economics editor at Channel 4 News. He is producer of the forthcoming documentary about Greece titled And Dreams Shall Take Revenge.
emeritus professor of economics at University of Massachusetts, Amherst, and visiting professor at New School University. He hosts a weekly national radio program called Economic Update on about 45 radio stations, including Pacifica stations WBAI, KPFA, KPFK and KPFT. He’s the author of several books, including, most recently, Democracy at Work: A Cure for Capitalism.
Greek Prime Minister Alexis Tsipras has arrived in Brussels for an emergency eurozone summit two days after Greek voters overwhelmingly turned down the terms of an international bailout in a historic rejection of austerity. On Sunday, Greeks, by a 61-to-39-percent margin, voted against further budget cuts and tax hikes in exchange for a rescue package from European creditors. Tsipras is scrambling to present a new bailout proposal as Greek banks remain shut down. If Greek banks run out of money and the country has to print its own currency, it could mean a state leaving the euro for the first time since it was launched in 1999. Euclid Tsakalotos was sworn in Monday as Greece’s new finance minister, replacing Yanis Varoufakis, who resigned following Sunday’s referendum. Tsakalotos, who has called for a "Europe of equals," had served as Greece’s main bailout negotiator and has been a member of Syriza for nearly a decade. Like Varoufakis, Tsakalotos has been a vocal opponent of fiscal austerity imposed by the core of the eurozone, saying it has unnecessarily impoverished Greece. We go to Athens to speak with Paul Mason, economics editor at Channel 4 News, and economics professor Richard Wolff.
AMY GOODMAN: Greek Prime Minister Alexis Tsipras has arrived in Brussels for an emergency eurozone summit two days after Greek voters overwhelmingly turned down the terms of an international bailout in an historic rejection of austerity. On Sunday, Greeks, by 61-to-39-percent margin, voted against further budget cuts and tax hikes in exchange for a rescue package from European creditors. Tsipras is scrambling to present a new bailout proposal as Greek banks remain shut down. If Greek banks run out of money and the country has to print its own currency, it could mean a state leaving the euro for the first time since it was launched in 1999. German Chancellor Angela Merkel and French President François Hollande met in Paris Monday to discuss the crisis.
PRESIDENT FRANÇOIS HOLLANDE: [translated] We have been paying close attention to the voting results, and we respect Greece’s referendum. The door remains open for discussions. It is now up to the government of Alexis Tsipras to make serious, credible proposals so that this willingness to stay in the eurozone can be realized.
AMY GOODMAN: In Athens, Euclid Tsakalotos was sworn in as Greece’s new finance minister, replacing Yanis Varoufakis, who resigned following Sunday’s referendum. Tsakalotos had served as Greece’s main bailout negotiator and has been a member of Syriza for nearly a decade. Like Varoufakis, he has been a vocal opponent of fiscal austerity imposed by the core of the eurozone, saying it has unnecessarily impoverished Greece.
EUCLID TSAKALOTOS: [translated] I will not hide from you that I am nervous and very anxious. It’s not the easiest time in Greek history to be taking on this job. There are class issues with this vote, simple working-class and middle-class people who have lost their businesses, so that we want to trust the government that will deliver a viable solution.
AMY GOODMAN: To talk more about Greece, we’re joined by two guests. In Athens, Paul Mason is with us, economics editor at Channel 4 News, producer of a forthcoming documentary about the rise of Syriza in Greece titled And Dreams Shall Take Revenge. And here in New York, Richard Wolff is with us, emeritus professor of economics at University of Massachusetts, Amherst, visiting professor at New School University here in New York. He hosts a weekly national radio program called Economic Update, the author of a number of books, including Democracy at Work: A Cure for Capitalism.
Let’s go first to Athens. Paul Mason, first, were you surprised by Sunday’s vote? And talk about what this means now.
PAUL MASON: I was surprised by the size of it, but, of course, all the opinion polls were effectively rubbish, because you just can’t opinion-poll a country like this on an issue like this. But the size of it astonished not only the journalists, but also the Syriza leadership, as well. I think both the size of the rally that preceded it on Friday night visibly shocked the leadership around Alexis Tsipras—I mean, it filled the square behind me and several streets around it; it was six times bigger than the opposing right-wing "yes" rally—and then the vote itself. You know, there’s probably maybe 35 percent, 40 percent leftist voters here. To get 60 percent means that liberals, conservatives, just people who are not political must have voted for the "no."
And I think it just—it’s part of actually what we’re observing here on the ground: a very rapid radicalization of population. I think it’s probably fair to say nine out of 10 of the media groups that are camped out here in Greece are not getting that, because they’re tied to these satellite dishes that are all around me, but there is a radicalization going on. And it happened in the last two days of last week, when people saw TV stations, owned by oligarchs, pumping out not only the usual one-sided news, but actual straightforward sort of World War II-style propaganda for the "yes" camp. Many people said they switched their votes when they saw these TV stations break even the most rudimentary Greek—which are not very good—TV regulations and became—basically, they make Fox News look objective.
