Yanis Varoufakis: Bailouts of Greece are Pretense for Massive Payout for German and French Banks

April 28, 2016


Yanis Varoufakis

former finance minister of Greece and a professor of economic theory at the University of Athens.

We continue our conversation with former Greek Finance Minister Yanis Varoufakis as the White House is backing calls for Greece to continue to implement widespread austerity measures, following President Obama’s meeting with German Chancellor Angela Merkel earlier this week. Greece and its international creditors are once again negotiating the terms of the bailout and the extent of the austerity measures creditors can impose. Varoufakis responds to the German government’s claim that the majority of Germans oppose giving more money to Greece, and addresses the previous bailouts. "What happened to that money? It wasn’t money for Greece. It was money for the banks," Varoufakis says. "The Greek people took on the largest loan in human history on behalf of German and French bankers." He notes the conditions of the loan "guaranteed our national income would shrink by one-third. So it was impossible to repay that money." He says he opposes taking additional funds until the country’s economy is more stable.


This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: That’s Public Enemy, "By the Time I Get to Arizona." And that’s where we are right now. We’re in Flagstaff at Northern Arizona University, as we continue our 100-city tour, heading on to Phoenix this afternoon and Tucson at the Convention Center tonight. I’m Amy Goodman, host of Democracy Now! Nermeen Shaikh is in New York with our guest, Yanis Varoufakis, the finance minister of Greece who resigned over austerity. Nermeen?

NERMEEN SHAIKH: I want to turn to Michael Fuchs, a senior member of German Chancellor Angela Merkel’s CDU party. He was asked in February 2015 why the majority of Germans were opposed to giving money to Greece.

MICHAEL FUCHS: Well, it’s a little bit the Greek government, and particularly Mr. Varoufakis, who came up with some wordings which were not really in a way somebody who’s—well, who is in a demand—is in need of money, and he should not handle our finance minister, neither our chancellor, like he did. And so, it was quite insulting our people. And that’s one of the reasons the Germans are pretty upset about the situation.

NERMEEN SHAIKH: That was a member of Angela Merkel’s CDU party. So, Yanis Varoufakis, could you comment on what he said about your negotiating style and its impact on how the Germans saw the Greece debt crisis?

YANIS VAROUFAKIS: Oh, by the way, there’s no such thing as the Germans. If you go to Germany, you get a variety of opinion. We began our Democracy in Europe Movement with our comrades in Germany. Everywhere we go in Germany, we have immense support as a pan-European democratic movement. It is the German government that saw me as a major, major inconvenience. And you know what? They were very right to see me as a major inconvenience.

And you know why I was extremely inconvenient? Because I didn’t want any money. What I was saying to our electorate before the election, that was the basis for my being elected. And what I was saying to the creditors after my election was very, very simple. The problem is not that Germany has not paid enough. Germany has paid too much, in the case of the Greek bailout. We had the largest loan in human history. The question is, what happened to that money? It wasn’t money for Greece. It was money for the banks. And the Greek people took on the largest loan in human history on behalf of German and French bankers, under conditions that guaranteed that their income, our income in Greece, would shrink by one-third. That is Grapes of Wrath, John Steinbeck material. One-third of national income, poof, disappeared. So it was impossible to repay that money. And they knew that, in the first place. So the only reason why they effected this so-called bailout of Greece was to save their own banks and to present this as solidarity with Greece. And my simple line was this: We’re not going to take another euro from the German taxpayers, from the hard-working people of Germany, of Slovakia, of France, until and unless we stabilize our economy.

And, you know, let me put it this way. The German Swabian housewife, the Protestant ethic, what does it recommend? That if you’re bankrupt, you should not borrow more money. Right? So this is what I said. This is why I was extremely inconvenient, because I was utilizing the ethos and the morality of the Protestant ethic, of the spirit of capitalism, according to Weber and to the German traditions. And they just—they couldn’t believe it, that here was a Greek finance minister who was not asking for more loans. So, you know, I can understand why the gentleman was very upset with me.

AMY GOODMAN: Ninety-one percent of the bailout went to German and French banks?

YANIS VAROUFAKIS: Yes. Well, the first bailout, the first bailout. The second bailout, 100 percent. And the third bailout, which I didn’t sign, Amy, it was $85 billion. Of that, precisely zero will go to Greece. So, these are just typical extend-and-pretend loans.

What happened was very simple. In 2010, the Greek state went bankrupt, because it was part of a common currency area, a monetary union, that was simply not fit to the purpose of sustaining the great financial collapse of Wall Street, the city of London, the Frankfurt banks, the French banks, etc., and the Greek banks, and so on and so forth. So, there was a cynical transfer of private sector, private bank losses onto the shoulders of the weakest of taxpayers, the Greeks, knowing that those shoulders were weak, so weak that they wouldn’t be able to sustain that burden, and that burden would then be transferred to the shoulders of the German, the Slavic, the French taxpayers. And once they did this, it’s like Shakespeare, it’s like Macbeth: You commit one crime, then you have to commit a second crime to hide the fact that you committed the first one, and then a third one, and then a fourth one. And the second crime, of course, was the second bailout, because once the first bailout makes whole the bankers, then, within a few months, it becomes abundantly clear that the Greek state cannot sustain that loan. So, a second predatory loan is enforced upon the Greek government in order to pretend that it is making its payments for the first loan, and then a third one, and then a fourth one. And the worst aspect of it is that these loans, which were not loans to Greece, were given, extended, on condition of stringent austerity that shrunk our incomes. So we entered a debt deflationary cycle, a great depression, with no end in sight, and a great depression which sees—has absolutely no chance of a New Deal kind of solution like we had here in the United States in the 1930s, as long as the powers that be in Berlin—we heard the White House spokesman siding himself completely with Berlin—insist that this extending and pretending shall continue.

The original content of this program is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. Please attribute legal copies of this work to Some of the work(s) that this program incorporates, however, may be separately licensed. For further information or additional permissions, contact us.

Email icon redDaily News Digest