windwindtour

THEGLOBEANDMAILSATURDAY,JANUARY7,2017GB5REPORTONBUSINESSWEEKENDTHEROBINTERVIEWTheexplosivepubliccareerofYanisVaroufakisstartedinJanuary,2015,andendedlessthansixmonthslater,whenheresignedasGreekfinancemin-isterafteraccusinghisboss,PrimeMinisterAlexisTsipras,ofwholesalesellout–"surrender,"hecalledit–toGreece'sbailoutoverlords.
Theworld'smostfamousfinanceministeratthetime,heswunghislegoverhishigh-poweredYamaha,truetohisstyle,andfledthecorruptionanddecayofAthenswitharoarofthemotorcycle'senginelikeaGreekMadMax.
Hisexitmeantthatthehigh-stakesgamethatcouldhaveseenGreeceremovedwillinglyorunwillinglyfromtheeurozone,andpossiblytheEuropeanUnion,wasover.
ThebailoutnegotiatorsinBrusselsandBer-lincelebratedthedepartureofthecombativeMr.
Varoufakis,whohadwantedtoreplacetheproposedthirdbailout,andthecrushingausteritythatwouldgowithit,withagentlerdebt-re-structuringandeconomic-reformeffort.
AsMr.
Varoufakis,nowsome-whatlessfamous,stridesintotheRoofGardenrestaurantoftheelegantHotelGrandeBre-tagneonSyntagmaSquare,groundzerooftheanti-austerityriotsandproteststhatroutinelyturnedAthensintoawarzoneinthecrisisyears,Iwondertwothings:Doeshemissthehead-line-a-minutedramathatturnedhimintoasuperstar,anddoeshethinkGrexit–Greece'sexitfromtheeurozone–isstillpos-sibleTheshortanswersare"No"and"Yes,"respectively.
IamnotsureIbelievehisresponsetothefirst.
Idotothesecond–Grexit,pushedoffthefrontpagesinthepastyearbyBrexit,refugeesandDonaldTrump,isbackinthenews.
ButIwouldlearnlaterinourlunchthatGreece'sfateisnotforemostinhismind.
Europe'sis.
"TheEuropeanUnionisinanadvancedstateofdisintegra-tion,"hesays.
"Themetanarra-tiveofEuropeisfragmented.
PeoplearenolongerthinkingintermsofEurope.
…Everyonehasadifferentnarrativeandwhenyouputthemtogether,yougetapictureofimplosion.
"Hesupportshispointbycitingno-growth,debt-soakedItaly,theeurozone'sthird-largestecono-my,wherethepartyleadingthepolls,BeppeGrillo'sFiveStarMovement,iscallingforarefer-endumontheeuro.
"WenowhaveItalexitonthetable,"hesays.
"Italyisnotsustainableintheeurozone.
"Mr.
Varoufakisisabout10min-uteslateforourlunch,which,byGreekstandards,isunfashion-ablyearly.
EventhoughIamnotwearingmyglasses,andamsit-tinginaboothattheoppositeendoftherestaurant'sentrance,hisshavedheadandtheblack-motorbikehelmethehandstothematred'makehiminstantlyrecognizableatadistance.
Upclose,heseemsabitshorterthanIhadexpected(Ihadonlyseenhimincrowdsituations).
Wearingblackjeans,black-leath-ershoes,adark-violetshirtandblueandbrownscarf,heisinfullbiker-chicmode.
LikeMr.
Tsipras,whoisstillPrimeMin-ister,necktiesarealientohiswardrobe.
Onlyafewpatronsinthehalf-emptyrestaurantgivehimmuchnotice.
Ayearandahalfago,hewouldhavebeenmobbed.
OurtablehasamagnificentviewoftheAcropolis.
Ithadrainedhardallweek,butonthisdayafewweeksago,thesunmanagestopiercethegrey.
"CanIcallyouYanis"Iask.
"Iinsist,"hesays.
Mr.
Varoufakisisonawhirl-windtourtopromoteDiEM25,whichisshortforDemocracyinEuropeMovement2025butalsoaplayontheLatinaphorismcarpediem–"seizetheday.
"ItellhimthatIwanttolearnaboutDiEMbutfirstIwanttohearabouthisrock'n'rollstintasfinanceminister.
Lunchissimple.
MyguestordersachickensaladandIoptfortherisottowithtruffles.
Nei-therofushasastarterorwine,onlysparklingwater.
Tomysur-prise,Mr.
Varoufakisdoesnotsitacrossfromme,butsmacknexttome,at90degrees,asifwewereoldfriends.
Heispoliteandsoft-spoken,enduringmyinter-ruptionswithgoodgrace–Ihavemorequestionsthanhehastime.
Mr.