AMY GOODMAN: I want to ask you about Yanis Varoufakis, who briefly spoke to reporters after he announced his surprise resignation as finance minister on Monday.
YANIS VAROUFAKIS: [translated] What is happening here is just a change of the guard between something more than comrades. We are friends, colleagues and fellow academics. Euclid and I have shared similar philosophical, ideological views for a long time now.
AMY GOODMAN: Yanis Varoufakis left the Ministry of Finance with his wife, Danae, on the back of a motorbike, downtown Athens, on Friday, two days before the Greek referendum. He was interviewed by you, Paul, for Channel 4 News. This is a clip of what he said.
PAUL MASON: Yanis Varoufakis, you said yesterday you’d resign if there’s a "yes" vote on Sunday. What will you do if there’s a "no" vote?
YANIS VAROUFAKIS: We’re going to press ahead. We have a deal to make, one that is viable, unlike the deal that was offered to us by the institutions. The only reason why we’re having this referendum, Paul, is because we were given an ultimatum on the basis of a set of proposals, which we consider to be nonviable. In other words, next week, two weeks from now, three weeks from now, two months, four months from now, we’re going to be still mired in an endless negotiation, with economy fading, without investment. And we thought that we should put this to the Greek people: Accept this if you wish, but if you don’t, empower us with a "no" to seek a better deal for Europe.
AMY GOODMAN: So, Yanis Varoufakis said he would quit if there was a "yes" vote. There was an overwhelming "no" vote, and he quit. Paul Mason, explain.
PAUL MASON: Well, look, the official explanation is that he did it to lessen the physical and sort of moral friction there is with the creditors. He has been winding them up very—very effectively for months, and they don’t like him. The reason they don’t like him is because he’s U.S.-trained. He speaks perfect English and speaks the language of the IMF, the World Bank and Wall Street, and indeed Silicon Valley, where he worked. That’s the official reason.
I think there’s an extra set of reasons, though. And it’s like this. Varoufakis privately, throughout these negotiations, I think, was urging a tougher stance, an earlier break. The break only really—it’s called "the rupture" here in Greece. The strategy of rupturing with the lenders began only in June, early June. I think he wanted to do that earlier. I think he wanted them to go out to the people, physically, earlier.
And I think the other thing is, because he’s a professional economist whose entire career has been based on this critique of austerity, as finance minister, what’s he going to do? The best deal they’re going to get today is going to be eight billion euros’ worth of austerity over two years, because that’s what they offered two weeks ago. I know that he believed that deal itself is a recessionary deal, unless there’s several tens of billions poured into Greece in the form of a kind of Marshall Plan that would offset it. So I think he’s taking a step back.
The other thing is psychologically—[inaudible] psychologically, about the background of the two men. Tsakalotos and Varoufakis are both people I’ve spoken to at length during this crisis. Tsakalotos is somebody who is organically from the far left, from that New Left generation that you know very well, Amy, and that your listeners probably know very well, going back to the Port Huron declaration, etc., in the '60s. Varoufakis is not. Varoufakis came to the far left from the center. And I think that just, basically, people know, who have been on the left for some time, for decades, that it tends to build a level of patience in you. You can do things and accept things moving slowly. Varoufakis, mentally, I think, wanted to win, and he wanted to win big time and to win now. They're not going to win now. And so, somebody is going to have to sign a deal that is a compromise.
And maybe they win, maybe—or they advance, when they’ve actually shored up behind them in Greek society a little bit more support for the things they want to do, because although 60 percent of people voted no, you don’t see 60 percent of people on the streets out there protesting in favor of Syriza. You don’t see 60 percent of people out there self-organizing, doing the soup kitchens, doing the voluntary pharmacies. And the Syriza activists will tell you that’s the hardest part. So I think for the strategists of Syriza—and Tsakalotos is a strategist of the Syriza party—this is one step in an advance of taking Greek society down the route of a left-wing project. And maybe Varoufakis will be leading, as it were, from the sidelines. I know when I spoke to him, he was looking forward to being a back bencher.
AMY GOODMAN: I want to turn to comments made by the new Greek finance minister, Euclid Tsakalotos, earlier this year. While speaking to Sinn Féin activists in March, he described the negotiations between Greece and its creditors as part of a wider ideological struggle across Europe.
EUCLID TSAKALOTOS: We will be seeking to negotiate a new deal to address Greece’s nonsustainable debt. No economy that has lost a quarter of its GDP, has 25 percent of its population unemployed and over 50 percent of its young people unemployed, and has one-third of its population facing extreme poverty can be expected to repay its debt with a succession of years of very high primary surpluses. For all of this, we need the solidarity of European peoples. Some European governments will be arguing that we should not give problematic Greeks special treatment. But you know that we are not asking for special treatment, but for equal treatment in a Europe of equals. Greece—Greece had had the biggest per capita fiscal adjustment of any economy since the crisis began—hardly special treatment, especially when you consider that the bailout was more to serve Northern banks than sovereign peoples.
