FacebookTwitterRedditEmail

The Man Who Refused to Play by the Rules: the Real Sins of Varoufakis

Why have negotiations between Greece and creditors collapsed, to a point of virtual no return, when both sides have repeatedly said they want the same thing: for Greece to stay in the euro?

The conventional wisdom is that the policy gap between the two sides was simply too great. Elected in January, the Syriza-led government sought to reverse years of austerity under the slogan of no more bailouts. Its flamboyant finance minister, Yannis Varoufakis (who has since stood down), spoke of an economic transformation in Greece, taking on the long-standing power of the country’s oligarchs. His renegotiation with the Troika was part of this broader agenda.

Facing Greece was a German-led bloc committed to more austerity and structural reforms.  Within this bloc were countries — Ireland, Portugal — that had turned to the EU for their own bailouts and had undertaken the cuts and reforms asked of them. They were implacable in their belief that Greece should do the same.

But this view cannot explain why both sides came as close as they did. The often-forgotten truth of the last few weeks is that Greece and the Troika very nearly secured a deal. From the outset, the policy differences between them have been minor, largely because of Syriza’s moderate demands.

In early 2015, there was a lot of sympathy — including from the IMF — for Greek debt relief. When Varoufakis argued that a crisis of insolvency should not be confused with a liquidity crisis, he was listened to. Even in the very final stages of the negotiations, the remaining differences were small in what was multi-billion euro loan agreement. In the recent referendum, heavyweight economic commentators like Joseph Stiglitz and Paul Krugman argued for a ‘no’, saying the intellectual case for a revised bailout agreement and debt relief was solid.

The negotiations didn’t break down because of an unbridgeable gap between the North and South; creditors and debtors; the German ‘Ordoliberalism’ of Schäuble and Djisselbloem and Greek-style Marxism of Varoufakis and Tsipras. This gap has never existed. They broke down because Varoufakis repeatedly breached the Eurogroup’s etiquette. In doing so, he challenged the very foundations of the eurozone’s mode of governance.

The Eurogroup is not a democratic institution. Though it is made up of finance ministers from democratically elected governments, these ministers meet as individuals who are there on the assumption that they will build consensus, make compromises, and reach agreements amongst themselves.

The etiquette of the Eurogroup is that one leaves one’s national interests at the door. Relations are more personal than political. Ideologies and grand statements of political doctrine have no place in the body’s deliberations. If a minister is constrained because of a difficult situation at home, this is treated as an understandable — if unfortunate — problem that needs to be solved. Ministers find in the Eurogroup a source of energy and support for taking on their own domestic populations. It is also a private club of sorts, where what goes on inside remains secret. Ministers attending the Eurogroup are transformed from politicians representing interests into experts seeking solutions to common problems.

The hostility towards Varoufakis stems from his breaking of all of these rules. He refused to play the Eurogroup game. It’s not really about riding a motorbike, wearing combat trousers and being a celebrity academic-blogger — though his charisma and popularity probably created jealousies amongst the other (colourless and tie-wearing) politicians.

At the heart of the matter is how Varoufakis presented his demands. Thinking of himself as a representative of the Greek people, he made his wishes public, and when in the Eurogroup, he maintained the same stance — changes in views could not be informally agreed around a table but had to be taken back to Athens and argued for, in cabinet and with the Syriza party.

It was this breach of etiquette that made agreement impossible. Creative solutions can usually be found in the EU. It is, after all, a machine built on compromise. But when someone violates the very rules of the game, nothing can be done. Varoufakis exposed the Eurogroup as a private club where relations between individuals matter more than relations between the populations that are formerly being represented around the table. For that, he — and Greece — must now be punished.

This article appears in the excellent Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features two or three articles from LMD every month.

More articles by:

Chris Bickerton is a lecturer in politics at the University of Cambridge. He blogs at The Current Moment.

bernie-the-sandernistas-cover-344x550

Weekend Edition
April 19, 2019
Friday - Sunday
Andrew Levine
What Will It Take For Trump to Get His Due?
Roy Eidelson
Is the American Psychological Association Addicted to Militarism and War?
Jeffrey St. Clair
Roaming Charges: Time is Blind, Man is Stupid
Joshua Frank
Top 20 Mueller Report “Findings”
Rob Urie
Why Russiagate Will Never Go Away
Paul Street
Stephen Moore Gets Something Right: It’s Capitalism vs. Democracy
Russell Mokhiber
Why Boeing and Its Executives Should be Prosecuted for Manslaughter
T.J. Coles
The Battle for Latin America: How the U.S. Helped Destroy the “Pink Tide”
Ron Jacobs
Ho Chi Minh City: Nguyen Thai Binh Street
Dean Baker
Fun Fictions in Economics
David Rosen
Trump’s One-Dimensional Gender Identity
Kenn Orphan
Notre Dame: We Have Always Belonged to Her
Robert Hunziker
The Blue Ocean Event and Collapsing Ecosystems
Theodore C. Van Alst, Jr.
Paddy Wagon
Brett Wilkins
Jimmy Carter: US ‘Most Warlike Nation in History of the World’
John W. Whitehead
From Jesus Christ to Julian Assange: When Dissidents Become Enemies of the State
Nick Pemberton
To Never Forget or Never Remember
Stephen Cooper
My Unforgettable College Stabbings
Louis Proyect
A Leftist Rejoinder to the “Capitalist Miracle”
Louisa Willcox
Aldo Leopold’s Land Ethic and the Need for a New Approach to Managing Wildlife
Brian Cloughley
Britain Shakes a Futile Fist and Germany Behaves Sensibly
Jessicah Pierre
A Revolutionary Idea to Close the Racial Wealth Divide
George Burchett
Revolutionary Journalism
Dan Bacher
U.S. Senate Confirms Oil Lobbyist David Bernhardt as Interior Secretary
Nicky Reid
The Strange Success of Russiagate
Chris Gilbert
Defending Venezuela: Two Approaches
Todd Larsen
The Planetary Cost of Amazon’s Convenience
Kelly Martin
How the White House is Spinning Earth Day
Nino Pagliccia
Cuba and Venezuela: Killing Two Birds With a Stone
Matthew Stevenson
Pacific Odyssey: Guadalcanal and Bloody Ridge, Solomon Islands
David Kattenburg
Trudeau’s Long Winter
Gary Olson
A Few Comments on the recent PBS Series: Reconstruction: America After the Civil War
Ellen Lindeen
What Does it Mean to Teach Peace?
Adewale Maye and Eileen Appelbaum
Paid Family and Medical Leave: a Bargain Even Low-Wage Workers Can Afford
Ramzy Baroud
War Versus Peace: Israel Has Decided and So Should We
Ann Garrison
Vets for Peace to Barbara Lee: Support Manning and Assange
Thomas Knapp
The Mueller Report Changed my Mind on Term Limits
Jill Richardson
Why is Going Green So Hard? Because the System Isn’t
Mallika Khanna
The Greenwashing of Earth Day
Arshad Khan
Do the Harmless Pangolins Have to Become Extinct?
Paul Armentano
Pushing Marijuana Legalization Across the Finish Line
B. R. Gowani
Surreal Realities: Pelosi, Maneka Gandhi, Pompeo, Trump
Paul Buhle
Using the Law to Build a Socialist Society
David Yearsley
Call Saul
Elliot Sperber
Ecology Over Economy 
FacebookTwitterRedditEmail