Varoufakis,55,wasborninAthensandwaspluckedoutofacademiabySyriza,theradical-leftpartythatwontheJanuary,2015,electionwithamandatetooverhaultheloans-for-austerityprogramledbytheTroika–theEU,theEuropeanCentralBankandtheInternationalMonetaryFund–thatwaspushingtheeconomyeverdeeperintoreces-sion.
Apoliticalleftywhostud-iedmainstreameconomics,andasupporteroftheAfricanNationalCongressandthePal-estineLiberationOrganization,Mr.
Varoufakishadtaughteco-nomicsatvariousBritishuniver-sities,theUniversityofSydneyandtheUniversityofTexasatAustin.
YearsbeforeSyrizawasconsid-eredaseriouscontenderforgovernment,heformedafriend-shipwithMr.
Tsiprasandbecamehisinformaleconomicadviser.
ButevenbeforeSyrizawontheelectionandMr.
Varou-fakislandedinthefinance-min-istryhotseat,hehadnodoubtthatGreecewasbankruptandthatpilingmorebailoutloansontopofoldbailoutloanswouldnotmakeitanylessbankrupt.
"WewentfromPonzigrowth[beforethe2008crisis]toPonziausterity–bailoutloansandstringentausterity,economiccontractionuponcontraction,"hesays.
"Sowhatwehadwasasituationwhereunsustainabledebthadtoberolledover,androlledoveragainandeverytimeitgotrolledover,thedebtgotdeeper.
"Mr.
Varoufakissayshehad"verysolidagreement"withMr.
Tsiprastoeliminatetheneedforathirdbailout–"anightmarescenario"–throughadebtover-haulthatwouldswapdebtforperpetualbondsandbondsin-dexedtogrowthingrossdomes-ticproduct.
Thenewdealwouldincludeaslewofeconomy-boostingmeasuressuchastaxcutsandthelaunchofa"badbank"toridtheailingGreeklen-dersofnon-performingloans.
Syrizaalsowantedaprimarysurplus(thebudgetsurplusafterdebtpaymentsarestrippedout)ofnomorethan1.
5percent.
WhatcouldgowrongAlot,asitturnedout.
Theonewhohasthemoney–theTroikainthiscase–makestherules.
WhatwasnotknownatthetimeisthatMr.
Varoufakiswassecretlyplottingthecreationofanelectronicparallel-paymentsystemincaseastandoffbe-tweentheTroikaandGreeknegotiatorstriggeredarunonbankdepositsandtheclosingofthebanks.
Thesystemwouldcreatere-serveaccountsatthetaxoffice.
Ifyouwereataxpayer,youcouldtransfercashtothestateinexchangeforadiscountonyourfuturetaxes.
Ifyouwere,say,ahospitalsupplierthatwasowedmoneybythestate,thearrearscouldineffectbetreatedasacurrency;thehospitalsuppliercouldtransferaportionofthearrearstoitsownsuppliers.
Astheplansforthesystemwerebeingdrawnup,thegameofchickenwasbeingplayed,withbothsideswellawarethattheendresultcouldbeGrexit.
Asnegotiationturnedhostileandbrokedown,theECB,inlateJune,2015,decidedagainstboostingitssupportfortheGreekbanks,triggeringafinan-cialcrisis.
Atthatpoint,Mr.
Varoukfakiswantedtodefaultonthe28-billion($39-billionCanadian)ofGreekbondsheldbytheECBandimplementtheparallel-pay-mentplan–thenuclearoption,inessence.
HisthinkingwasthattheTroi-kawouldbackdownandsteerclearofforcingGreeceoutoftheeurozone,eventhoughitwasapparentthatGermanFinanceMinisterWolfgangSchaeublewouldbehappytoseeGreecego.
Atonepoint,Mr.
Schaeublesaidavoluntarydeparturefromtheeurozone"couldperhapsbeabetterway"forGreecethanbeingrailroadedintoathirdbailout.
IaskMr.
VaroufakiswhyhewassoconfidentthatlittleGreececouldstanddownthemightyTroika.
"Youknowwhy1-trillion,howaboutthat"hesays.
"That'swhatitwouldhavecosttheeurozoneunderGrexit.
Onbonds,wehave320-billion.
It'snotasifwewouldhavehadanyabilitytorepayitifwelefttheeuro.
AddtothattheTarget2liabilities[Greece'sdeficitunderthecen-tralbanks'paymentsystem].
Addtothatallthecrossdefaults,publicandprivate,andthedebtsofthebankstovariousentitiesinEuropeandyouendupwithatleast1-trillion.
Sodoyouthinktheywouldhavetakenit"Ofcourse,it'simpossibletosaybecauseitwastheSyrizagovern-ment,nottheTroika,thatpan-ickedwhentheclosedbanksthreatenedtoshutdownthewholeeconomy.
"Whenwegottothecrunchpoint,Iwasnotallowedtoactivatetheparallelsystem,"hesays.
Mr.
