Original subtitles

Larry Summers is a very smart economist

who is also a systems man, an establishment man.

He rose to be the treasury secretary of Bill Clinton

and implemented the complete unshackling of Wall Street.

Interestingly, he's also the man

that President Obama brought back in

to the administration to fix things.

When I sat down with him that late night at

a particular Washington DC hotel bar, he said, "Yanis,

there are two kinds of politicians: the outsiders,

who are quite happy to get on a soapbox

and tell the world what they believe in,

but very soon they get jettisoned by the system

and in the end, make no difference.

And there are the insiders.

And the golden rule of the insiders is you never turn

against another insider and you use whatever

information you get internally within the establishment.

What kind of politician are you?" That was his question.

In my first meeting with Michel Sapin,

the French finance minister, we spent an hour

like brothers-in-arms.

He agreed with everything I put forward,

as ideas about the debt, about the Greek programme,

the ending of austerity.

It was a meeting of souls, minds,

ideologists.

And then we step out for the traditional press conference.

We need a short space of time during which

to table our proposals.

And then he starts speaking.

"My obligation to my creditors

to keep on imposing the austerian programme."

I thought, what? As we were walking away,

he became affable again. And I turned around

and said, "who are you and what have you done to my Michel?"

All he said was, "Yanis, you must understand.

France is not what it used to be."

Is Mr. Varoufakis

someone you can do business with?

Well, he's clearly an able

and intelligent representative of the Greek government.

As Dr Schäuble said, we didn't reach an agreement.

It was never on the cards that we would.

We didn't even agree to disagree from where I'm standing.

What we are suggesting

to our European partners is you may not like the fact

that we were elected because we're a left-wing party,

but use us in the context of a European project

for turning a page in Greece and turning a page in Europe.

I don't know if and when they run out of cash

because I don't control the till in Athens.

That is their responsibility.

All that I know is that we can only release further

loans

from the European funds if there is a full agreement on the

total package and if they start implementing reforms.

Good evening. The new Greek government's not even a week

old, but today the first major standoff.

The country's Finance Minister said he'll no longer

cooperate with the Troika.

Greece has just four weeks to find a way

to make its repayments

or the country will quite simply run out of money.

In my first Eurogroup meeting, I tried

in my rookie speech to signal a readiness

to compromise. To say to them that,

"Look folks, here there is a clash

between two different principles.

There's the principle of continuity.

Yes, we are a new government,

but that does not mean that we do not have

commitments to you." It is of

the utmost importance that Greece remains on

on a path of recovery.

"And I'm here dedicated to working with you, sitting

around the table for as long as it takes

to find an honorable compromise,

one that allows us to breathe

and at the same time helps repay most

of the loans to our creditors."

This requires commitment to reform process

and to fiscal sustainability.

Taking unilateral steps

or ignoring previous arrangements is not the way forward.

"But at the same time, there's the principle of democracy,

with a new mandate to contest those agreements."

I thought this was the

apotheosis of moderation.

I could see Wolfgang Schäuble, the German finance minister,

getting very agitated.

He gets the floor and very quickly comes up

with a classic line.

"Elections cannot be allowed to change economic policy."

To which of course, I retorted that this is excellent news

for the Chinese Communist Party because they agree.

This Eurogroup was never meant to settle any issues.

I was invited...

I was invited because I'm the new kid

on the block, so to speak.

The idea of Troika visits comprising

cabals of technocrats from the three institutions in

lockstep walking into our ministries

and trying to implement a program which has failed,

at least in the estimation of our government,

and, I think, of our people, that is a thing of the past.

It is true that we have already wasted the last

of our liquidity

and we're in a very difficult situation.

How long do you have left? It depends. You

famously sort of recorded some of your Eurogroup meetings

because you wanted

to make sure that the briefings were accurate to

what you had heard in the meeting.

What's so strange about that?

I had to report to parliament. We want to end this.

