King College London : Varoufakis warns that Britain should remain in EU

Varoufakis warns that Britain should remain in EU

Posted on 26/01/2016

credit: fdecomite [CC BY 2.0], via Wikimedia Commons

Professor Yanis Varoufakis, the former Greek Finance Minister who earned notoriety when negotiating with the International Monetary Fund and European Central Bank to prevent his country becoming bankrupt, last night warned at an event at King's College London that despite the financial breakup of Europe, Britain should remain part of the EU.

Professor Varoufakis spoke in his lecture Creditors who do not want their money back: the curious case of the Greek bailout, and its implications for Britain and the EU organised by both the Department of Political Economy and King's Finance and Economics student society, to mark the anniversary of the famous election which saw the radical Syriza party brought to power in Greece. Professor Varoufakis reflected on his experiences as Finance Minister and the fierce confrontation he had with Greece's creditors which reverberated around the world. He explained that the bailout for Greece was not as it seemed and was actually a second rescue for Germany's banks. A professor of economics at the University of Athens, the former minister described how government economists informed him on his first day in office that 'things were not as bad as we thought' and that his country had '11 -15 days' before defaulting on the £6bn debt owed to international creditors.

According to Professor Varoufakis, the proposal he developed with a number of highly respected international economists including former US Treasury Secretary Larry Summers and former Chancellor of the Exchequer Norman Lamont, would still work to prevent Greece becoming bankrupt even today. Joking with the audience of students, academics and journalists, he stressed that Britons should realise that what we considered austerity here is nothing compared to austerity in Greece, saying that 'austerity sucks' as President Obama had whispered in his ear. 'It was clear that the bail out of Greece was never going work. It was politically impossible for Merkel to go back to return to the banks asking for a second bail out in addition to the £500 billion already obtained. Instead it was solidarity with Greece.'

Describing the Eurozone as being pulled apart he said the portrayal of the 'cynical' transfer of bank losses from the books of the banks onto the shoulders of the taxpayers as solidarity with Greece was unfair.

Acknowledging that while not everyone necessarily always listened, Professor Varoufakis described the influential meetings he had in hotel receptions and the 'intolerable silence and to add insult to injury toxic propaganda' he faced during the months of negotiations when he tried to save his country from financial collapse. He said 'The Eurozone has disintegrated - Europe remains strong - but the Eurozone has disintegrated. If you look at how the public debt of the most fiscally stressed states is distributed in Europe you will find that it is most concentrated in the same areas - a Euro in a Spanish bank account is not the same as a euro in a German bank, it certainly is not the same as in a Greek bank account.'

Professor Varoufakis concluded that he and his fellow minsters had an 'armoury' of proposals, which political circumstances never allowed them to use. Turning his attention specifically to Britain, Professor Varoufakis said that Britain's Labour party should not run a campaign over austerity but rather an updated version of Wilson's 'white heat of technology'. Despite his reservations about the Eurozone and his experiences as Finance Minister of a country in the throes of bankruptcy, he believes Britain should still remain in Europe. 'Despite the deep contempt for democracy, despite the insane economic policies and despite the processes of decision making that turn off Europeans away from Europe, I would still recommend that Britain remains in Europe'

Professor Shaun Hargreaves Heap from the Department of Political Economy said: 'We would like to thank Professor Varoufakis for a very informative lecture on an incredibly complex and politically sensitive topic. He has called on his recent experience as a European finance minister and his deep academic understanding of economics to give us a true indication of why Britain should stay within the EU.'

Professor Varoufakis will also speak on Tuesday 26 January at Professor Shaun Hargreaves Heap Inaugural Lecture at King's College London.