that point we should be outside, protesting with the people against the troika.” When it came to the crunch, Varoufakis won the support of not a single SYRIZA minister; Tsipras , Tsakalatos and every one of them endorsed the proposal of Varoufakis’ nemesis Dragasakis, a planted stooge of the bankers, that “we do not antagonise” the troika but “proceed consensually” with it.
Faced with increasingly brazen ultimata from the troika, Tsipras played his desperate referendum gambit, gambling on a defeat or an inconclusive result that might let him off the hook. Varoufakis insisted that it be made clear “that a NO vote would be an instruction to the government… to hold firm in order to broker a new agreement… that freed us from debtors’ prison, recovered our dignity and ended the downward spiral”. He prepared a contingency plan to “haircut” the ECB’s Greek bonds and launch an electronic euro-denominated parallel payments system. This might buy precious time “to return from the brink of Grexit” – but also, if it should prove necessary, to form the foundation for a new currency.
If, on the other hand, YES were to win, Varoufakis announced that he would resign. “As a democrat, I shall respect the people’s choice… but at the same time I have no obligation to sign and implement that agreement myself.” Ominously, not one of his government colleagues, Tsipras and Tsakalotos included, made a similar commitment. This told him “everything I needed to know”.
Then the result came through. The people had spoken – and their voice was deafening. By a margin of almost two to one, the Greek people cried NO!
A SHAMELESS ADMISSION
One of the book’s most poignant scenes is Varoufakis’ description of the scene in the conference room on referendum night, as he waited with other ministers for the result. “When the final number flashed up on the screen, 61.31% for NO in a turnout of 62.5%, I jumped up and punched the air… only to realise that I was the only one in the room celebrating.”
The crucial climax of the book comes with Varoufakis’ revealing account of the extraordinary exchange that followed immediately afterwards between Varoufakis and Tsipras.
“When I entered his office, Alexis stared at me and said we had messed up badly… I decided to put it to him straight: would he honour the NO vote… or was he about to throw in the towel?… At that point Alexis confessed to something I had not anticipated. He told me that he feared a ‘Goudi’ fate awaited us if we persevered – a reference to the execution of six politicians and military leaders in 1922… Alexis then began to insinuate that something like a coup might take place… Again I fended him off: ‘Let them do their worst! Do you realise what 61.3% means?… They didn’t vote NO for you to turn it into a YES.”
Beset by traps and manipulated into fatal concessions which brought it to a straight choice between martyrdom and capitulation, SYRIZA had flirted with the first option only to scuttle into the second. Whatever we may think of Varoufakis’ astonishing naivety in seeking to outwit the bankers in a hollow compromise, in terms of personal honour he emerges from this account head and shoulders above Tsipras. If his account is true, then Tsipras was confessing to a wretched degree of cowardice that could only have aroused contempt from the descendants of those hundreds of thousands of Greeks who had given their lives in the resistance to Nazi occupation and in the civil war which followed. His admission was a desecration of their memories. In 1944, at colossal human cost, the Greek resistance had overthrown the Nazi occupation forces single-handed. In 1974 the colonels’ junta collapsed following a youth uprising.
Varoufakis told his wife later: “Tonight we had the curious phenomenon of a government overthrowing its people.” The next day he was sacked as finance minister at the dictates of the troika, prompting his famous epigram: “I welcome their hatred… I shall wear the creditors’ loathing with pride.”
As Varoufakis commented at the time, this was a coup no less brutal than that of the colonels in 1967. “Why did they force us to close the banks? To instil fear in people. And spreading fear is called terrorism… A new Versailles treaty is haunting Europe… In 1967 it was the tanks that foreign powers used to end Greek democracy… In 2015 another coup was staged by foreign powers using, instead of tanks, Greece’s banks… The Euro summit statement of yesterday morning reads like a document committing to paper Greece’s terms of surrender. It is meant as a statement confirming that Greece acquiesces to becoming a vassal of the Eurogroup.”
No matter how clever the debating points of Greece’s negotiators, once the decision had been taken by SYRIZA to throw away its sole trump card – the unilateral suspension of debt repayments – then all the power rested in the hands of the bankers. They weren’t too concerned about the Greek people’s “fundamental human rights”; they gobbled up “odious debts” every day for breakfast.
Varoufakis’ book demonstrates beyond argument that once it comes to a direct confrontation between the bankers and the people, then no amount of reason, guile or cajolery can prevail. When face to face with a hungry tiger, you have a range of practical choices: throwing it some scraps, killing it, running for your life, etc. Thumbing your nose and sticking your tongue out at it is never a good idea.
We face a common enemy. The Greek people’s misfortune is that they launched their struggle a little ahead of the rest of us and found themselves facing the enemy alone. If proof is needed of their awareness of the power of international solidarity, it is necessary to look no further than the banners the demonstrators had been flying in Syntagma Square. Their defiant anti-capitalist slogans were written not just in Greek but in English, Spanish, French, Italian and German, consciously and explicitly rallying the working people of Europe to join together with them in a continental-wide uprising.
The first skirmish has been lost; the last word is yet to be spoken by all of us.
Roger Silverman is the author of DEFIANCE: Greece and Europe, published by Zero Books.