We want to end this. This is not going to be a government

that's going to fool you into believing

that we are interested in a reform programme just

because we want the next loan tranche.

You may have gathered that we don't give a damn

about the next loan tranche.

We prefer to go down in flames than

to keep extending this indignity.

What, you were

secretly recording conversations?

Absolutely. You know, it didn't happen by design.

I go into the first meeting

of ministers of finance.

That was my inaugural

Eurogroup meeting as it's called.

At the end of that meeting,

which was a soul-destroying meeting,

I came out dazed, confused,

with a threat that the banks

of our nation would be closed within five days.

These are seriously stressful moments.

I called my secretary

and said, "Fotini, get me a transcript of the ten-

and-a-half hours. I would have to inform the Cabinet,

the Prime Minister, and I have to confess

that after ten and a half hours.

of course I remember what had happened, but not verbatim.

When you are under so much psychological

and physical stress, there are things - you

forgot who exactly said what

and the order in which it was said.

So I asked for a transcript, a minutes of the meeting.

And she called me ten minutes later saying, "Minister,

I was told that there are no minutes, no records at all."

And then it's wall-to-wall coverage globally and

a version of the truth that has nothing to do

with the truth, is registered as the truth,

and I have absolutely no way of defending myself.

So after a while, I started recording every meeting.

I watched the transmission of fake news

during my period in office.

There's been a very serious misunderstanding,

which I hope was not intentional by members of the press.

Not everybody, thankfully. You

won't deal with the Troika.

Is that right? You will not deal with the institutions - No it is not -

that are your creditors - By the way, I was listening

to your report, and I have to tell you, you know,

I'm a great BBC fan,

I've never listened to such an inaccurate report.

I would be in a meeting in some godforsaken,

neon-lit room in Brussels with the creditors'

representatives, Europe ministers,

and so on.

Some of my interlocutors or their minions would

send a message to one

or two key journalists waiting outside,

representing the Wall Street Journal, the Financial Times.

This was genuinely fake news, reporting

that I said something which I had not said

or that something was said to me

which not was not said to me.

Those journalists would not necessarily print it in the

newspaper, but they would tweet it -

that we heard that this was what Varoufakis said or what was said

to Varoufakis. Very soon after that, it was printed all over the world.

It was reproduced as fact and then they would print it,

reporting that the world press is saying this, not

reporting their own sources.

There is no democratic deficit in Brussels.

It's like saying that there is a deficit

of oxygen on the moon.

There's no deficit of oxygen on the moon,

there's just no oxygen. Similarly,

there's no democracy in Brussels.

Brussels is a cartel.

European countries fought long

and hard to establish democratic regimes. And we have them,

and it's a magnificent thing that we have functioning

democracies, at least formally speaking.

But at the same time, we created the European Union.

We brought together these nation states

and pushed all the important decisions onto Brussels.

The first version of the European Common Market

of the European Union was the so-called

European Communities of Coal and Steel, exactly like OPEC.

But the problem with a cartel is

that it is inimical to democracy.

OPEC could never be democratic.

The only way of fixing prices is through an agreement

between oligarchs.

So a pan-European cartel, which is

what the European Union was, was always meant

and always designed to be a democracy-free zone.

To legitimize that cartel, at some point it was important

to create something called the European Parliament,

which is, however, the only parliament in the history

of the world that doesn't have the capacity

to initiate legislation, which makes it a joke really...

just a rubber stamp.

Now, one of the things that you mentioned is that they had

imposed a four

and a half percent primary surplus.

No country's ever had that kind of a primary surplus

for the length of time that was dictated.

How did the Greek government,

the previous Greek government sign a program like that?

And how could the ECB

and the Troika propose a program like that?

And one more question. Are they serious about doing that?

Have they changed their mind? Now?

I think it's the politics of denial.

The greatest embarrassment for the Troika officials that I

worked with was that the proposals I was putting to them

would've normally been the kinds

of proposals they would be putting forward.

