Adults in the Room: My Battle with the European and American Deep Establishment by Yanis Varoufakis (2017) (read in 2018)

Published by marco on

Disclaimer: these are notes I took while reading this book. They include citations I found interesting or enlightening or particularly well-written. In some cases, I’ve pointed out which of these applies to which citation; in others, I have not. Any benefit you gain from reading these notes is purely incidental to the purpose they serve of reminding me what I once read. Please see Wikipedia for a summary if I’ve failed to provide one sufficient for your purposes. If my notes serve to trigger an interest in this book, then I’m happy for you.

As you can tell by the copious notes and citations I’ve made below, I loved this book. It is the story of how Europe is just as fundamentally broken as any other human construction. If it every meant anything greater, it no longer does. It is a construct of self-serving functionaries bent on consolidating their own political capital. Its main goal is to provide wealth to the financial sector. It does not care for its member nations, as such. It does not care for long-term sustainability. It is afflicted by the same blinkered, short-term thinking that poisons most other human endeavors. It continues mainly on inertia, in some sense unaware that it is already dead. The corpse can still pump blood, so the vampires continue to feed.

This is the story of the five months during which Greek finance minister Yanis Varoufakis tried to save Greece from continued debt bondage. Continued debt bondage was seen as the only way forward for the European troika. Varoufakis preferred a debt-restructuring that benefitted both parties and had the added benefit of being financially feasible. The only other alternative acknowledged by both sides was Grexit—Greece leaving the euro zone and reëstablishing the drachma.

Varoufakis threatened Grexit and vowed never to comply to continued debt bondage. His government was behind him in this, until…almost the very end. Despite reams of proposals and studies and endorsement from extremely knowledgable individuals showing that Varoufakis’s plans would be effective, the troika never seriously entertained them. Honestly, it’s hard to believe that they even read them. They just didn’t care. Their only goal was to arrange a new loan deal—because they were never interested in getting their money back.

How could this be? Because the money they were interested in getting back was loaned to Greece, immediately after which it was funneled right back to the true victims of Greece’s financial crisis—the French and German banks that had loaned money to Greece in the first place. These banks took no haircut on their risky loans. The EU made sure that they were paid back in full, but that the Greek government took the full blame for the profligacy.

The troika wasn’t interested in being paid back because, once the banks had recharged their coffers and learned the harsh lesson that they would not only not be allowed to fail, they would also not be allowed to not turn a profit, it was only the people of Europe who were left with outstanding debts.

And who cares about them when you and all of your friends have not only come out smelling like roses politically but also benefited handsomely financially? What could you do? It was those dirty, lazy Greeks who nearly ruined everything—thank God the troika came to the rescue to limit the losses and avoid true catastrophe.

Why did Varoufakis fail to save Greece from continued debt bondage? Because literally everyone was against him. They all hated him. It was obvious to the troika that he was never going to budge the way they wanted him to. They resented him for making them work that hard to get what they had always gotten much more easily.

They saw the result as inevitable; why bother struggling so hard and making everyone look bad? He was always going to look bad anyway, as the representative of a reprehensible land of swarthy, shiftless ingrates suckling at the teat of superior, northern, caucasian, European generosity.

His own side resented and grew to hate him because he was so much smarter and more organized and more well-informed than they were. He knew everything. He knew the history and the minutiae of everything that had happened in the EU in the last 20 years. He did not despair (at least not publicly). His ramrod discipline and dedication shamed his own leadership into continuing when they’d long-since capitulated in their hearts. His presence became a constant reminder to them of their own moral failing and their failure of the Greek people.

As for his enemies in the EU and the IMF and ECB and Euro Group? They were just stunned that he’d even dared to open his mouth at all—other than to pleasure them with it, as stipulated in their agreement with the previous government.

I imagine to them Varoufakis showed up like an escort whose pimp had extracted a very good price for someone who was accommodating and open to anything—only for her to show up and want to talk and cuddle and “get to know one another” so that they could “figure out how to both come to orgasm”.

The EU’s incredulity was like that of the john in such a situation—simply uncomprehending how someone could so completely fail to be on-script. After the initial confusion, the way forward was clear: punishment and humiliation and, of course, the f$%king. I apologize for the invective, but it is not just to spare the degree of criminality with which the EU behaved by employing a more diplomatic vernacular.

And the other nations that backed Germany unquestioningly in the Euro Group, like Latvia, were like the members of the pimp’s stable who had long since capitulated all honor—and were resentful of the uppity new broad who thought she was better than them. As Varoufakis points out, Latvia became the troika’s darling, an economic success story, by proving that a country could tighten its belt to improve its per-capita GDP—but only by shedding half of its working population through emigration.

When Varoufakis re-hired cleaning staff fired during a previous administration, he was reproached endlessly by the EU for not being sufficiently dedicated to cutting costs. The cost of 300 cleaners making a pittance per month was nothing compared to the salaries of several advisers from big banks and financial institutions that Yanis simultaneously let go, of course. But that’s not the point, is it? The troika were bent on punishing him for having fired its crony friends at Goldman Sachs (who’d earned millions per year). The initial firing of the cleaning staff was described as a “reform”, the rolling back of which indicates an abdication of adherence to fiduciary responsibility.

This was the modus operandi for the troika, always demanding more and more from an increasingly harried and chronically understaffed finance department. And if it took Yanis a long time to realize that his enemy truly was an enemy that was not at all interested in a compromise, it wasn’t his fault, really. In the heat of battle, and probably exhausted and sleep-deprived from having spent three straight days preparing a document they demanded and have now ignored, he failed to recognize their duplicitous nature.

He continued to give them the benefit of the doubt, assuming that they too saw the looming danger to everyone and were interested in working together to avoid the worst of it. They were not. Life had taught them all that they would be just fine, that they would continue to fail upward no matter what happened. I count nearly everyone he mentions in this book in this group—Lagarde, Poulson…everyone. Not a single one of them every did anything to actually help. No matter how much hand-wringing and soul-searching they play-acted behind closed doors, they always knew which side their bread was buttered on when it came to public pronouncements—and then they reverted to the most simplistic mantras that they all knew were ineffective and could not be implemented, but for which they could not be blamed for promoting.

They had all proved themselves liars and backstabbers, incapable of even a shred of honesty. Their paramount goal was to get everything they personally wanted while conceding nothing, on principle. He failed to notice that they considered it distasteful to deal with him at all. There was probably no small amount of disgust at the chutzpah of a filthy foreigner upstart daring to attend their institutions (he attended university in England in the 70s) and for daring to seem smarter and more reasonable than they, when it is they who wield the power and he who is to capitulate. Their fury was not at his proposals, but that he was wasting their time, making them pretend to do their jobs, while reminding them that they had always failed to do so. They punished him and Greece for daring to remove their mask of plausible deniability.

And when the time came to execute the only threat that Greece held over the troika, Yanis hesitated, convinced that his government had his back and that they would “take collective responsibility for the decision over the precise timing of [Greece’s] withdrawal from the negotiations.”

They did not. And that is his regret: that he did not take unilateral action at the solitary moment when he had the power to do so. He opted for democracy and was betrayed by his compatriots. I think he’s too hard on himself.

And his friends in the Greek government didn’t collapse all at once: no, the Troika had its agents embedded everywhere. Steter Tropfen hoehlt den Stein, as we say in German. They didn’t have to push too much—we’ve seen time and again how much human suffering a single person is willing to engender for what appears to be a ludicrously meager personal gain. How can you succeed when all your enemy need do is turn one functionary? And he probably sold out for a pittance? Even if it was blackmail, or the guy failed to grasp the import of his duplicity, he didn’t seem to care. An appeal to ego was probably sufficient.

