Mr. Varoufakis, for us you are something like the rock star or punk of the economics scene. Do you look like that too?
Janis Varoufakis: In the many years that I have taught economics, I have strived to convince my students that economics is a fascinating battle of ideas, a battle whose outcome determines the life of each individual. And make this exciting in a way that is logically coherent and scientifically honest.
Then, when I entered politics, I tried to do something similar: convince the public that big economic decisions are not beyond their understanding and certainly not the kind of decisions they should leave in the hands of motivated politicians and economists.
Through this prism, the description of my lifestyle, for example as a “rock star”, corresponds to the interests of powerful opinion makers who do not want the public to feel that they have the right and ability to question the authority and promote democracy.
“Milei wants to cut social programs with a chainsaw”
This image of the rock star is shared by people like Argentine President Javier Milei. What do you think about him?
Your question is a reflection of the sad state of our current politics. Above all, he reveals the inability to concentrate on what is important and not be distracted by external appearances. Milei represents a clear and present danger to a civilized social economy, like his idea of chainsawing all the social programs on which the poorest depend.
It is a threat to economic rationality, for example with its crazy idea of dollarizing Argentina. He questions the values of the Enlightenment, for example when he wants to sell babies and human organs. It reduces humanity's chances of stopping climate catastrophe by radically denying the climate emergency.
On the contrary, I am against all your crazy and anti-human economic analyzes and political proposals. But the media's obsession with appearances and its willingness to ignore the substance leads to questions like the one you just asked me.
You are a declared left-wing politician and economist. How do you respond to rights?
With respect. To achieve a humanist goal, from introducing a basic income to preventing a climate catastrophe, we need a democratic debate that creates a sufficiently broad consensus. And to achieve this, our debates must be civil, based on mutual respect and not aimed at insulting each other, but at evaluating each other's ideas critically and fairly.
Ultimately, unlike those on the right who demonize me so they don't have to deal with my ideas, I treat them with respect and try to see if there is anything worthwhile in their ideas.
Proud to retire
You resigned very soon from your position as Minister of Finance in Greece. Have you ever regretted that?
Why should I regret doing the right thing? The reason for my resignation was that I was pressured to accept another huge loan from European taxpayers to which no one was entitled, for two reasons: firstly, it will never be repaid. Second, it was a loan offered under crazy terms: like a 24 percent VAT rate or forcing small businesses to prepay next year's “estimated” taxes this year.
The alternative to resignation was to lie to my constituents and the citizens of Europe about these two facts in order to accept a loan that would condemn Greece to perpetual underdevelopment and our creditors to never get their money back. If anything, I'm very proud that I said “no” and quit. Wouldn't you be too?
From the German perspective, Greece's development is now a success story. The British economist recently named Greece the best country in the world. Can you understand such evaluations?
Let me question the first four words of your question: There is no “German perspective.” There are many German perspectives, just as there are many Greek, British, French, Indian and other perspectives. Certainly, if you are a Frankfurt financier whose Delaware-registered hedge fund bought distressed Greek bank loans, today's Greece is not just a “success story” from your perspective: it is the goose that laid the golden eggs. For example, the fund pays 5,000 euros for a “red” – that is, a non-performing mortgage loan of, say, 100,000 euros – attached to the house of a Greek family (now worth 80,000 euros) who cannot pay the loan.
The fund then forces the Greek family to evict it and sells the house for, say, 60,000 euros, at a profit rate of 1,100 percent. So yes, I understand that from the German perspective Greece is now a “success story”.
But that cannot be the perspective of sensible Germans who can see the current destruction and looting of the Greek social economy in the interests of financiers, who also damaged Germany before and after 2008, as a good thing for Germany.
“An endless bankruptcy”
What contribution could you make to this success story?
Your question is similar to the question about what contribution I have made to the climate catastrophe, from which the same financiers benefit every day: I hope none at all!
What is going better today in your country than ten years ago?
A significant reduction in bureaucracy through the digitalization of government processes and services.
And what is still not going well?
The endless bankruptcy of our state and 80 percent of our families and single people.
How important is the fight against climate change to you?
As important as the air I breathe and the water I drink.
Serious accusation against Habeck
We Germans subordinate almost everything to him. What do you think of this German attitude?
I wish it was like that! Of course, in Germany there is a lot of debate about climate change and the need to do something about it. But, above all, there is only talk and no action. To say that Germany subordinates everything to the prevention of climate change, at least 5 percent of national income would have to be spent on this every year.
When I look at the actual figures – and not the figures desired by Mr Habeck – I see that less than 1 percent is spent on the green transition. But how could it be otherwise if the federal government is subject to a constitutional debt brake and at the same time there is no European treasury that can use public financial instruments to invest in the green transition across Europe?
Germany is in an economic crisis. What are we doing wrong?
The main cause is the collapse of German investment due to austerity policies, first under Gerhard Schröder and then under Angela Merkel. This policy was exported throughout Europe after 2009, depressing overall demand, reducing investment and making German exporters dependent on Putin's cheap gas and Chinese demand.
Overall, the German business model has relied too much on competitiveness through wage restraint and too little on productivity growth, requiring significant investment. As a result, German industry has lost its way with the current industrial revolution: green energy, green technology and cloud capital.
The resulting deindustrialization will not be able to be reversed by wage pressures or subsidies, especially since the German government lacks fiscal space to compete with the expansionary investment programs of the United States and China.
“The EU was never in a debt crisis”
Do you think the debt crisis in the EU is over?
It was never a debt crisis. It was a crisis that, caused by the collapse of Wall Street in 2008, led to the bankruptcy of German and French banks. The successive bankruptcies of EU governments, starting with Greece, were a symptom that was “cured” with the printing of more than eight trillion euros by the European Central Bank, but the cause of the original crisis, which today has become a process of The deindustrialization and transformation of Europe have not been eliminated.
What opportunities do you see for the euro?
Maintaining the euro is a political decision. As long as there is political will, the euro will survive. But that's not the interesting question. The interesting question is: how long will our political leaders maintain a monetary architecture that comes at the expense of the ability of our social economies to create green, shared prosperity?