For instance, when it came

to the debt restructuring proposals, the debt swaps,

I had worked on them with people like Thomas Mayer,

who used to be the chief economist of Deutsche Bank,

of all places, of all institutions.

What if we were to admit that an unpayable debt

cannot be paid and it has to be restructured?

This is something that Wall Street lawyers do every day.

So why were they insisting on rejecting these proposals

and sticking to a programme which they themselves understood

to be catastrophic for Greece

and not particularly helpful to them?

Amartya Sen put it brilliantly to me once. He said, "Your

trouble, Yanis, was that you were negotiating

with creditors who did not want their money back."

The beauty of it all was

that this interpretation was offered to me by

one of the top officials of the Troika, Christine Lagarde,

the managing director of the International Monetary Fund,

who in our first face-to-face, one-on-one meeting

at some point, astounded me by admitting that the programme

that she and the rest of the Troika

who were imposing upon Greece all those years,

and which they still wanted to impose upon me

and my government, could not work.

This is verbatim. She said,

"Yanis, of course you're right.

This programme cannot work."

This is not to say that it's difficult to make it work.

It's an impossibility theorem.

You know, deep down, I don't know whether you have

this, you probably don't.

You're Noam Chomsky, you wouldn't.

But I'm less experienced in this game

of clashing with powers that be at that level.

And deep down, I think if I psychoanalyse myself,

I really wanted to think that the adults know

what they're doing and that I'm the child that is recalcitrant,

kicking and screaming.

But deep down, the adults,

the people in power at the top of the IMF know

what they're doing, and my complaints

and protestations, maybe they're not

completely accurate.

Maybe they know more than I think they do.

But when these people turn around to me

and say, "You're right, it can't work.

What we are trying to impose upon your nation can't work.

But Yanis, you must understand we have

invested so much political capital in this programme,

we can't go back.

And your credibility, my credibility,

depends on accepting it."

Of course, I didn't give a damn about my credibility

with Christine Lagarde or any of these people.

All I cared about was my credibility with the voters, the Greeks

who were languishing in debtors' prison.

Well, that's only 10% of the story.

Look, the IMF is the worst of the worst.

They're throwing a spanner in the works. My interpretation is they're being

so recalcitrant and so obnoxious,

they can't possibly want a solution

and they can't possibly want a default either.

It seems to me that they want out.

You know, the Eurogroup, by the way, doesn't exist.

Did you know that? I didn't know it.

I found out that it doesn't exist when in the Eurogroup,

I contested a decision made

by its president.

I contested the legality of that decision.

And he turned and he said, "Oh, I can do it."

I put my hand up again. I said, "Excuse me.

I would like a legal opinion from the

secretariat as to whether this is true.

I'm a minister of finance. I belong to the Eurogroup.

I have the right to ask for legal advice

from the Eurogroup secretariat."

There was a kerfuffle for about 10, 15 minutes.

They were sort of talking on the phone

and trying to find out what to answer. And the answer,

the official answer, came.

And the official answer was, lo

and behold, "Minister,

the Eurogroup does not exist in law.

It's not mentioned in any European Union treaty.

It's an informal meeting and

therefore its president can do anything he likes."

Today's Eurogroup meeting condemned the awfully inaccurate

and unhelpful supposed leaks that

marred the aftermath of the previous Eurogroup meeting in Riga.

Thank you. Now I'd like to turn to Yanis.

Let me start also with a comment on leaks.

It would be good if there were none,

but if there are leaks,

it would be good if they were accurate.

I remember years and years

before entering politics, how grateful I was to people like

Julian Assange and WikiLeaks. As a young man,

I was terrified by 1984, George Orwell's book. I felt,

my goodness, this is a very prescient,

very prophetic book because technology is going

to make it absolutely possible, inevitable

that Big Brother will have a way of knowing

where I am at every point in time,

what I'm saying, who am I speaking with,

and so on and so forth. And that is a terrifying thought.