As mentioned above, there are also the impossible time constraints imposed on these processes. Where the EU drags its feet for years on other issues, they pressed one of its member nations to make momentous decisions in days, if not hours. There were so many late-night and weekend meetings. As things came to a head, they would work all night. In one such meeting, Yanis and Alexis (the prime minister) were working on a bank official, “Alexis and I strove to shift him from [his viewpoint] with a mixture of logic and firmness. In the end, our pressure bore fruit.”

Well, of course it did: it was four in the morning. These are such momentous decisions being taken by people rendered provably incompetent by lack of sleep or respite from pressure. This is akin to torture. The tight deadlines are not coincidental.

Here he describes a moment when he realized that most of his government had already gone over to the other side.

“The mask was off. The cynicism was extraordinary. He had just told me, quite brazenly, that he was ready to work directly for the troika rather than sever his privileged links with the troika’s functionaries in my ministry. Not only this, he had openly admitted that he was already in cahoots with the troika’s primary ally, the governor of the Greek Central Bank, who had begun the bank run in the run-up to our election as part of their bid to keep us from office. I was aghast.”
Page 302

This is a veritable tsunami of opposition, all betraying their people, likely for paltry personal gain or simply ego-stroking.

And here, he describes his thinking about his old friend (and Prime Minister) Alexis.

“I would blame it on fear, depression and inexperience, relying eventually on sheer faith that the moment would come when he would bounce back, shake off the tentacles, reactivate his belief in our cause and honour the magnificent words with which he inspired me that first day at Maximos.”
Page 303

Such is the nature of a politician. Alexis probably doesn’t even remember what he said, having uttered the words purely out of instinct, knowing only their placatory effects. And Yanis heard only what he wanted to hear, replacing pragmatism with optimism in the face of overwhelming odds.

During the final negotiations, when Greece had secured a deal with China to “prove” that there were countries willing to invest, Varoufakis learned that the troika had undermined that as well.

“The next day Alexis relayed the news from Beijing. Someone had apparently called Beijing from Berlin with a blunt message: stay out of any deals with the Greeks until we are finished with them.”
Page 321

So like the mafia. So duplicitous. So evil. No concern at all for the lives hanging in the balance. Just concerned about winning.

Once the screws had turned, the EU could only suggest further cuts—again, not caring at all what that would mean for the people of one of its member nations who’d already suffered more austerity and cuts than any other nation in recorded history.

“‘Independently of our preferences and political will,’ I said, ‘our liquidity will run out well before then [April 30th].’ He replied that we could last much longer by plundering the reserves of non-governmental but publicly owned institutions such as pension funds, universities, utility companies and local authorities.”
Page 327

They’re just relentless and inhuman. Bent on destruction at all costs. More precisely: not recognizing costs that come at the expense of non-people, where a “person” is defined as “someone who has influence over my career, my power base, my wealth, or that of anyone who does have such power over me.” Without direct or transitive personally positive effect, there is no incentive to act. Morality certainly won’t enter into it.

Likewise, Jeff Sachs had a rude awakening.

“Jeff tried valiantly one more time. ‘Mario,’ he said, ‘I have been listening to this discussion and I must tell you that I am concerned. Yanis has been trying to propose a practical solution to a simple-to-solve problem. You rejected that solution, which is fair enough if there are technical problems, but I have not heard from you any alternative solutions.’ Mario shrugged his shoulders. ‘It is not for the central bank to offer such solutions. This is a matter for the politicians.’ ‘Just wait and see what the politicians do when I raise the subject with them,’ I said to Jeff as we were leaving. ‘They will refer me to back to the ECB, possibly to Poul Thomsen.’ Jeff shook his head in disbelief.”
Page 333

At long last: have you no shame? Categorically, no.

There were those who were convinced that it wasn’t even worth trying in the first place.

“Some, especially those under the control of the Left Platform, refused point-blank to cooperate on the grounds that the whole exercise was a charade. That was a fair point, but for better or worse our government’s policy was to cooperate fully within the framework of my agreement with Pierre Moscovici and within the spirit of the 20 February Eurogroup agreement, which committed us to doing our utmost to establish common ground with the creditors.”
Page 342

They were 100% right, though. It was a tremendous and deliberate waste of time and capital. Varoufakis had to try, of course. He had to try for that less-than-1% chance that the troika weren’t what they appeared to be, weren’t what they’d proven themselves time and again to be. In hindsight, though, they should have just pulled the ripcord early and given the EU a double middle-finger as they were all pulled over the abyss.

And then, describing the end of a meeting with Obama, who’d made some placatory mouth-movements.

“Another warm handshake, another friendly smile and he was gone.”
Page 376

Obama, as ever, full of false assurances, feigned agreement and zero support for anyone or anything that doesn’t support his ego-myth. Even when talking to someone in dire straits, he talks of his own capitulation, encouraging their own (“we all float down here…”). Is he evil or stupid? He doesn’t get the luxury of being considered stupid.

Varoufakis was indefatigable, always to some degree still-optimistic.

“We had to work on two fronts: compile our own comprehensive anti-MoU Plan for Greece while convincing Alexis to send an envoy to Berlin with the message Lee had scripted for us. It was the only way. But was it one that my exhausted comrade at Maximos would countenance?”
Page 380

Yanis, you’re drowning and you don’t recognize it. Your party won’t help you. Everyone’s pretending to cooperate. In the face of this, you redouble your efforts, fighting on two simultaneous fronts, exhausted, and nearly alone. I, of course, respect him immensely for making them show their true colors, for having given them every opportunity not to be assholes. I also have newfound respect for Jeff Sachs for sticking by you. He’s clearly one of the good ones.

“The words of caution that Jeff Sachs had once shared with me rang true: ‘These people lie. Don’t trust them.’ Still I could hardly believe that Poul could have been so blatant.”
Page 419

I guess Yanis’s honesty is refreshing, but his naiveté is disheartening.

Highly recommended.

Citations

“For all who eagerly seek compromise but would rather be crushed than end up compromised.”
Page v
“So, in order to be as fair and impartial as possible, I have tried to see their actions and my own through the lens of an authentic ancient Greek or Shakespearean tragedy in which characters, neither good nor bad, are overtaken by the unintended consequences of their conception of what they ought to do. I suspect that I have come closer to succeeding in this task in the case of those people whom I found fascinating and rather less so in the case of those whose banality numbed my senses. For this I find it hard to apologize, not least because to present them otherwise would be to diminish the historical accuracy of this account.”
Page 4
“When a large-scale crisis hits, it is tempting to attribute it to a conspiracy between the powerful. Images spring to mind of smoke-filled rooms with cunning men (and the occasional woman) plotting how to profit at the expense of the common good and the weak. These images are, however, delusions. If our sharply diminished circumstances can be blamed on a conspiracy, then it is one whose members do not even know that they are part of it. That which feels to many like a conspiracy of the powerful is simply the emergent property of any network of super black boxes.”
Page 11

Here I feel he’s being overly generous, but he may have a point. The petty interests seem to align for the same result as if there had been a conspiracy.