TsiprasbegrudginglyacceptedtheTroika'snewbail-outterms.
Mr.
Varoufakisre-signed–heinsistshewasnotpushedout–onJuly6,2015,aweekafterthebanksshut(theyhavesincereopened,butsomecapitalcontrols,intheformofcash-withdrawallimits,remaininplace).
Mr.
Varoufakistookonelastshotbeforeheleft.
"IsaidtothePrimeMinister,'Youjustlostthebattleanditwillberathercalamitousforthiscoun-try,'"hesays.
GreeceisstillamessandGrex-itisnotoutofthequestionwhenthecurrentbailoutpro-gramexpiresin2018.
Thereisnoappetiteoneithersideforafourthbailout.
Mr.
Varoufakis'sconcerntodayisnotmerelythehealthofGreece.
HeworriesaboutthesurvivabilityoftheEUandtheeurozoneinthepost-Brexitera.
Indeed,theEUisundersiege.
Britainisleaving.
MarineLePen,leaderofFrance'sxenophobic,anti-EUNationalFront,couldwinthecountry'sspringpresi-dentialelection.
InItaly,theEuroskepticFiveStarMovement,alreadythebiggestoppositionparty,couldeasilywinthenextelection.
ThegrandEuropean-in-tegrationprojectseemsdead.
Thechallengeistokeepwhat'sleftmoreorlessintact.
"I'mastaunchEuropeanistandIamparticularlyconcernedaboutthissituation.
GrilloandLePenwantdisintegration,luxu-riateintheexpectationofit,"Mr.
Varoufakissays.
"Me,I'mhorrifiedbyit…IfirmlybelievethatthedisintegrationofthisterribleEuropeanUnionwillleadtothepostmodern1930s.
"HelaunchedDiEM25inlate2015withthegoalofreinvigorat-ingtheEUondemocraticprin-ciples,forfearthattheEU,initscurrentform,wasdestinedtobecomeasuperstategovernedbytechnocratswhospewoutedictsandaresupportedbytheTroika.
IfDiEM25,whoseadvis-orypanelincludesJulianAssange,economistJamesGal-braithandEnglishfilmdirectorKenLoach,picksupmomentum,Mr.
VaroufakisisnotrulingoutsendingDiEM25candidatestothepolls.
IaskhimwhytheEUshouldevenbepreserved.
WhynotscraptheBrusselsmachineandgobacktonation-statesunitedbynomorethanacommonmarket"BecausethegreatproblemswefacecannotberesolvedunlessweareunifiedasEuro-peans,"hesays.
"Climatechange,itcannotbedealtwithbyindi-vidualcountries,defence,espe-ciallyinthepost-Trumpianworld,therefugeecrisisandref-ugeeflows.
Theyallrequireaunitedresponse.
"Mr.
VaroufakisisnotrulingoutthedeathoftheEUandtheeurozonewithinit.
Iconsideritsomewhatironicthatheconsid-ersGermanChancellorAngelaMerkel,thewomanwhoinsistedoninflictingdeepausteritymea-suresonGreece,theEU'spoten-tialsaviour.
"AlotdependsonMerkel,"hesays.
"SheneedstodeliveraspeechofhopeforEurope,withanarrativeoffederalismwithaplanforaunitedEurope,withopenborders,onethatchalleng-estheideathatthereisarefu-geecrisis.
Thatwouldbeveryradicalforhertodo.
Butifshegaveaspeechofhope,therewouldbearemarkableturn-around.
"Andwiththat,Mr.
Varoufakisshookmyhand,grabbedhishel-metandroaredoffonhismotor-cycletohisnextbattle.
AGreekwarriorsetssightsonanewbattleYanisVaroufakiswonfamebutlosthiswaragainstGreece'sfinancialoverlords.
Nowhehasanewcause:savingEuropeERICREGULYEUROPEANBUREAUCHIEFATHENSFormerGreekfinanceministerYanisVaroufakisarrivestothecountry'sparliamentbuildinginAthensforacabinetmeetinginFebruary,2015.
Mr.
Varoufakiswaspivotalinthedraftingofmeasuresdesignedtoelicitabailoutforthecountry'sstrugglingeconomy.
KOSTASTSIRONIS/BLOOMBERGAnavidmotorcyclist,Mr.
VaroufakisarrivesatMaximosMansiontoattendameetingwithPrimeMinisterAlexisTsiprasinAthensinMay,2015.
KOSTASTSIRONIS/REUTERSI'mastaunchEuropeanistandIamparticularlyconcernedaboutthissituation.
GrilloandLePenwantdisintegration,luxuriateintheexpectationofit.
Me,I'mhorrifiedbyit…IfirmlybelievethatthedisintegrationofthisterribleEuropeanUnionwillleadtothepostmodern1930s.
YanisVaroufakisFormerGreekfinanceminister