Yanis Varoufakis: The second man of our Greek moment

Greece’s freshly minted finance minister is London this week. Since Syriza’s earth shaking win in Greece last month, Yanis Varoufakis has been making some tremors of his own. He has threatened an alliance with Moscow and has ruled out co-operation with the dreaded Troika. So who is Yanis Varoufakis?


Greece’s new finance minister

Academic yet articulate. An intellectual heavyweight but far from a wonkish bore. A nice counterweight and change to the drab but not-so-benign technocracy that rules in Berlin, London and Brussels. Yanis Varoufakis has been spearheading Greece’s charm offensive-slash-rhetorical counterpunch this week for a reason. He comes as an academic economist of some repute. He has taken academic posts in the US, the UK and Australia and has co-authored work with James K. Galbraith, the son of the great JK Galbraith. He is also armed with a potent rhetorical style. 


 “What we’ve been having ever since is a kind of fiscal waterboarding that have turned this nation into a debt colony”


This quote above, delivered in a generous feature on Varoufakis in the Daily Telegraph (of all places), is very much of the forked tongue variety. But Varoufakis is armed with a silver tongue too, as anyone who watched his interview on the BBC’s Newsnight last week will testify. His credibility as an economist is not merely based on a CV padded out in Europe, the US and Australia but, as the Telegraph admits, he is also not some ‘radical zealot’ or some crusty old Marxist who can’t get to grips with his computer let alone the last thirty years. On the contrary – he is prolific blogger and user of social media. He is clearly of the left. He is clearly no fan of the Euro or Greece’s membership of it, but sees a Greek exit today as wholly undesirable. He only joined in Syriza in 2012 and has used his blog to promote the party and his proposals for a Greek haircut and debt default. He has been consistent too. His co-authored Modest Proposal for Resolving the Eurozone crisis is modest in the sense that not in fact ‘radical’. The four pronged case, as he and co-authors admit, does not offer a fundamental change to EU institutions and would in fact aid the stuttered creation of a European Banking Union by removing middle men in member states (governments, central banks) that slow a process of bank recapitalisation. This points to reinforces an observation of Varoufakis: He is not some anti-EU, screaming ex-communist populist fruitcake. He is pro-European, without being pro-Euro, and sees a envisions a substantive European dimension to how economic policy is delivered on the continent; one far more substantive than the one that currently exists. Living proof that believing in such things does not require committed faith to the Euro.




Clever Euro-politicking

Varoufakis’ economic policy credo gives him a firm footing to perform his first task as finance minister. This, perhaps ironically, is one however that is much more foreign policy orientated. He has been dispatched on a diplomatic offensive to deliver a very clear message: The new Greece means business and has serious minds at work committed to fulfilling its promise to Greek voters. His attempt to realign Europe’s diplomatic furniture is sure to offend Angela Merkel who had got all the austere looking foot stools and dollies just how she wanted. This strategy is not meant to offend, it is entirely strategic. The rather provocative overtures made by Varoufakis to Moscow are a good case in point. These are clearly part of diplomatic attempt to unsettle an emerging Merkel-EU position that wanted to see Russia isolated. Whether, given Russia’s current fragile economic position, the Kremlin would be interested in assisting Greece in the event of a default prompts obvious further questions, but Russia would at least attempt milk this, even a variety of economic circumstances were to limit any Russian forays into EU-Troika politics. His overtures this week to French and Italian premiers is part of the same plan. He has stated that Greece will not negotiate with the Troika and instead will only deal with national partners. In reality this Troika is not a Troika but a four pronged fork with Berlin acting as a key enforcer of Troika policies. With Merkel demanding the French and Italians extend fiscal consolidation policies in view of an on-going Euro-quagmire, the value Greek attempts to forge a pincer movement against Berlin has an obvious logic. One might think it is more likely to work in France where President Hollande is desperate, but he however is saddled by a right-leaning (nominally socialist) Prime Minister who would baulk at such an anti-austerity alliance. Italy’s Matteo Renzi too is likely to tow a German line, but a few weeks of looming crisis, as Greece steps nearer to default, might provide exactly the sort of ingredients for change. Whilst other European leaders might be wooed under the duress of public opinion, Merkel will need to cornered. How effective Varoufakis is will have a huge bearing on the future of the European project, as well as Greece.



Yanis Varoufakis’ Publication list

  • The Global Minotaur: The True Origins of the Financial Crisis and the Future of the World Economy, London and New York: Zed Books, 2011, Second Edition, 2013
  • Economic Indeterminacy: A personal encounter with the economists’ peculiar nemesis, London and New York: Routledge, 2013
  • Modern Political Economics: Making sense of the post-2008 world, London and New York: Routledge, (with J. Halevi and N. Theocarakis) 2011
  • Game Theory: A Critical Text, London and New York: Routledge, (with S. Hargreaves-Heap), 2004
  • Foundations of Economics: A beginner’s companion, London and New York: Routledge, 1998
  • Rational Conflict, Oxford: Blackwell Publishers, 1991
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