“The result is a network of power within other pre-existing networks, involving participants who conspire de facto without being conscious conspirators.”
Page 12

Do not attribute to malice what can be explained by a confluence of many petty self-interests

“Once caught in this web of power it takes an heroic disposition to turn whistle-blower, especially when one cannot hear oneself think amid the cacophony of so much money-making. And those few who do break ranks end up like shooting stars, quickly forgotten by a distracted world.”
Page 12
“The reason why my signature mattered so much was that, curiously, it is not presidents or prime ministers of fallen countries that sign bailout loan agreements with the IMF or with the European Union. That poisoned privilege falls to the hapless finance minister. It is why it was crucial to Greece’s creditors that I be bent to their will, that I should be co-opted or, failing that, crushed and replaced by a more pliant successor. Had I signed, another outsider would have turned insider and praise would have been heaped upon me. The torrent of foul adjectives directed at me by the international press, arriving right on cue only a little more than a week after that Washington visit, just as the US official had warned me it would, would never have descended onto my head. I would have been ‘responsible’, a ‘trustworthy partner’, a ‘reformed maverick’ who had put his nation’s interests above his ‘narcissism’.”
Page 14
“For capitalism to advance in the nineteenth century, the absurd notion that all debts are sacred had to be ditched and replaced with the notion of limited liability. After all, if all debts are guaranteed, why should lenders lend responsibly? And why should some debts carry a higher interest rate than other debts, reflecting the higher risk of going bad?”
Page 19
“It’s not hard to imagine the panic enveloping President Sarkozy of France and his finance minister, Christine Lagarde, as they realized that they might have to conjure up €562 billion from thin air. And it’s not difficult to picture the angst of one of Lagarde’s predecessors in France’s finance ministry, the notorious Dominic Strauss-Kahn, who was then managing director of the IMF and intent on using that position to launch his campaign for France’s presidency in two years’ time. France’s top officials knew that Greece’s bankruptcy would force the French state to borrow six times its total annual tax revenues just to hand it over to three idiotic banks.”
Page 24
“After a few weeks they figured out their fib: they would portray the second bailout of their banks as an act of solidarity with the profligate and lazy Greeks, who while unworthy and intolerable were still members of the European family and would therefore have to be rescued. Conveniently, this necessitated providing them with a further gargantuan loan with which to pay off their French and German creditors, the failing banks.”
Page 26
“In my book The Global Minotaur, which I was writing in 2010 while Greece was imploding, I argued that free-market capitalist ideology expired in 2008, seventeen years after communism kicked the bucket. Before 2008 free-market enthusiasts portrayed capitalism as a Darwinian jungle that selects for success among heroic entrepreneurs. But in the aftermath of the 2008 financial collapse, the Darwinian natural selection process was stood on its head: the more insolvent a banker was, especially in Europe, the greater his chances of appropriating large chunks of income from everyone else: from the hard-working, the innovative, the poor and of course the politically powerless. Bankruptocracy is the name I gave to this novel regime.”
Page 28
“Was Greek’s unholy treatment a conspiracy? If so, it was one without conscious conspirators, at least at the outset. Christine Lagarde and her ilk never set out to found Europe’s bankruptocracy. When the French banks faced certain death, what choice did she have as France’s finance minister, alongside her European counterparts and the IMF, but to do whatever it took to save them – even if this entailed lying to nineteen European parliaments at once about the purpose of the Greek loans? But having lied once and on such a grand scale, they were soon forced to compound the deceit in an attempt to hide it beneath fresh layers of subterfuge. Coming clean would have been professional suicide. Before they knew it, bankruptocracy had enveloped them too, just as surely as it had enveloped Europe’s outsiders.”
Page 29
“To illustrate the point, in 2015 the British Treasury repaid a bond issued during the South Sea Bubble crisis of the 1720s.”
Page 500
“Not being a natural-born politician, I would respond with a line by John Kenneth Galbraith: ‘There are times in politics when you must be on the right side and lose.’ Little did I know how prophetic that would prove.”
Page 32
“In 2010, for every $100 of income a Greek made, the state owed €146 to foreign banks. A year later, every €100 of income earned in 2010 had shrunk to €91 before shrinking again to €79 by 2012. Meanwhile, as the official loans from European taxpayers came in before being funnelled to France and Germany’s banks, the equivalent government debt rose from €146 in 2010 to €156 in 2011. Even if God and all the angels were to invade the soul of every Greek tax evader, turning us into a nation of parsimonious Presbyterian Scots, our incomes were too low and our debts too high to reverse the bankruptcy. Investors understood this and wouldn’t touch a Greek investment project with a bargepole.”
Page 37
“Once I was there, with the international Left in permanent disarray, US libertarians and UK free marketeers were among my most effective supporters. Interestingly, their ideological, quasi-Darwinian commitment to letting the market’s losers perish was pushing them towards my side. Mindful of the dangers of too much credit, their dictum that ‘To every irresponsible borrower there corresponds an irresponsible lender’ led them to the conclusion that bad loans should burden irresponsible lenders, not taxpayers.”
Page 37
“Banks restructure the debt of stressed corporations every day, not out of philanthropy but out of enlightened self-interest. But the problem was that, now that we had accepted the EU–IMF bailout, we were no longer dealing with banks but with politicians who had lied to their parliaments to convince them to relieve the banks of Greece’s debt and take it on themselves.”
Page 38
“Austerity is an awful economic policy that, as explained previously, is guaranteed to fail in bad times. But austerity is not really an economic policy at all. Austerity is a morality play pressed into the service of legitimizing cynical wealth transfers from the have-nots to the haves during times of crisis, in which debtors are sinners who must be made to pay for their misdeeds.”
Page 40
“President Sarkozy and Chancellor Merkel resigned themselves to the idea of Greek debt restructuring on condition that it would burn only those creditors who were incapable of harming them much. By the summer of 2011, it was decided: the haircut would mainly hit Greek pension funds, Greek semi-public institutions and Greek savers who had bought government bonds, while the loans provided by the IMF and the European institutions in 2010 would of course remain inviolable.”
Page 41
“Glossy prospectuses, featuring everything from the nation’s ports and railways to pristine beaches and small islands, invited potential buyers to make an offer. The family silver was for sale, and the proceeds were to be collected by Greece’s foreign creditors through local appointees.”
Page 47
“In Bailoutistan 2.0 privatizations meant something else: selling public assets for small change, as the economic depression had sent prices through the floor, with the proceeds thrown into the bottomless pit of Greece’s unpayable public debt.”
Page 502
“That a European country embedded in the continent’s great common currency experiment would end up being pushed around like a banana republic is a devastating indictment of a union supposedly founded on the promise of shared prosperity and mutual respect.”
Page 48
“Of course Europe’s establishment had willed none of this. Before 2008 the elites in Berlin, Brussels, Paris and Frankfurt had believed their own rhetoric, as had those in the United States and the City of London: capitalism had delivered the Great Moderation; boom and bust was a thing of the past; banks had found a magical way to produce ‘riskless risk’and were self-regulating marvellously. Those in authority believed that history had ended, and their job was one of micro-management, of nudging a magnificent self-guided, self-managing system in a broadly predetermined, rational direction.”
Page 48
“The triangle of sin was complete: the insolvent media were kept in a zombified condition by the zombie banks, which were maintained in their undead condition by a bankrupt government, itself preserved in a condition of permanent bankruptcy by the EU and the IMF’s bailout loans.”
Page 55
“I agreed that we would be better off if we had never entered the eurozone but hastened to add that it was one thing to have stayed out of the euro and quite another to leave it. Exiting would not get us to where we would have been had we not entered!”
Page 58
“Taken together, these two debt restructuring exercises would signal a new era: the EU and the IMF would no longer operate like a pre-Christmas Ebenezer Scrooge. Rather, they would become Greece’s partners in promoting its economic recovery, without which their bailout loans would be haircut savagely anyway.”
Page 65
“could – so much so that the swingeing austerity introduced”
Page 72
“didn’t believe in technocrats being parachuted into a political process. In truth I still had fundamental concerns. Negotiating on a country’s behalf requires a democratic mandate. The Modest Proposal represented my personal convictions, and I had no desire to legitimize the de-politicization of economic policy, that most political of realms.”
Page 85
“The Thessaloniki Programme, as Alexis’s speech was labelled, was well meaning but incoherent and definitely inconsistent with the Five-Pronged Strategy, which Alexis and Pappas had supposedly endorsed. It promised wage rises, subsidies, benefits and investment paid for with sources of funding which were either imaginary or illegal.”
Page 88
“I explained that I thought the private sector should pay more in total tax revenue, but the only way to achieve an overall increase in their contribution at a time of next to no sales and with bankrupt banks unable to provide credit even to profitable firms was to reduce the corporate tax rate.”
Page 100
“I replied that unless we were prepared to turn the banks over to the European Union, we would not be able to unburden the Greek state of the liabilities incurred by their fake recapitalization. Bank nationalization would only make sense in the event of Grexit.”
Page 101
“‘Debt restructuring comes first. Second, a primary surplus of no more than 1.5 per cent of national income and no new austerity measures. Third, wide-ranging reductions in sales and business tax rates. Fourth, strategic privatizations under conditions that preserve labour rights and boost investment. Fifth, the creation of a development bank that would use remaining public assets as collateral to generate a domestic investment drive, and whose dividends would be channelled into public pension funds. Sixth, a policy of transferring bank shares and management to the European Union while creating a public “bad bank” to deal with the banks’ non-performing loans, so as to prevent evictions and the mass expropriation of small business by vulture funds.’”
Page 102
