Yanis Varoufakis
This morning.
Yanis Varoufakis, who has said he will resign as Greek Finance Minister if Greece votes Yes in Sunday’s EU bailout referendum, spoke with Audrey Carville on RTÉ Radio One’s Morning Ireland.
Audrey Carville: “Greece will vote on Sunday, on a bailout plan which is no longer on the table from its creditors. The banks have been closed for a week and we heard earlier that the country is quickly running out of money. Last night the IMF said that Greece needed debt relief, that it should have a 20-year grace period before making any debt repayment and no final payment until 2055. It also said that it would not put a request for a third bailout package to its board, unless it included debt relief. Yanis Varoufakis is the Greek finance minister. I asked him was that the language he had been waiting to hear.”
Yanis Varoufakis: “Yes indeed, it is music to our ears because what we have been saying right from the beginning is that the great, big reason why we have a huge crisis here in Greece is that our debt is unsustainable, has been since 2010, investors know that. They’ll not invest in a country whose debt cannot be sustained because they fear that the tax burden… that they wouldn’t profit from their investment. Interestingly, last week the IMF was part of a Troika delegation in Brussels that put to us a very comprehensive proposal for an agreement which, actually, did not involve debt relief. And it’s the reason why the negotiations stalled.”
Carville: “So it wasn’t mentioned? It wasn’t mentioned in their original proposal? Has it come too late almost? If it had had been there, a few weeks ago, might there have been a deal?”
Varoufakis: “There’s no such thing as too late. We have a duty to the people of Europe to grab whatever opportunities there are, for sensible agreements, that are beneficial for the whole of Europe, including the IMF. So I don’t believe it’s too late. We could do a deal tomorrow morning.”
Carville: “What do you understand their comments to mean though? Do you understand them to mean a debt write-off or would Greece have to pay eventually?”
Varoufakis: “Well Greece wants to pay. We are very keen, as a proud people, just like the Irish, to meet our obligations with our creditors. The problem is that the combination of [inaudible]and the austerity policies which are being imposed, so as supposedly to be repaid conspire to ensure that out national income shrinks, which makes it impossible to repay. So, a sensible fiscal policy, coupled with debt relief, you don’t even need to talk about haircuts. So we can have a sensible public financial engineering exercise that renders our debts payable and sustainable, this could be [inaudible]. Together we could reform this country by needs, it would end the crisis and help us repay our debts.”
Carville: “But of course the IMF is just one of your creditors. The ECB and the European Union are two more and they may be much harder to convince. They’ve certainly not mentioned debt relief. Enda Kenny said last week he would not support debt relief for Greece.”
Varoufakis: “But isn’t this a conundrum. Here we are negotiating, as a Greek government, with three institutions that disagree with one another – each one of them as a different set of red lines. So wherever we tread, we tread on red lines. And this is where you have it, you have it. This is the reason we have not reached agreement. This is a very inefficient and ineffective way of going about the business of European economic policy.
As for the Irish position in this, I don’t believe that the Irish Government has any reason to oppose our proposal because, let’s face it, Greece and Ireland took a major hit right after the Greek financial collapse in 2008 on behalf of the rest of the Eurozone. The Irish people have been saddled with a preposterous debt, for reasons that you know better than I, that happened immediately after our debt exploded and we had the inaudible of the bailout in 2010. It’s about time the Irish and the Greeks, possibly the Portugeuse and other peoples of Europe request a very sensible debt relief exercise for the whole of Europe, without haircuts, we can do it. Technically, the way forward, all we need is the political will to get together as opposed to staying apart.”
Carville: “So Enda Kenny should be, should ally himself with you in looking for debt relief?”
Varoufakis: “Not just with us, with the whole of Europe. I think the whole of Europe should be sensible about that. We have a major public debt problem in Europe and it’s about time we sat down around the tables, rationally, and we discussed it. Instead of that we have taboos, we’re prohibited from discussion about debt, that debt supposedly is a moral duty and it should not be discussed as a matter that requires any kind of rationalisation, re-profiling or restructuring. This kind of denial, of very simple economic facts, is contributing mightily to the deflation of the forces that are making it very hard for Europe as a whole to escape a crisis of other investment and the crisis of inflation..”
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Earlier: Free Tomorrow?
Pic: Matt Dunham/Bloomberg
