Yanis Varoufakis's Self-Incriminating Account of the Greek Crisis - Parts 3 and 4

Eric, Toussaint
Date Written:  2018-01-18
Publisher:  Europe Solidaire Sans Frontieres
Year Published:  2018
Resource Type:  Article
Cx Number:  CX22547

Yanis Varoufakis traces his collaboration with Alexis Tsípras and his alter ego, Nikos Pappas, back to 2011. That collaboration gradually broadened, starting with 2013, to include Yanis Dragasakis (who became vice-Prime Minister in 2015). There is a constant in the relations between Varoufakis and Tsípras: Yanis Varoufakis constantly argues for changes in the political programme that Syriza had adopted. Varoufakis tells us that Tsípras-Pappas-Dragasakis themselves clearly wanted to move toward an orientation that was different from, and significantly more moderate than, the one their party had adopted.



Tsipras asked Varoufakis what he thought of the idea of threatening the European policymakers with Greece leaving the Eurozone should they refuse to reconsider the policies of the Memoranda. Varoufakis answered that he would avoid exiting the Eurozone since it was possible to negotiate a favourable solution for Greece, in particular a new restructuring of its debt.

Tsipras replied that famous economists like Paul Krugman were saying that Greece would be better off without the euro.

Varoufakis continues his narrative: I agreed that we would be better off if we had never entered the Eurozone but hastened to add that it was one thing to have stayed out of the euro and quite another to leave it. (…) To try to shake him out of his lazy thinking, I outlined what I expected to happen immediately if Grexit were announced. Unlike Argentina, a country that had severed its currency's ties to the dollar, Greece did not have its own notes and coins in circulation. To convince him, Varoufakis reminds Tsípras that: "(…) creating a currency takes months."

In reality this argument, used many times by Varoufakis and other opponents of an exit from the euro, does not hold up. A new currency could have been adopted by using banknotes denominated in euros, but bearing a stamp. The banks' automatic teller machines could have delivered euro bills that had been especially hallmarked beforehand. James Galbraith explained the idea in a letter to his friend Varoufakis in July 2015.
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