“I confirmed that that was exactly my point: there was no point entering into a tough negotiation with the world’s most powerful credit institutions unless we were after a viable agreement within the euro, did nothing to jeopardize such an agreement, but were also clear in our minds that between surrender to a renewed sentence in debtors’ prison and Grexit we preferred the latter.”
Page 102
“‘But what happens if you do not get elected?’ Alexis insisted. ‘Then the people will have said that they do not want me to represent them in the Eurogroup. Simple! The idea of technocrats negotiating economic treaties on behalf of the ignorant masses is repugnant to me and deserves to be buried.’”
Page 104
“recalled an old joke: two golfers exchange their life stories as they move from one hole to the next. The first one confesses that he made his fortune when his ailing factory burned down and he was able to claim the insurance. The second golfer then confesses that he also made it big when his own business was destroyed by a flood, netting him a nice cheque from the insurance company. The first golfer looks puzzled. ‘But how did you start the flood?’ he asks.”
Page 107
“Do you possess no thin red line of your own? If you don’t, does this not mean that you are relying on the kindness, and wisdom, of the creditors? Does it not also rely on them caring about Greece, rather than using Greece’s crisis as collateral damage in their tussle against Paris, Rome and Madrid. Please tell the voters and let them decide which policy is most dangerous and least dignified. Yours or ours?”
Page 513
“In a rational Europe this absurd debt would simply be written off. Alas, the ECB’s charter does not allow for this. To accommodate the ECB’s charter, I took a leaf from the British Treasury’s book. The British government had long practised the issue of open-ended, or perpetual, bonds. These yield interest, but the government may repay the principal at a time of its choosing, if ever. Indeed, perpetual bonds issued at the time of the South Sea Bubble in the 1720s and by Neville Chamberlain and Winston Churchill during and just after the Great War were only repaid by the British Treasury in late 2014 and early 2015.”
Page 114
“They signalled to the public and to potential investors that the EU was accepting a new role: no longer the harsh creditor of an insolvent state, it would become a partner in Greece’s growth, as its own returns would be proportional to Greek nominal income growth. They would have been enough to cause an influx of investment into an investment-starved Greece. They would have ended the Greek recession with winners all round, the only exceptions being the cockroaches that flourish in the filth caused by prolonged misery.”
Page 114
“However, not for a moment did I believe, back then in January 2015, that the unquestionable logic and obvious moderation of my proposals would win our creditors over. As I had been telling Alexis since 2012, any proposal from us that contradicted the troika’s Greek programme would be met with naked aggression and the threat of shuttered banks. Logic hardly mattered. Mutual economic advantage was irrelevant. The creditors did not want their money back. What mattered to them was their authority, and that was being challenged by a leftist government whose success at negotiating a new deal for its country was the creditors’ greatest nightmare, as it might give ideas to other Europeans labouring under the same crisis and the same irrational policies.”
Page 115
“As well as creating the Hellenic Financial Stability Facility (HFSF), which after 2012 held the banks’ majority shareholdings on behalf of the state, and a privatization unit whose job was to conduct fire sales of Greece’s public assets, both of which answered not to the Greek people but to the troika, the jurisdiction of the tax office had also been co-opted by our creditors – specifically, to the Eurogroup Working Group, presided over by Thomas Wieser. By scooping out these three crucial chunks of the Ministry of Finance and placing them beyond the reach of Greece’s democratic process, they had effectively turned the ministry into something resembling a Swiss cheese.”
Page 163
“On paper Roubatis seemed well qualified to head an intelligence service better known for US-sponsored subversion of Greek democrats and leftists than for defending Greece from foreign foes: as a young man he had written a doctoral thesis at Johns Hopkins University that exposed the infiltration of the Greek government by the CIA, and the government he served in the 1980s did a great deal to sever the link between foreign agencies and Greek spooks.”
Page 164
“‘It is a sad day for Europe when the Eurogroup president presents a freshly elected finance minister with an impossible ultimatum,’ I said. ‘We were not elected to clash with the Eurogroup, and I am not interested in clashing with you. But nor were we elected to abdicate during our first week in office by espousing an impossible programme that we came in with a mandate to renegotiate.’”
Page 169
“1953 the US government brokered the so-called London Debt Agreement. In essence, the United States leaned on Britain, France, Greece, Italy, Spain, Sweden, Yugoslavia, Norway, Switzerland and many other countries to write off the greatest part of Germany’s pre-war debt to them. The British government protested, arguing that Germany had both the capacity and the moral duty to pay. Washington vetoed London and, to lead by example, immediately wrote off the loans that it had forwarded to Bonn after 1945. Germany’s debts to nations and private creditors were haircut by more than 70 per cent.”
Page 519
“‘We are going to destroy the basis upon which they have built for decade after decade a system, a network that viciously sucks the energy and the economic power from everybody else in society.’”
Page 172
“For years I had recited to my students Adam Smith’s famous lines ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.’22 Similarly, it would be a waste of breath to appeal to the creditors’ humanity, to claim that Greece had been unfairly treated or to invoke some moral right to debt relief. These people knew perfectly well how the Greeks had been treated and they cared not one bit. My task was to win a war not a debating society argument. To do so I had to address myself to the creditors’ own advantages.”
Page 177
“The only colleague that I trusted to understand fully and support my debt-restructuring proposals was Euclid. As a Syriza insider, he could present my proposals to the party faithful for what they were: a shrewd strategy for getting Greece the debt relief it needed without putting Chancellor Merkel in a politically impossible situation.”
Page 178
“No one owes us a living. But no one has the right either to hold us in debtors’ prison in perpetuity, preventing us from earning our keep.”
Page 180
“Moscovici was given the job, but a new position, vice president of the European Commission, was invented to oversee him. To add insult to injury, Berlin gave this new post to the former prime minister of Latvia, whose greatest claim to fame was the imposition of austerity measures”
Page 182
“This conundrum was solved in a manner that anyone in Pierre Moscovici’s place would have found demeaning: Moscovici was given the job, but a new position, vice president of the European Commission, was invented to oversee him. To add insult to injury, Berlin gave this new post to the former prime minister of Latvia, whose greatest claim to fame was the imposition of austerity measures so harsh that they ‘solved’ his country’s economic crisis by causing half the population to emigrate.”
Page 182
“The notion of ‘Bankruptocracy’ in Varoufakis, 2011, is relevant: a regime in which bankrupt banks rule based on the principle that the greater one’s losses, the greater one’s power to extract rents from the rest of society.”
Page 520
“‘Having to borrow now from EU taxpayers to pay the ECB for bonds that it should not have purchased in the first place is ridiculous to say the least,’”
Page 186
“if the ECB didn’t do what was necessary to end a bank run of its own making, if it didn’t extend to us the helping hand we needed in order to conduct our negotiations, many would see it as political intervention by the ECB – one set of standards for the Samaras government, another for ours.”
Page 187
“I shared my own sense of the dilemma: ‘I find myself in the peculiar situation of constantly proposing policies for shoring up a currency whose design and creation I had opposed. But I do believe that even those of us most critical of the euro have a moral and a political duty to try to fix it, simply because its disintegration will cause so much human pain.’”
Page 193
“trick. London-based financiers, Tory politicians, influential journalists and former members of the IMF all appeared to see my point. Yes, we were a left-wing government, but all we were asking was for some basic common sense to prevail at the centre of European power.”
Page 197
“Of course it made perfect sense: swapping outstanding debt for growth-linked bonds accompanied by a crackdown on tax evasion and moderate budget surpluses was more a libertarian’s cup of tea than a left-winger’s. As I had remarked to the City’s financiers the previous day, it was a measure of the depth of the euro crisis that it took a radical left-wing government to table mainstream liberal proposals for its solution.”
Page 198
“The problem was that this temporary fix had become permanent as a result of our collective failure to deal with the underlying insolvency. ‘Surely our task now is to end the death embrace, the doom loop, between insolvent banks – that the ECB is forced to keep afloat against its rules – and an insolvent state at which Europe’s taxpayers keep throwing good money after bad?’ Peter Praet and Sabine Lautenschläger, sitting on Mario’s left, looked aghast, not because what I was saying was preposterous but – I am convinced – because it was very close to their own criticism of the Greek bailouts and the ECB’s role in them.”
Page 204
“‘I appreciate you going through all sorts of interesting channels to find me and inform me in person, Mario,’ I said. ‘Since you are giving me the opportunity to respond in person on the telephone, allow me to say that this decision – the withdrawal of the waiver a day after I single-handedly lifted the banks’ shares and reversed the bank run, a week after our election, indeed a week before my first Eurogroup meeting, and three whole weeks before the expiry of the programme extension – can only be interpreted as a hostile, deeply political move by the ECB against my government.’”
Page 207
“On the way to the federal finance ministry I noticed two emails had arrived on my phone. One was from Jamie Galbraith informing me that Bernie Sanders was about to write to Janet Yellen, the US Federal Reserve chair, to ask her to indicate to the ECB that its behaviour had been appalling and ultimately globally destabilizing.”
Page 209
“minister. Before getting into the lift, he asked me playfully, but with enough of a hint of aggression to establish that he was not actually joking, ‘When am I getting my money back?’ I was tempted to reply, ‘When you persuade Deutsche Bank to return it to you.’ I said nothing, smiling widely, my mind on the main game.”
Page 210
“Second was the topic he chose to turn to instead: his theory that the ‘overgenerous’ European social model was no longer sustainable and had to be ditched. Comparing the costs to Europe of maintaining welfare states with the situation in places like India and China, where no social safety net exists at all, he argued that Europe was losing competitiveness and would stagnate unless social benefits were curtailed en masse. It was as if he was telling me that a start had to be made somewhere and that that somewhere might as well be Greece.”
Page 211

