7 6 July 2017
Y
ANIS VAROUFAKIS is (or was) “the
most interesting man in the world”
according to Business Insider; a
“very, very clever person” according
to Martin Wolf of the Financial Times.
After all he landed Danae Stratou, allegedly the
inspiration for Jarvis Cocker’s breathtaking song
Common People, and challenged the deep global
establishment. If he failed in the cut-throat bail-
out drama which he accepts as tragedy, in
Greece, at least he came closer to undermining
global capitalism, a system above all designed
to be unassailable, than anyone else, both politi-
cally and intellectually.
Village readers, above all, will be familiar with
the background: having held only university
posts, mostly in Leftie bastions - Essex, Birming-
ham, East Anglia, Varoufakis was elected to the
Greek parliament (Larry Summers calls this his
big mistake!), collecting the largest number of
votes (more than 142 thousand) of any Greek MP
and became Syriza’s new government’s finance
minister in early 2015 armed with ‘A Modest Pro
-
posal’, a plan to deal with Greece’s debt without
vicious austerity, while staying in the EU. He’d
been working on it for years with Stuart Holland,
a former British Labour Party MP and the Ameri
-
can economist, Jamie, son of JK, Galbraith.
In the end it was supported by numerous econ-
omists including Larry Summers, Thomas Piketty
and Joseph Stiglitz.
Varoufakis considers the Greek state became
insolvent in early 2010 and that the bailouts that
followed were attempts to “extend and pretend”
– to take on the largest loan in history (in order
to keep making repayments on older loans) on
condition of austerity measures that would
shrink the incomes from which the old, un-ser-
viceable loans, and the new bailout debts would
be repaid. Taking on the “bailout” loans in 2010
and 2012 would lead to deeper bankruptcy and
even harder default in the future, and therefore
defies fundamental laws of economics and math
-
ematics. This is still playing out.
Meanwhile, by the end of June 2015 having
been deprived of funds, Greece was no longer
able to make payments on its debts, and came
close to declaring default. As queues formed at
The wrong/right man in the wrong/right place,
probably
Michael Smith reviews ‘Adults in the Room: My Battle With Europe’s
Deep Establishment’, by Yannis Varoufakis
Varoufakup
Deeply personal and
very well written, with an
impressive array of literary
allusions, addressing the
issue of our time head-on,
and spicing the attack with
scathing anecdote
Uncommon people
INTERNATIONAL
July 2017 7 7
ATMs, ‘Marxist’ prime minis-
ter Tsipras called a
referendum on the Troika’s
demand for more austerity in
exchange for additional funds
to bail out Greek banks.
Over 61% of the 62.5% turn-
out recorded their solid NO to
the Troika’s demands. Tsipras
was appalled by the implica-
tions of the vote. That same
night, having panickingly
abandoned his back-up plan,
Tsipras rejected the result,
capitulated to the Troika, and Varoufakis was out, on
his bike. The government had overthrown the people.
Tsipras had been deMarxified and Varoufakis went
back to rhetoric without power.
Paul Tyson says ‘Adults in the Room’ is “a reflection
on the nature and meaning of power in our times”. In
the Theological Review he writes that Varoufakis
“chronicles what happens when an able theologian
of modern political economics points out that our
priests are heretics in the terms of their own doc
-
trines. For if austerity is meant to heal the Greek
economy then 1 + 1 = 17; but if austerity is not about
healing the Greek economy, then what is really going
on in the Eurozone? In response, our priest guild
simply asserts that 1 + 1 obviously = 17, and they see
no reason why they should tell anyone what is really
going on. Who can know divine truth but the priest
guild? Trust and obey, for there is no other way”. Less
benign to Varoufakis, The system-defending Financial
Times says the book is “a lesson in how not to nego-
tiate with Europe’s power brokers”. Elected politicians
have little power; stock markets and a network of
hedge funds, billionaires and media owners have the
real power, and the art of politics is to recognise this
and achieve as much as possible without disrupting
the system. That recognition was the universal norm.
Varoufakis rejected it and, by describing it in frank
detail, is now arming us against the stupidity of the
electorates’ occasional fantasies, not least in an
Ireland enjoying a smooth return to boom-and-bust,
that the system built by Neoliberalism can somehow
bend or compromise to our desire for social justice.
That is what makes this book special, politically beau-
tiful. The honesty of the outsider with the knowledge
of the former quasi-insider.
The insider/outsider question is the key. Varoufakis
opens the book with his arrival as Finance Minister in
Washington for a meeting with Larry Summers, the
former US treasury secretary and conduit to Obama.
Summers asks him: “do you want to be on the inside
or the outside? Outsiders prioritise their freedom to
speak their version of the truth. The price is that they
are ignored by the insiders, who make the important
decisions”. Apparently Larry understood that Yanis
would not sign surrender “at the price of becoming a
bona fide insider…and he believed that this would be
a pity, for me at least”. A lot, maybe the future of
Europe, depends on how you read this conversation,
according to The Theological Review. Some might con-
sider that the pity was much more marked for his
country and that his own was scarcely worth
registering.
