Yanis Varoufakis interview: ‘Anything’s better than austerity'

Greek finance minister insists deal with troika has not compromised his leftist principles

Last week, in between a hectic schedule of meetings with his euro zone counterparts in Brussels and colleagues and officials on his home turf, Greece's finance minister Yanis Varoufakis found the time to attend a performance in Athens of Happy Days by Samuel Beckett, one of his favourite playwrights.

In the two-act, two-character play, Winnie is slowly sinking into a mound of earth as she engages in her daily routine as best she can, while repeatedly intoning to her increasingly indiscernible husband Willie the refrain: “Oh this is a happy day”.

For the 53-year-old economics professor turned politician, this “creative, artistic portrayal” of asphyxiation helped him escape from the tough reality of the negotiations, which he admits left him gasping for air.

The performance, at Greece’s National Theatre, was “elevating, because good art, even if it is very depressing and concerns asphyxiating topics, makes one float in mid-air with happiness. And that’s the feeling I got.”


Varoufakis seems relieved his government’s first “battle” is over and that it’s now got some breathing space to plan its next steps.

He speaks in his central Athens ministry a day after the institutions – as the country’s troika of lenders has been renamed in a nod to Greek sensitivities – extended the country’s loan agreement for another four months after agreeing to six pages of reform proposals he submitted.

Spectacular somersault

And although many observers outside


and some of his own party’s elected representatives view the deal as a spectacular somersault on his leftist Syriza party’s electoral programme, he’s adamant that “Greece did very well” in securing agreement on a text that is “constructively ambiguous” for it to appeal to both sides.

“Good compromises don’t always satisfy everyone, and leave in a sense everyone somewhat dissatisfied. But the mandate from our party, our government and my prime minister was very straightforward. To get a deal done. So, compromise. The question is if we have compromised our basic principle. And the answer is a big, fat no.”

That basic principle was twofold. It involved “blending two competing principles. The first was the principle of maintaining the commitments that the state had signed up to. Then there is another principle, that of democracy, that we had a mandate to challenge this programme.

“And these principles had to be somehow made compatible in the euro group, and that was a challenge. Our mandate was to struggle against this black and white, this either/or, and to create a third way.”

It was crucial to vindicate the democratic process. “I was even told that elections don’t change anything. The moment we go out and advocate that point, we really have done European civilisation a great disservice.”

The deal, he says, accommodates continuity and democracy, and managed to separate Greece’s loan agreement with its creditors from the memorandum of understanding and its conditions, as implemented by the troika.

Had his government accepted both the loan agreement and the memorandum, democracy would have been annulled. Had both been rejected, Greece would have been left with no banking system.

"It's a mixed bag. It's a triumph for democracy and marks the end of automated austerity," he says. The latter term is significantly different from the "end of austerity" proclaimed by his prime minister, Alexis Tsipras, on election night.

“But we must not backtrack by allowing the memorandum to creep back. And we have to find ways of convincing our partners and the institutions that the only way our partners can get all their money back is if Greece grows.”

Conciliatory approach

When asked whether Greece could have achieved more had it adopted a more conciliatory approach at the euro group, as his counterpart

Michael Noonan

and other Irish Ministers have suggested, Varoufakis delivers an emphatic “absolutely not”.

While he declined to respond directly to Noonan’s recent comments likening him to a rock star and to academic economists and experts that were very good in theory but not good in practice, he said Greece’s previous experience in Brussels meant a robust approach to negotiations was essential.

“My predecessors in this job went along with the eurogroup’s policies to the full. They bent over backwards to accommodate the memorandum and the policies of internal devaluation and fiscal consolidation, and the so-called reforms that were imposed on Greece.”

And he points to where that has landed Greece. “It has been a complete and utter catastrophe. There’s humanitarian crisis is on the boil because they were so ‘good in practice’, this is quoting Michael Noonan. And I hope that I’m not so good in practice.”

Regarding Noonan’s other criticism that he was too theoretical, the Greek minister says he understands that “my colleagues in the eurogroup were disconcerted that one of their members insisted on talking macroeconomics”.

“One of the great ironies of the eurogroup is that there is no macroeconomic discussion. It’s all rules-based, as if the rules are God-given and as if the rules can go against the rules of macroeconomics.

“I insisted on talking macroeconomics.”

But Varoufakis said he welcomed Noonan’s comments, made at a conference in London on Wednesday, that he agreed in principle with the idea of swapping Greece’s official debt for growth-linked bonds.

“Michael Noonan is quite right. We need to restructure Greek debt. My proposal for GDP-linked bonds has one purpose: to increase the amount of money we give back to your partners by encouraging them to allow us to grow.”

Greece can’t be left to sink, like Winnie in Beckett’s play.

“Anything is better than confining us to an austerity hole where we shrink every day,” he says.

Damian Mac Con Uladh

Damian Mac Con Uladh

Damian Mac Con Uladh is a contributor to The Irish Times based in Athens