Here he’s talking about that German asshole Schaüble.

“I feel that the German nation is the one that can understand us better than anyone else. No one understands better than the people of this land how a severely depressed economy combined with ritual national humiliation and unending hopelessness can hatch the serpent’s egg within one’s society. When I return to Athens tonight, I shall find myself in a parliament in which the third-largest party is a Nazi one.”
Page 215
“‘the whole point is to forge new motives. To fashion a fresh mindset that transcends national divides, dissolves the creditor–debtor distinction in favour of a pan-European perspective, and places the common European good above petty politics, dogma that proves toxic if universalized, and an us-versus-them mindset.’”
Page 223
“I began by confessing to the ambassador that I had never aspired to be a minister. Yes, I was happy to be doing the job, I told him, but only out of my sense of duty to a nation in debt bondage, a duty whose sole purpose was to rewrite the terms of our contract with the EU and the IMF, so as to turn it from a predatory relationship into a workable and equitable one. So accepting the current parameters of that contract was simply not an option. Here again the ambassador interjected, this time with a vague, implicit but perfectly recognizable threat. Out of respect for the people who had appointed me to my office, I felt obliged to cut him short.”
Page 225
“then suggested that the failure of previous governments to rescue Greece from its plight was due to their acceptance ‘of impossible conditions they could never carry out, even if they had intended to – an acceptance which made successive Greek governments almost as guilty in accepting what they could not fulfil as the creditors were in imposing what they were not entitled to exact’.”
Page 226
“to rescue Greece from its plight was due to their acceptance ‘of impossible conditions they could never carry out, even if they had intended to – an acceptance which made successive Greek governments almost as guilty in accepting what they could not fulfil as the creditors were in imposing what they were not entitled to exact’.”
Page 226
“I then suggested that the failure of previous governments to rescue Greece from its plight was due to their acceptance ‘of impossible conditions they could never carry out, even if they had intended to – an acceptance which made successive Greek governments almost as guilty in accepting what they could not fulfil as the creditors were in imposing what they were not entitled to exact’.”
Page 226
“If you cannot imagine walking out of a negotiation, you should never enter it. If you cannot fathom the idea of an impasse you might as well confine yourself to the role of a supplicant who implores the despot to grant him several privileges but who accepts in the final analysis whatever the despot grants.”
Page 227
“But, I concluded, an agreement requires compromise on both sides. Many of the measures in the MoU list were unproblematic and could be implemented without any of the sacrifices that we rejected as unacceptable. Indeed, some of the measures, such as the idea of a minimum guaranteed income, were to be desired.”
Page 229
“Such evidence included the rehiring of the cleaners who had been dismissed from the Finance Ministry illegally (according to the Greek courts) as well as a few hundred state school janitors, and a pledge not to reduce pensions beyond the twelve separate cuts that had already reduced them by a stupendous 40 per cent.”
Page 522

These were described as “reforms”, the rolling back of which indicates an abdication of adherence to fiduciary responsibility.