I mean this is our reality, as we all know.

And I could not imagine what would stop tyranny from

developing on the basis of Big Brother.

What could stop Big Brother?

And the whole notion of WikiLeaks gave me hope long

before it became well-known internationally.

And what is that notion? That we take the technologies

of Big Brother and we convert them into a gigantic mirror

that we turn towards the face of Big Brother,

so that Big Brother knows that

as he's watching us, we are watching him.

That idea liberated me from the fear of technology

and the fear of Big Brother.

Once, he called me and he said, "I've got something very

interesting for you to hear."

And I went to the embassy

and he played a tape of a discussion that was leaked

to WikiLeaks from unknown sources between

apparatchiks of the International Monetary Fund, where

they were confirming everything I was saying about the Greek

programme and the Greek austerity with, actually, a degree

of passion and a degree of indignity that the IMF, Germany,

the German government of Germany, the German government,

the European Central Bank, were doing this

to the poor Greek people.

We have to break down these barriers

and we have to turn the mirror towards

the face of Big Brother.

But what tangibly can you do going forward?

Okay.

I would like us to demand collectively as Europeans,

as European citizens, that we shall all agree

that every time Cameron, Tsípras, Merkel meet,

that their meetings should be live-streamed

and we should be able to listen to what they say.

How about that? How about demanding

that the European Central Bank governing

board meetings record minutes

which are then published on the internet.

It's like a clapometer. We don't need new

institutions or treaties for this.

We can agree this for next week, tomorrow.

An informed body politic is a powerful body politic, which

disempowers those politicians

who are running agendas

against the interest of the majority.

Mr Varoufakis, you've been in virtual deadlock for months now.

Isn't the truth that you're going to have

to row back on some of the promises you made

to get elected in order to reach agreement

with Greece's creditors?

We have compromised to a very large extent.

Is there going to be a redistribution of the burdens

of the crisis from the shoulders of the weak,

who can't bear them anymore, onto the shoulders of those

who were partly responsible for causing the crisis

and who are not burdened

by those burdens at all at the moment?

I should make an announcement,

give a press conference, as I always do after Eurogroup,

and then the Prime Minister should come out

and declare that the next day there will be no payment

to the IMF and call our partners

and institutions to urgent discussions on

how to resolve this situation.

That was my recommendation.

Before the conversation could come to a conclusion,

the phone rings and it's the Bank of Greece, Yannis Stournaras, who

absolutely by accident

and miraculously, happened

to find 650 millions for us.

Yeah? Isn't it astonishing?

What, what a stroke of luck at the very last moment.

I mean, they think we're complete idiots,

don't they. I said, "Look, this money never existed.

They created it." Alexis is very smart. You know,

he said, "Bastards.

Now they're making it impossible

that we should default on them."

So we have been dragged further and further into a labyrinth.

This is what's going on.

It is quite clear that the reason why we had

a deposit flight was because every day, even

before we were elected, Greeks were being told

that if we are elected and if we stay in power

for more than a few days, the ATMs will cease functioning.

Right on cue.

But this is Brussels, right?

So... I've been asked whether the people

manning and womanning those institutions,

the apparatchiks, the bureaucrats, whether they're awful

people, evil people.

The answer is very clear:

no, they're not. They're not even that

because, let's face it, truly evil people are interesting.

Homo Bureaucraticus is a banal creature.

Homo Bureaucraticus comes to you with a list,

and boxes that they need to be ticked.

And the whole conversation, which has a semblance

of a conversation, is not really a conversation -

it is an algorithm, the purpose of which is

to extract all those demands, all those

concessions from you.

So in the end, the people that you're dealing

with are like robots.

They're like automata. They're neither good nor bad,

and they had effectively to be bleached of human content

in order to be performing their duties.

There is a Darwinian process

of selection within those institutions that selects for banality.