AMY GOODMAN: That’s the new Greek finance minister, Euclid Tsakalotos, earlier this year in Ireland addressing Sinn Féin. We’re joined by Paul Mason. He is in Athens, Greece. He has been intensively covering Syriza and what’s been going on in Greece. And in New York, we’re joined by Richard Wolff, a professor, economist here at The New School. Your response to what is happening and what the new finance minister was just saying?
RICHARD WOLFF: I think the real importance of what is happening in Greece is that fundamentally a poor corner of Europe has said it will no longer absorb the disproportionate burden of this crisis and of the bailouts that have been used to cope with it. Basically, what is going on here is that the richer countries of Europe, led by Germany, are shifting the burden of all these crises—that they are responsible for—onto people in Greece. They never imagined that in trying to do that they would generate their worst nightmare: a left-wing political organization that goes from 4 percent of the vote a few years ago to an ability to call out a referendum and get 60 percent of the people to support them. So, they have generated a response, and that struggle, of which this is only one step, is what’s being played out here. And that’s why it’s relevant to the rest of Europe and to the United States, everywhere where there is mounting evidence of people saying, "No, we will not continue to absorb the costs of a system that works in this dysfunctional way."
AMY GOODMAN: We’re going to go to break, and when we come back, to talk about what the alternatives are, what the alternatives to austerity are, in Athens, as well is in Europe, and even here at home. We’re joined by New School professor, economist Richard Wolff, as well as Paul Mason, who is the economics reporter for Channel 4 News—economics editor, speaking to us from Athens. This is Democracy Now! Back in a minute.
AMY GOODMAN: "Zorba’s Dance" from the 1964 film Zorba the Greek, Mikis Theodorakis. His popular songs and music, including the scores for the movies Zorba the Greek and Z, were banned during the military dictatorship of the 1960s and '70s in Greece, and Theodorakis spent much of his three years of banishment in a remote village and in prison. This is Democracy Now!, democracynow.org, The War and Peace Report. I'm Amy Goodman.
As we talk about what’s happening in Greece, what’s happening in Europe, what is the trend that’s happening in different places all over the world and the global repercussions of the battle taking place over austerity in Greece? Paul Mason with this, economics editor, Channel 4 News, producer of a forthcoming documentary about Greece titled And Dreams Shall Take Revenge. And with us here in New York, Richard Wolff, well-known economist, formerly at University of Massachusetts, Amherst, now at New School.
Paul Mason, before we lose you on the satellite, do you share this view that this is a turning point in European history?
PAUL MASON: Tonight and tomorrow are absolutely strategic moments for Europe. I’m sorry, Amy. Tonight and tomorrow are absolutely strategic moments for Europe, because the Europeans know that not only did 60 percent of people in Greece vote against the austerity, but that means the structural reforms that the IMF always try to do, that the Greeks have been saying won’t work here, won’t work here as a fact. You cannot impose economic structural reforms on a population that has voted 60 percent against them, with the television blaring out propaganda for them, every TV station and every newspaper, virtually, doing that. You just can’t do it. It’s not a question of argument; it’s a question of fact.
Because they know that, the Europeans—Merkel and Hollande—met last night, and they were supposed to come up with something. We’ll find out today what that thing is. If it is more division, if it is more recourse to the rules—because the rules of the European Central Bank say that the Greek banks should be forced into submission, the rules of the various bailout funds say that Greece should get no more money—well, the rules are going to destroy Europe, in that case. If they cannot break out of the rules, then they are going to be—it’s no longer here are Syriza and the Greek people the actor, the protagonist in the drama. The protagonist is Europe. And we need to decide whether it has a single personality or a split one. We need to decide whether or not it is going to save Greece or not. And we’ll probably find that out in the next 36 hours. If not, the streets behind me, which are calm now—and they remained calm in the face of a very big media attempt to cause panic—will eventually reach some kind of breaking point, because you can’t shut supermarkets and pharmacies and doctor surgeries for so long, for too long. They’re open now, but if the banks collapse, it will be—it will be an uncharted territory.
And, of course, the other thing is Syriza’s response. Yesterday, Syriza can be in a meeting of every party except the Communist Party. Communists here dislike Syriza more than they dislike capitalism. But every other party agreed to back Syriza in its negotiations today. If the ECB decides to completely crash the Greek banking system, I do not believe this government will do what a normal government would do, which is to first of all wipe out the shareholders and then wipe out some of the depositors. They will more likely wipe out the private ownership of the banks themselves and nationalize them. If they do that, that is like pressing a nuclear button for the European Union. And most likely, Greece will find itself suspended from the European currency’s payments mechanism, TARGET2. At that point, we’re into what we call "Grexit," Greece’s exit from the eurozone. Everybody in the Syriza leadership who I’ve spoken to, personally and privately, in the last 48 hours, fervently wishes they do not get to that point. They do not want to get to that point. But this is not a party that’s going to step back and just do what the international finance people want it to do. They would rather lose power than do that, and they know now that 60 percent of people would rather they did not lose power.
AMY GOODMAN: The ECB being the European Central Bank.