“To think of the illegal firing of a cleaner as a reform, and her rehiring as evidence that reforms were being rolled back was unhelpful if not absurd.”
Page 234
“As he spoke, Schäuble directed a piercing look at Sapin. ‘Elections cannot be allowed to change economic policy,’ he began. Greece had obligations that could not be reconsidered until the Greek programme had been completed, as per the agreements between my predecessors and the troika. The fact that the Greek programme could not be completed was apparently of no concern to him. What startled me more than Wolfgang Schäuble’s belief that elections are irrelevant was his total lack of compunction in admitting to this view.”
Page 237
“Democracy is not a luxury to be afforded to the creditors and denied to the debtors. Indeed, it is the lack of due democratic process in the heart of our monetary union that is perpetuating the euro crisis. Then again, I might be wrong. Colleagues, if you think that I am wrong, if you agree with Wolfgang, then I invite you to say so explicitly by proposing that elections should be suspended in countries like Greece until the country’s programme is completed. What is the point of spending money on elections and asking our people to get all fired up to elect governments that will have no capacity to change anything?”
Page 238
“‘I cannot accept this,’ Jeroen said. ‘The term “humanitarian crisis” is too political!’ ‘There is nothing more political, Jeroen,’ I snapped back, ‘than the attempt to overlook a humanitarian crisis because it would be too political to acknowledge it.’”
Page 241
“Jeroen approached to tell me that it was not normal for a minister to call their prime minister while in a Eurogroup meeting. I replied that it was not normal to force a minister to make an on-the-spot decision that could lead to the instant closure of his country’s banking system”
Page 243
“My message to you is that this is a government interested only in Greece’s recovery within a policy framework that is therapeutic for the eurozone as a whole. This is not going to be another government that tries to fool you into believing that we shall adopt a certain reform programme just in order to get the next loan tranche. You may have gathered that we do not give a damn about the next loan tranche. We prefer to go down in flames than to keep extending this indignity.”
Page 252
“That same weekend Jeff Sachs was hard at work on the other side of the Atlantic, trying to convince the Fed to weigh in on our behalf and persuade the ECB to abandon its ongoing asphyxiation strategy. His message to Janet Yellen was simple: the new Greek government’s programme of reforms and fiscal targets was reasonable; they understood well that Grexit was an exceptionally dangerous path, one that would not be taken at their instigation but only under duress from the ECB; Yellen ought to tell the Europeans not to risk destabilizing the world economy over a few billion dollars and to advise Draghi to desist from introducing capital controls that would solve nothing.”
Page 256
“Bill Black, the American economist who had campaigned so effectively against Wall Street, came to my defence. So why does the BBC treat Varoufakis as a sexy leftist and Dijsselbloem as the respected spokesperson for the troika even though Dijsselbloem is a fanatic ideologue who has caused massive human misery because of the intersection of his inflexible ideology and economic incompetence?”
Page 256
“The troika, by contrast, is led entirely by ideologues. The primary difference is that they are exceptionally bad economists and exceptionally indifferent to the human misery they inflict on the workers of the periphery that they despise and ridicule.”
Page 256
“The European Commission is the closest the EU has to a government, and a commissioner has a status equivalent to a minister of state, whereas the Eurogroup, as previously mentioned, has no legal standing in any of the EU treaties. In that sense, Dijsselbloem was, officially and legally, no more than the Dutch finance minister, outranked in law by Moscovici.”
Page 525
“Listening to him express views in the meeting that were subservient to Schäuble and Dijsselbloem, views that I knew perfectly well he did not agree with, I was hearing the sound of the EU’s descent into ignominy. His humiliation was emblematic to me of the complete subjugation of the European Commission to forces lacking legal standing or democratic legitimacy.”
Page 262
“We are ready and willing to do whatever it takes to reach an honourable agreement over the next two days. Our government will accept all the conditions that it can deliver upon and which do not reinforce our society’s crisis. No one has the right to work towards an impasse, especially one that is mutually detrimental to the people of Europe.”
Page 265
“Even at the best of times, twenty-four hours often prove insufficient to deal with the tsunami of problems that rise through the bureaucracy each day to land in a finance minister’s in-box. Imagine the difficulty of running the finance ministry of a bankrupt country in the midst of an all-consuming negotiation such as ours.”
Page 267
“I proposed we interpret their request in a nuanced way: a corporation can ‘recognize’ a debt to its bankers while still seeking deep debt restructuring to help it recover from a crisis that threatens to ruin both its shareholders and the bank. Similarly, we could ‘recognize’ Greece’s public debt while at the same time insisting that it be immediately restructured so that the creditors could get more of their money”
Page 269
“The more likely scenario, however, was that the extension was a tactical ploy: by delaying any outcome they were simply waiting for the depletion of both our current popularity and our small liquidity reserves so that by the time the extension expired in June they could be sure of our exhausted government’s total capitulation. If the latter was indeed the case then, I argued, our best strategy would be to request the extension while at the same time signalling to the troika that any attempt to wear us down through a tightening of the liquidity noose would be met with a refusal to make the forthcoming repayments to the IMF; that any effort to push us back into the straitjacket of its failed programme or to deny us debt restructuring would be met with a cessation of negotiations; and that any threat of closing down our banks and imposing capital controls would be met with unilateral haircuts of the ECB’s SMP bonds,”
Page 270
“I am often asked whether I thought there was ever a serious probability of successfully navigating those treacherous waters to a new deal for Greece within the eurozone. I answer that the actual probability was neither computable nor important. We had to give our creditors the chance to come to the table with humane, logical ideas, and the opportunity to listen to ours. It was always going to be a long shot, but our mandate from the people of Greece was to do our utmost to secure a sustainable future within the eurozone.”
Page 278
“It is remarkable that a minister of state had to negotiate for the right to introduce a clause into an agreement with international creditors stating that the courts of the land should be allowed to carry out the duties vested in them by the constitution.”
Page 526
“It was a tough call. But I should have made it.”
Page 290

In the heat if battle, and probably exhausted and sleep-deprived from having spent three straight days preparing a document they demanded and have now ignored, he failed to recognize their duplicitous nature. All of them had proved themselves liars and backstabbers, incapable of even a shred of honesty. Their paramount goal was to get everything they personally wanted while conceding nothing, on principle. He failed to notice that they considered it distasteful to deal with him at all. Probably no small amount of disgust at the chutzpah of a filthy foreigner upstart daring to attend their institutions and for daring to seem smarter and more reasonable than they, when it is they who wield the power and he who is to capitulate. Their fury was not at his proposals, but that he was wasting their time, making them pretend to do their jobs, while reminding them that they had always failed to do so. They punished him and Greece for daring to remove their mask of plausible deniability.

“The government, united and steeled by the creditors’ connivance, would, and should, take collective responsibility for the decision over the precise timing of our withdrawal from the negotiations.”
Page 291

They did not. And that is his regret: that he did not take unilateral action at the solitary moment when he had the power to do so. He opted for democracy and was betrayed by his compatriots. I think he’s too hard on himself.

“It was late in the afternoon when the reply came. Wieser’s office informed mine that the email of 21 February with all relevant information regarding the extension request process had been sent to five Greek officials: Chouliarakis, in his capacity as my Eurogroup deputy and Eurogroup Working Group representative; Dragasakis (deputy prime minister); Stournaras, as governor of the Bank of Greece; the head of my ministry’s public debt management authority; and the head of the banks’ bailout fund, the HFSF. I asked to see the email. It was there in black and white: dated 21 February, it was indeed addressed to those five people. I was flabbergasted. My accusation that Brussels had set the deadline retrospectively had been conclusively refuted.”
Page 295

Stabbed in the back. The machinations are not unlike those in Mr. Robot. Just giant machines grinding inexorably on.

“‘How can such an email get lost in your in-box, George?’ I asked, barely able to believe what I had heard. Just as he had two days earlier when I had confronted him with Costello’s creation of the Word file, Chouliarakis reacted as if he had nothing to be apologetic about, as if nothing much had happened.”
Page 296

How can you succeed when all your enemy need do is turn one functionary? And he probably sold out for a pittance? Even if it was blackmail, or the guy failed to grasp the import of his duplicity, he didn’t seem to care. An appeal to ego was probably sufficient.

“He remained in that state for some time, during which Alexis and I strove to shift him from it with a mixture of logic and firmness. In the end, our pressure bore fruit.”
Page 300

At four in the morning. Such momentous decisions being taken by people rendered provably incompetent by lack of sleep or respite from pressure. This is akin to torture. The tight deadlines are not coincidental.

“The mask was off. The cynicism was extraordinary. He had just told me, quite brazenly, that he was ready to work directly for the troika rather than sever his privileged links with the troika’s functionaries in my ministry. Not only this, he had openly admitted that he was already in cahoots with the troika’s primary ally, the governor of the Greek Central Bank, who had begun the bank run in the run-up to our election as part of their bid to keep us from office. I was aghast.”
Page 302

This is a veritable tsunami of opposition, all betraying their people, likely for paltry personal gain or simply ego-stroking.

“I would blame it on fear, depression and inexperience, relying eventually on sheer faith that the moment would come when he would bounce back, shake off the tentacles, reactivate his belief in our cause and honour the magnificent words with which he inspired me that first day at Maximos.”
Page 303

Such is the nature of a politician. Alexis probably doesn’t even remember what he said, having uttered the words purely out of instinct, knowing only their placatory effects. And Yanis heard only what he wanted to hear, replacing pragmatism with optimism in the face of overwhelming odds.