And even if one is not banal, one has

to become banal in order to rise to the position

of power that is necessary for them to be facing

someone like a minister of finance.

And, as a politician who has been elected to serve the public

facing them, it is of the essence that you bypass them,

that you go beyond the banal

and you meet genuinely interesting people

who are at the top of those institutions.

People like Christine Lagarde, like Wolfgang Schäuble,

who were nastier in many important ways, or nicer.

But at least they were human beings.

It's my considered opinion that now the agreement has

to be reached at a level of political leaders, heads

of state, prime ministers, chancellors,

Greeks need a missing ingredient: hope.

A speech of hope for Greece is precisely that

which would take and make all the difference now.

A speech of hope for Greece

would benefit our creditors

as our renaissance will eliminate the probability

of defaulting on their loans.

Who should deliver the speech of hope?

Well, I think it should be the German chancellor.

So Tsípras was obviously banking on Merkel

to be the good cop.

Usually she's the one that is full

of understanding. This time she said, "Oh, by the way,

you need to have a surplus, primary surplus,

of 2.5% next year.

No less than that." It's ridiculous.

You may have noticed that in my presentation, I try

to be positive, to talk about a possible agreement.

An agreement that we're tabling,

which we deeply believe that if it was accepted,

or it became the foundation upon which an agreement is

based, a final agreement, a compromise,

we would make this crisis go away.

In this frame of mind, I'm going to refuse to discuss

speculation about failure.

There are moments when your interlocutor surprises you.

And that moment in my relationship

with the German finance minister, Wolfgang Schäuble, came when

he broke with the tradition of the previous months,

when he was effectively instructing me to do

as I'm told. It came when I asked him a simple question.

"So let's say, Wolfgang, that I sign on the dotted line here.

Do you think this would be end of the crisis?

Because my fear is that if I sign on the dotted line,

this crunch that we just experienced,

and which we're experiencing now, is simply going

to repeat itself in six months'

time, only it will be worse." And he agreed.

And I thought, oh my God, he's agreeing.

If if he's agreeing, what am I going to say?

And then he added,

"But you realize that I cannot be seen

to be acquiescent with you."

And what he meant, it was clear

- and there was a logic to it as well - that if

it was revealed that the two of us had struck an agreement

that was mutually beneficial, that would be signalled

to the good people of Spain: that if they voted

for a government like ours, they could get a good deal

for Spain; to the good people of Ireland;

to the good people of Italy.

Finally, to the good people of France.

And Wolfgang was clear on this.

He wanted the Troika in Paris,

and we Greeks were collateral damage.

What is really going on?

There is a titanic battle between, on the one hand,

the IMF and Berlin.

I mean, there is that. And at the same time there is

Paris versus Berlin.

So Greece is a little mouse

that is being squashed while the elephants are tussling

trying to work out their differences.

I said to him, "Wolfgang, I want to ask you a favour.

Can you please stop telling me what to do?

And just for 10 minutes

have a conversation with me as a friend.

And the question is this: if you were in my shoes,

would you sign that document?"

He didn't answer for a good while.

It felt like centuries to me.

It was probably a couple of minutes.

Two minutes can be a very,

very long time under the circumstances.

And he turned back to me and he said, "No, I wouldn't."

And I said, "Okay, so what do we do?"

And he just raised his shoulders in a state of despondency,

of genuine fatigue.

A few days later, in a Eurogroup meeting, during a break,

he actually congratulated me for not signing.

He said to me, these are words he used,

"If you signed, you would be answerable

to your people."

Today, the Greek government has huge challenges.

I would never change my job with him.

I'm quite happy.

To make the transition from academic to politician,

there had to be a major crisis.

I'm only an accidental politician.

I only threw my hat in the proverbial ring

because of the intensity of the crisis

and the opportunity to put my money where my mouth was.