It’s all about power and its networks. The 2008
crisis, which continues. “is due to the terminal break-
down of the world’s super black boxes – of the
networks of power”. Believing the solutions to the
crisis will stem from the same networks is “touchingly
naïve”. “The key to such power networks is exclusion
and opacity”, Varoufakis asserts. As sensitive infor
-
mation is bartered, “two-person alliances forge links
with other such alliances … involving conspirators
who conspire de facto without being conscious
conspirators”.
Before he went into government as he notes he
believed we could open the black boxes: “each one of
us may very well be a node in the network…if we can
get inside the network…and disrupt the information
flow, if we can put the fear of uncontrollable informa
-
tion leaking in the he mind of as many of its members
as possible…then the networks will collapse under
their own weight and irrelevance”.
That all seems fine except for Varoufakis it’s yes
-
terday’s idea: “my priority was not to leak information
to outsiders but to do whatever it took to get Greece
out of debtors’ prison. If that meant pretending to be
an insider, so be it…if it became acceptance of
Greece’s permanent incarceration, I would leave”.
However, it is not clear if he really believes in the
Power of One. The obvious danger is that pretending
to be an insider is the same as being one. Even for a
Marxist.
‘Adults in the Room’ addresses the issue of our time
head-on but also spices the attack with gratifyingly
scathing anecdote.
The biggest precise psychological insight is that
Angela Merkel and Nicolas Sarkozy knew that Greece
was bankrupt in 2010 when the EU bailed it out, that
there was a “bankruptcy cover-up”, and that the bail
-
out was designed to save the French and German
banks; and they knew it would be a disaster. “How do
I know that they knew” Because they told me”.
This charge is not new – it was levelled at the
His principal gripe with the deep
establishment - that they were
willing to crush Greece in the
interests of a conservative vision
of the welfare of their own peoples
– is equivalent to his own view
that revolution in Greece should
wait in the interests of the
welfare of its people
Increasing Debt to GDP Ratio of Greece
7 8 July 2017
financial elite at the time by leftwing activists
and rightwing economists. But Varoufakis backs
it – and others -with quotes.
Varoufakis’s academic achievements are in
the application of game theory to economics. So
his strategy was to make the enemy believe
Syriza was prepared to default, or cut loose from
the euro system – so they would roll over loans
that were coming due, and hold off collapse of
the Greek banking system.
This worked, though at the price of a suspi-
cious rhetorical climbdown and retreat on
Syriza’s domestic programme in February 2015.
It failed in July because, after he had won an
emotional referendum campaign, Tsipras chose
compromise over war. Varoufakis needed better
allies but it is not clear if he deserved them. The
circularity does not disguise the truth that no
country is self-determining and no individual can
guarantee to buck the system.
Varoufakis expected to lose the referendum
and that sealed his fate.
Why did Varoufakis’ arguments fail to
convince?
He adduces evidence to show the European
authorities feared that any concessions to the
Radical Left would encourage similar move-
ments, in Spain – Podemos – and in Portugal,
Italy, France and Ireland, leading to a destabili-
sation of the global financial system.
But other forces were also at work.
An extraordinarily sinister event followed a
telephone conversation with US economist Jef-
frey Sachs, in which Varoufakis said the time had
come to default on payments to the IMF. Five
minutes later Sachs rang back after a shocked
and shocking call from the US National Security
Agency, whose informants had been monitoring
the line.
Varoufakis spares nobody. Greece’s creditors
sensed “their power mutate into insufferable
powerlessness [and] felt compelled to do their
worst”. He declares the tale can’t be told without
naming the antiheroes. He finds Tsipras to be an
enigmatic mix: optimistic, frivolous, melan-
cholic, over-keen to prove himself, a vacillator
and lazy thinker. Scorn is splashed at the Bank
of Greece governor, Yanis Stournaras, an old
friend. It is he who caused a bank run; not
Varoufakis’ strategy. He regards most of his
international foes as duplicitous: agreeing with
him in private but unreliable in public. Key exam-
plars are IMF chief Christine Lagarde, ECB
president Mario Draghi and the EU finance min-
isters who might have rallied to Greece in its
hour of desperation: Michel Sapin of France and
Pier Carlo Padoan of Italy. A named exception is
Emmanuel Macron, then economics minister in
Paris, who makes several private attempts to
help Athens but was thwarted. Varoufakis says
Merkel overheard Macron refer to the treatment
of Greece as like Versailles and ordered a com
-
pliant Hollande to keep him out of negotiations.