“I understood perfectly why the troika wished to get me and Nicholas out of the way. In contrast to Chouliarakis, Nicholas understood the econometric models the troika used for its fiscal predictions better than Wieser and the others did, knew what their weak points were, and was determined to oppose the Eurogroup Working Group’s lazy assumptions before they ended up as ‘facts’ at the Eurogroup. As for me, they knew I would never sign a third bailout agreement, and since it is only the finance minister who can sign a loan agreement on behalf of a eurozone member state, my removal was fundamental.”
Page 307
“What I had not seen coming was Alexis’s readiness to acquiesce. Divide and rule produced a farce featuring a troika appointee negotiating with the troika on behalf of a government elected to oppose it.”
Page 307
“The uninitiated may be excused for thinking that this eurozone runaround was the result of incompetence on the part of the creditors. While there is an element of truth in this, it would be the wrong conclusion. The runaround is a systemic means of control over governments of countries whose banking and/or public sectors are financially stressed. Indeed, to politicians like Wolfgang Schäuble it is a welcome feature of the eurozone.”
Page 308
“As for apparatchiks like Wieser and Costello, the runaround is essential to their personal power.”
Page 308
“Possibly because of my academic background, this was the Brussels experience I least expected and found most frustrating. In academia one gets used to having one’s thesis torn apart, sometimes with little decorum; what one never experiences is dead silence, a refusal to engage, a pretence that no thesis has been put forward at all. At a party when you find yourself stuck with a self-centred bore who says what they want to say irrespective of your contribution to the conversation, you can take your glass and disappear to some distant corner of the room. But when your country’s recovery depends on the ongoing conversation, when there is no other corner of the room to retreat to, irritation can turn into despair – or fury if you grasp what is really going on: a tactic whose purpose is to nullify anything that is inimical to the troika’s power.”
Page 309
“Why not get companies like Foxconn to build production or assembly facilities in a tech park, enjoying a special business tax regime in an area close to Piraeus?’”
Page 315

Did Varoufakis just suggest that Foxconn—a criminally bad employer—transplant their labor policies to Greece? That’s a bit naive.

“The next day Alexis relayed the news from Beijing. Someone had apparently called Beijing from Berlin with a blunt message: stay out of any deals with the Greeks until we are finished with them.”
Page 321

So like the mafia. so duplicitous. So evil. No concern at all for the lives hanging in in the balance. Just concerned about winning. And that lady in St. Gallen wants me to distract myself with Jesus. It’s pure ego to do so. To waste time worrying about my own life after death when so many suffer now.

“War cabinet meetings were turning into exercises in weighing up the utility of different forms of surrender based on Syriza survivability come the next election.”
Page 322
“‘Independently of our preferences and political will,’ I said, ‘our liquidity will run out well before then [April 30th].’ He replied that we could last much longer by plundering the reserves of non-governmental but publicly owned institutions such as pension funds, universities, utility companies and local authorities.”
Page 327

Just relentless and inhuman. Bent on destruction at all costs. More precisely: not recognizing costs that come at the expense of non-people, where a “person” is defined as “someone who has influence over my career, my power base, my wealth, or that of anyone who does have such power over me. Without direct or transitive personally positive effect, there is no incentive to act. Morality certainly won’t enter into it.

“I shall speak only the language of cooperation and goodwill. But if, Alexi, they respond with their usual mix of aggression and truth reversal, leaving us no room to manoeuvre, upon my return we must act decisively. I trust that you agree.’ Alexis agreed.

“And so I set off for Brussels determined to be maximally compromising – to make sure beyond a shadow of a doubt that Greece’s creditors were committed to denying us even a minimally rational agreement. Soon I had my proof that this was so. And Jeff Sachs, who accompanied me in all the bilateral meetings I had, is my witness.”

Page 330
“Jeff tried valiantly one more time. ‘Mario,’ he said, ‘I have been listening to this discussion and I must tell you that I am concerned. Yanis has been trying to propose a practical solution to a simple-to-solve problem. You rejected that solution, which is fair enough if there are technical problems, but I have not heard from you any alternative solutions.’ Mario shrugged his shoulders. ‘It is not for the central bank to offer such solutions. This is a matter for the politicians.’ ‘Just wait and see what the politicians do when I raise the subject with them,’ I said to Jeff as we were leaving. ‘They will refer me to back to the ECB, possibly to Poul Thomsen.’ Jeff shook his head in disbelief.”
Page 333

At long last: have you no shame? Categorically, no.

“As it was, I headed for Wolfgang’s office with Jeff and Nicholas Theocarakis, dreading what might occur but with a plan. Thinking back to what transpired I am reminded of Mike Tyson’s fantastic line at the height of his tumultuous boxing career: ‘Everyone has a plan until they get punched in the mouth.’”
Page 336
“Some, especially those under the control of the Left Platform, refused point-blank to cooperate on the grounds that the whole exercise was a charade. That was a fair point, but for better or worse our government’s policy was to cooperate fully within the framework of my agreement with Pierre Moscovici and within the spirit of the 20 February Eurogroup agreement, which committed us to doing our utmost to establish common ground with the creditors.”
Page 342

They were 100% right, though. It was a tremendous and deliberate waste of time and capital.

“In the spring of 2015 Greece’s creditors were in no mood to negotiate; they were resolved to re-establish their authority over a territory of their empire that had rebelled and to ensure that none of their other possessions got a similar idea.”
Page 343
“When our people see the same figures, aided and abetted by the troika, retain control of bankrupt banks and bankrupt media with new debt burdening the little people against whose interests the banks and the media labour, you cannot expect them to take you seriously. Or take us seriously if we do as you tell us.”
Page 369
“Alas, all the people of Greece now see is your functionaries in bed with our oligarchy’s triangle of sin: bankrupt banks, toxic television channels, corrupt procurement…’”
Page 369
“Rich Trumka, its president, told me that our success would strengthen labour’s voice within the Democratic Party, while Damon Silvers, the policy director, encouraged me with some wise advice: ‘They complain you are unreasonable until they realize they can’t buy you or bluff you or intimidate you. Then they really negotiate, often late at night.’ Rich showed me a sign over his desk that read, NOTHING WAS EVER ACCOMPLISHED BY A REASONABLE PERSON.”
Page 373
“Another warm handshake, another friendly smile and he was gone.”
Page 376

Obama, as ever, full of false assurances, feigned agreement and zero support for anyone or anything that doesn’t support his ego-myth. Even when talking to someone in dire straits, he talks of his own capitulation, encouraging their own (”we all float down here…“). Is he evil or stupid? He doesn’t get the luxury of being considered stupid.

“I met Jeff Sachs, who was bearing bad news: Wolfgang had managed to turn most of Washington’s establishment against us, he told me.”
Page 379

I don’t believe that Wolfgang turned them. Wolfgang is such an asshole that the only way he could get them to agree with him is if he was saying what they had already decided they wanted to hear.

“[…] was exactly what I had been thinking: to utilize David Lipton’s advice we would have to combine it with Lee Buccheit’s. We had to work on two fronts: compile our own comprehensive anti-MoU Plan for Greece while convincing Alexis to send an envoy to Berlin with the message Lee had scripted for us. It was the only way. But was it one that my exhausted comrade at Maximos would countenance?”
Page 380

You’re drowning and you don’t recognize it. Your party won’t. Everyone’s pretending to cooperate. In the face of this, you redouble your efforts, fighting on two simultaneous fronts, exhausted, and nearly alone. I have newfound respect for Jeff Sachs for sticking by you. He’s clearly one of the good ones.