Once you make the transition from academia to politics,

suddenly there's no possibility of genuine dialogue.

I was expecting that when finance ministers get together,

we discuss finance, we discuss economics.

Never did we have a discussion on those matters. Not once.

And when, because I was representing a country whose

political economy was dying,

when I brought these issues to the table, I was looked at

as an outsider, that impolitely barged in demanding

to have a conversation that was beyond the pale.

We would have a meeting that would last ten hours,

and we would spend one,

one and a half hours with little speeches, monologues

and then the rest of the time, eight hours, nine hours,

was spent negotiating. What? The communique.

Arguing and nitpicking

regarding particular words

that could go in the press release.

That contrast between academic life, where you live

or die on the basis of the quality of your opinions,

to the Eurogroup, where ideas really don't get discussed,

even policies do not get discussed,

I have to say, I had not expected that.

Unfortunately, agreement has not been reached as yet.

But there will come a point where Greece will either have

to compromise or it will have to default.

And that is when you'll compromise, isn't

It? We have compromised enormously

But you have to -

But we're not going to sign on an agreement

that makes this crisis worse.

We are going to compromise, compromise,

compromise without being compromised.

That is what we're going to do.

What was your strategy?

What was your long term plan?

My strategy was to bombard them with moderate proposals

regarding the debt, proposals that were moderate,

technocratically advanced,

but at this very same time that did the job

of getting us out of debtors' prison.

To back this strategy, there were a couple

of tactics involved.

One was a deterrence plan.

I knew that the way they would try to defeat us,

to asphyxiate us, would be through closing down the banks.

So I had a plan for deterring the closure of the banks.

This involved primarily two things.

Number one was the threat that if you close down my banks,

I'm going to haircut the bonds that are owed

by the Central Bank of Europe.

And if I do that, I know you're going to have huge problems

maintaining Italy within the Euro

because of a legal dispute with the Bundesbank,

the Central Bank of Germany.

The second part of it was

to create a parallel payment system that I would be able to

activate outside the banking sector, outside the financial

circuits that would allow Greeks to transact

with one another using the website

of the Greek tax office.

Why not threaten to take Greece out of the Euro?

The moment you start talking about leaving the Euro

in public, it becomes a self-fulfilling prophecy

because the Euro is a very fragile thing.

Even though it looks hard

and hard-nosed, all it takes for the Euro

to collapse is for a critical mass of people to think

that it's going to collapse. If a sufficient

number of people start thinking that Greece is out

of the Euro, Greece is out of the Euro

before you even know it.

So for me, getting out of the Euro was not the plan,

was not the objective. For others, it should have been.

It wasn't for me. For me, it was

a debt restructure within the Euro.

Of course, I was prepared to contemplate getting out

of the Euro if needs be.

But if this is not your aim,

you should not speak the languages of Grexit.

Toying with Grexit, which is something we don't do,

we are refusing to discuss it

because as I've said before, even worrying about it is like

worrying about being hit

by a comet in a universe in which comets are attracted

to you if you're worried about them.

Actually, it was put to me by somebody very high up in the

IMF that the only alternative to this slow

Chinese torture kind of process is to do

what the Poles did,

what Balcerowicz did in 1990s, which is to say,

"We're not playing ball here.

We're not going to go through this process.

But instead, here is a document,

which is our national plan for revival,

recovery, growth, whatever."

And ever since,

I've been working on a document like that. Now I have one

and I've been trying to convince the rest of the cabinet

that we should adopt this strategy.

I was in a minority, but even though we gave a great deal,

the concessions were just, for me,

they were too many. Too many, and too deep.

Even then,

they wouldn't even release some liquidity.

My Troika interlocutors, from possibly the first week,

they surmised I'm not somebody they can do business with,

and they had to get rid of me.

It was the only way of maintaining the

fraudulent bankruptcy concealment process.

So I had to go.

It was clear from the beginning,

and they tried a variety of ways until they succeeded.