The European Commission and its president,
Jean-Claude Juncker, are simply weak. Particular
spleen is reserved for a heretofore unknown
Irishman with the unlikely name of Declan Cos-
tello, described to Varoufakis by an unnamed
Irish ambassador as “an un-Irish Irishman”, who
headed the European Commission’s team in
Athens and is derided by Varoufakis as a master
of the “runaround”, infiltrating the Greek admin-
istration and suborning Varoufakis’s own
deputy.
Varoufakis sees Germany as the key player.
Wolfgang Schäuble doesn’t even believe in
democracy and is angling to get the IMF into
France. He was “utterly powerless to do what he
knows is right”: some indictment. The German
finance minister confessed he wouldn’t sign a
third bailout if he was in Varoufakis’s shoes, but
he offered no alternative. Admittedly Varoufakis
doesn’t acknowledge the central truth that
Schäuble favoured “Grexit”. Merkel was the key.
She is a “small c conservative who doesn’t like
structural breaks”. She wouldn’t allow Grexit.
Tsipras didn’t see this, and that was crucial. In
the end her “outstanding work ethic” subdued
him entirely.
Varoufakis both is and is not the best person
to have led all this subversion. He’s so clever he
can never treat anything anyone throws at him
as gospel. He’s so unorthodox he doesn’t even
see himself as an economist: “I am a Professor
of Economics who has never really trained as an
economist. While I may have a PhD in Econom
-
ics, I do not believe I have ever attended more
than a few lectures on economics!”. It is evident
that his EU counterparts despair of him, just as
Tsipras does in due course. He accepts that it
was stupid to do the glamorous Paris Match fea-
ture he and his wife executed at the nadir of
Greece’s depression, as well as turning up to see
George Osborne in a leather jacket. But even
here he’s equivocal: he’d left his suitcase behind
in an Athens taxi. It’s not a big step to note the
equivocation in his acceptance that his revolu
-
tionary insider self could not give voice if it
risked, through instability, the welfare of his
people. Nor to say that, since his principal gripe
with the insiders - with the deep establishment,
was that they were willing to crush Greece in the
interests of a similar conservative vision of the
welfare of their own people and of the global
system, there is an apparent equivalence
between them and him. In the end this imputes
to Varoufakis a moral vacancy and even a stra
-
tegic circularity.
The deep establishment didn’t know what to
do and so they kicked Greece to touch, hoping
– not necessarily inaccurately – that things
would be ok, especially in their own fiefs, in the
end. He did not see this.
The game player got off the accelerating circle
and has become an honorary resident guest at
David McWilliams’ talks and on the BBC’s Ques
-
tion Time: not only the darling of the Corbynite
Left but a mascot for Britain’s Eurosceptic Right,
with the likes of former Chancellor Norman
Lamont, “a pillar of strength” among his early
admirers. Yanis Varoufakis lost his 2015 battle
with the enemy he’s spent a lifetime defining.
Greece isn’t getting the debt relief everyone
knows it needs. But Yanis is doing ok and the
book is excellent.
With ‘Adults in the Room’, according to Paul
Mason in the Guardian, Varoufakis has written
one of the greatest political memoirs of all time.
It stands alongside Alan Clark’s for frankness,
Denis Healey’s for attacks on former allies, and
– as a manual for exploring the perils of state
-
craft – will probably gain the same stature as
Robert Caro’s biography of Lyndon B Johnson.
The Financial Times reviewer said it is a “tremen-
dously indiscreet account by Varoufakis as he
draws upon his own audio recordings and diaries
of top-level meetings. It is deeply personal and
very well written, with an impressive array of lit
-
erary allusions”.
Varoufakis is doing better than his country.
And being the most interesting man in the world
while he does so. He’s working to build DiEM 25,
a pan-European, cross-border movement of
democrats. His aim is to repair the European
Union. Would you trust him? Read the book.
Varoufakis the game-
player is an equivocator,
morally vacant and
strategically circular
Greece GDP
INTERNATIONAL
July 2017 7 9
Johnny Ronan, boisterous man about town,
whose company Treasury Holdings went
bankrupt in 2012 owing €2.7bn, €1.7bn to
Nama alone, suggesting it cost the country
at least €500m. Johnny Ronan may have
bought out his personal loans but Treasury
benefited from the socialised capitalism
for market losers that is the bankruptcy
regime.
Now his plans for Dublin’s tallest building,
a 22-storey €130 million 88m tower with
offices and a 110-bedroom hotel beside
Tara Street station, the most significant –
and worst – scheme ever proposed in the
history of Dublin City, have been rejected
by Dublin City Council.
The building could have been seen
incongruously from Grafton St – and
Henrietta St.
Dublin City Council said the proposal
would have a “significant and detrimental
visual impact” as far away as Harcourt
Street to the south, Lord Edward Street
in Christchurch to the west and the Five
Lamps to the North.
July/August 2017
Johnny Ronan

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