“It all made perfect sense. The troika that had been born and raised in Athens was now Paris-bound because its ultimate mission was to control the French national budget. The harsh and failed policies imposed upon Greece had nothing to do with our country. The threat to close down Greece’s banks that Benoît had been relaying to me at the very moment Michel yelled at Wolfgang had nothing to do with our banks. They were Wolfgang’s signal to Paris: if France wanted the euro, it must forfeit sovereignty over its budget deficits.”
Page 381
“It was an extraordinary if unsurprising act of bad faith. Having promised Alexis that the two of them would find a solution behind the scenes while Varoufakis and Schäuble cancelled each other out, [Merkel] was now hanging him out to dry.”
Page 388
“The main number I had in mind – which had snagged my attention like a rusty nail – was 3.5. The pages were a letter signed by the Greek prime minister and addressed to the troika, committing to a budget with a primary surplus target of 3.5 per cent of national income. Unbelievably, the same number appeared next to the years 2018, 2019 … all the way to 2028. With the exceptions of Singapore and oil-rich Norway, no country in the world has ever posted a 3.5 per cent budget primary surplus for ten years in succession. The chance that a depressed economy lacking functional banks and with negative investment could do so was the nearest to the theatre of the absurd that economic policy can produce.”
Page 392
“Beneath Alexis’s political, economic and moral error in surrendering to austerity lay another, larger error: his belief that the troika would give him a speedy agreement and a third bailout in return. Undoubtedly, Merkel and Wieser had encouraged Alexis and Chouliarakis to believe this. But setting aside the fact that we had no mandate from our voters for such an agreement, there were two reasons why not even this was on the cards. First, the creditors would surely want to make an example of Alexis – who had spent years in opposition, and some months in government, lambasting them – as a deterrent to any other politician in Spain, Italy, Portugal or indeed France who might be tempted to confront them. For this they would need not just his capitulation but his very public humiliation too. Second, the troika had been denying for years that either a third bailout loan or significant debt relief were necessary. The only way they could explain a third bailout loan now was by claiming, as Poul Thomsen had done during the Riga Eurogroup, that the Greek debt had in fact been sustainable until Syriza won government, and to prove their charge it would be necessary to close down Greece’s banks, cause massive new losses and bankruptcies and then blame the costs on Alexis’s government.”
Page 394
“Half an hour later my phone rang again. It was Jeff, laughing uncontrollably. ‘You will not believe this, Yanis,’ he said. ‘Five minutes after we hung up, I received a call from the [US] National Security Council. They asked me if I thought you meant what you’d said! I told them that you did mean it and that, if they want to avert a default to the IMF, they’d better knock some sense into the Europeans.’ I had fully expected my phone to be tapped, but two things made Jeff’s news remarkable. First, the eavesdroppers not only had the capacity to recognize that what I had said was of real significance but they must also have had an open line to the NSC. Second, they had no compunction whatsoever about revealing they were tapping my phone!”
Page 396
“But there was another French politician I met that day who truly engaged with the plan, who told me it was a good one and who encouraged me to proceed with it: Emmanuel Macron.”
Page 404

The best of the worst, apparently?

“Co-signed by policymakers who combined exceptional pedigrees with experience of the highest levels of governance from across the political spectrum, it was a powerful weapon.”
Page 406

God-damned if I might not have to throw Larry Summers a bit of a bone for putting his name to that document.

“‘But Wolfgang,’ I replied, still reeling at his words, ‘as responsible leaders and Europeans, we should do all we can to prevent Grexit and to offer our peoples a clear vision of a decent life within the eurozone. Pushing them to make a choice between a catastrophic fiscal policy within the eurozone and a catastrophic exit from the eurozone is not the mark of an enlightened political leadership. Don’t you see that the problem with the MoU is that it offers no hope whatsoever for a decent future?’”
Page 408
“You reject my ideas; your own proposal was rejected by your chancellor, and meanwhile the negotiations between my prime minister’s team and the troika in the Brussels Group are heading in a direction that is the opposite of a solution. What should I do, Wolfgang?’ He looked up for the first time in a while and said without any enthusiasm, ‘Sign the MoU.’ We had come full circle. ‘OK,’ I said. ‘Let’s suppose I do it. Let’s assume that I sign the damned thing. Tell me this: are we not going to be in the same situation again in six or twelve months? With another funding crunch feeding GREECE ON THE VERGE AGAIN headlines, more recession, and a political backlash in the Eurogroup?’ Perking up a little, Wolfgang agreed and said, ‘This is why I told you to convince your prime minister to consider a time out.’ ‘Except that your chancellor put an end to that discussion.’ ‘Well, that leaves you with the MoU,’ he said, falling back once more on the same non-solution.”
Page 414

How does one have such patience to talk endlessly in circles? I wonder how much this is due to an inability to understand or properly communicate in English with enough confidence to be certain that one is not giving away undue advantage.

“‘Would you sign the MoU if you were in my place?’ I was expecting him to give me the predictable answer – that, under the circumstances, there was no alternative – along with all the usual, senseless arguments. He didn’t. Instead he looked out of the window. By Berlin standards, it was a hot and sunny day. Then he turned and stunned me with his answer. ‘As a patriot, no. It’s bad for your people.’”
Page 415
“As I departed that day, I was not leaving behind me a Machiavellian dictator; I was leaving behind a sunken heart, a man ostensibly more powerful than almost anyone in Europe who nevertheless felt utterly powerless to do what he knew was right. As the great tragedians have taught us, nothing causes greater wretchedness than the combination of supreme authority and wholesale powerlessness.”
Page 415
“To demonstrate the flaw, I performed a simple exercise: I asked the troika’s model to simulate the impact on the government’s revenues of raising the VAT rate from 23 per cent to 223 per cent. We all know what would happen in reality after such a ludicrous tax hike: sales would collapse and so would the government’s revenues. But not in the troika’s model, which produced a massive increase in revenues.”
Page 417

That has to be a poor jest. Or a lie.

“The words of caution that Jeff Sachs had once shared with me rang true: ‘These people lie. Don’t trust them.’ Still I could hardly believe that Poul could have been so blatant.”
Page 419

I guess Yanis’s honesty is refreshing, but his naiveté is disheartening.

“The situation was truly absurd: a left-wing finance minister representing Syriza, the Alliance of the Radical Left, was arguing like a Reaganite Republican in favour of lower tax rates, including for business, against supposedly neoliberal functionaries insisting on increasing them. It was a sure sign that this negotiation had no basis in economics.”
Page 419
“Meanwhile, Jeff Sachs was sending me urgent warnings: ‘They demand an SLA first, promising talks about debt relief and the like later. But they lie! Once you give them the SLA they will deny they ever promised you anything. Don’t fall for it!’ How could I tell Jeff that I no longer had Alexis’s ear? That he seemed compelled to go inexorably down that path?”
Page 425
“Christine looked off-colour. It later transpired that the previous night the IMF had been pressured into withholding its latest sustainability analysis of Greece’s debt. No doubt the reason was that, as the New York Times reported, ‘having run the numbers, the fund now accepted the central argument being made by Mr Varoufakis: Greece was bankrupt and needed debt relief from Europe to survive.’”
Page 441
“Greece was, and unfortunately remains, a laboratory where the destructive powers of extend-and-pretend loans plus self-defeating austerity were tried and tested. Greece is a battleground on which a war against European democracy, against French democracy, is tried and tested. Greece was never the issue for the troika and its minions. You are! This is why I am here. I am here because what happened to us is beginning to happen to you.”
Page 483
“Even some who sympathize with DiEM25’s pan-Europeanism dismiss it as utopian. But allow me, dear reader, to share a strongly held belief as my parting shot: our movement may be utopian, but its policy of constructive disobedience within the EU, of being both in and against this illiberal and anti-democratic Europe, is the only practical alternative to the dystopia unfolding as Europe disintegrates. That was my stance as Greece’s finance minister. It remains my stance today.”
Page 485
“Despite its spectacular predictive blunder Greece proved a nice little earner for the IMF. By the time I resigned, the bankrupt state had paid over €3.5 billion in interest and fees to the IMF, averaging 37 per cent of IMF total net income, and covering 79 per cent of its total internal expenses. Ever since Greece entered debtors’ prison, the IMF has had an average operating profit of 63 per cent, much larger than that of Goldman Sachs or J.P. Morgan. And where have the IMF’s profits come from? Europe’s taxpayers, of course.”
Page 491