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Larry Summers is a very smart economist
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who is also a systems man, an establishment man.
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He rose to be the treasury secretary of Bill Clinton
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and implemented the complete unshackling of Wall Street.
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Interestingly, he's also the man
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that President Obama brought back in
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to the administration to fix things.
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When I sat down with him that late night at
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a particular Washington DC hotel bar, he said, "Yanis,
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there are two kinds of politicians: the outsiders,
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who are quite happy to get on a soapbox
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and tell the world what they believe in,
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but very soon they get jettisoned by the system
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and in the end, make no difference.
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And there are the insiders.
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And the golden rule of the insiders is you never turn
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against another insider and you use whatever
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information you get internally within the establishment.
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What kind of politician are you?" That was his question.
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In my first meeting with Michel Sapin,
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the French finance minister, we spent an hour
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like brothers-in-arms.
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He agreed with everything I put forward,
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as ideas about the debt, about the Greek programme,
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the ending of austerity.
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It was a meeting of souls, minds,
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ideologists.
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And then we step out for the traditional press conference.
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We need a short space of time during which
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to table our proposals.
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And then he starts speaking.
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"My obligation to my creditors
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to keep on imposing the austerian programme."
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I thought, what? As we were walking away,
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he became affable again. And I turned around
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and said, "who are you and what have you done to my Michel?"
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All he said was, "Yanis, you must understand.
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France is not what it used to be."
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Is Mr. Varoufakis
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someone you can do business with?
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Well, he's clearly an able
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and intelligent representative of the Greek government.
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As Dr Schäuble said, we didn't reach an agreement.
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It was never on the cards that we would.
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We didn't even agree to disagree from where I'm standing.
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What we are suggesting
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to our European partners is you may not like the fact
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that we were elected because we're a left-wing party,
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but use us in the context of a European project
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for turning a page in Greece and turning a page in Europe.
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I don't know if and when they run out of cash
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because I don't control the till in Athens.
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That is their responsibility.
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All that I know is that we can only release further
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loans
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from the European funds if there is a full agreement on the
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total package and if they start implementing reforms.
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Good evening. The new Greek government's not even a week
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old, but today the first major standoff.
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The country's Finance Minister said he'll no longer
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cooperate with the Troika.
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Greece has just four weeks to find a way
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to make its repayments
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or the country will quite simply run out of money.
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In my first Eurogroup meeting, I tried
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in my rookie speech to signal a readiness
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to compromise. To say to them that,
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"Look folks, here there is a clash
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between two different principles.
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There's the principle of continuity.
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Yes, we are a new government,
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but that does not mean that we do not have
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commitments to you." It is of
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the utmost importance that Greece remains on
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on a path of recovery.
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"And I'm here dedicated to working with you, sitting
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around the table for as long as it takes
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to find an honorable compromise,
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one that allows us to breathe
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and at the same time helps repay most
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of the loans to our creditors."
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This requires commitment to reform process
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and to fiscal sustainability.
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Taking unilateral steps
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or ignoring previous arrangements is not the way forward.
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"But at the same time, there's the principle of democracy,
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with a new mandate to contest those agreements."
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I thought this was the
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apotheosis of moderation.
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I could see Wolfgang Schäuble, the German finance minister,
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getting very agitated.
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He gets the floor and very quickly comes up
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with a classic line.
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"Elections cannot be allowed to change economic policy."
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To which of course, I retorted that this is excellent news
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for the Chinese Communist Party because they agree.
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This Eurogroup was never meant to settle any issues.
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I was invited...
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I was invited because I'm the new kid
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on the block, so to speak.
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The idea of Troika visits comprising
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cabals of technocrats from the three institutions in
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lockstep walking into our ministries
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and trying to implement a program which has failed,
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at least in the estimation of our government,
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and, I think, of our people, that is a thing of the past.
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It is true that we have already wasted the last
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of our liquidity
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and we're in a very difficult situation.
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How long do you have left? It depends. You
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famously sort of recorded some of your Eurogroup meetings
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because you wanted
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to make sure that the briefings were accurate to
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what you had heard in the meeting.
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What's so strange about that?
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I had to report to parliament. We want to end this.
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We want to end this. This is not going to be a government
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that's going to fool you into believing
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that we are interested in a reform programme just
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because we want the next loan tranche.
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You may have gathered that we don't give a damn
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about the next loan tranche.
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We prefer to go down in flames than
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to keep extending this indignity.
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What, you were
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secretly recording conversations?
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Absolutely. You know, it didn't happen by design.
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I go into the first meeting
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of ministers of finance.
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That was my inaugural
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Eurogroup meeting as it's called.
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At the end of that meeting,
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which was a soul-destroying meeting,
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I came out dazed, confused,
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with a threat that the banks
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of our nation would be closed within five days.
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These are seriously stressful moments.
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I called my secretary
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and said, "Fotini, get me a transcript of the ten-
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and-a-half hours. I would have to inform the Cabinet,
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the Prime Minister, and I have to confess
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that after ten and a half hours.
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of course I remember what had happened, but not verbatim.
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When you are under so much psychological
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and physical stress, there are things - you
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forgot who exactly said what
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and the order in which it was said.
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So I asked for a transcript, a minutes of the meeting.
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And she called me ten minutes later saying, "Minister,
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I was told that there are no minutes, no records at all."
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And then it's wall-to-wall coverage globally and
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a version of the truth that has nothing to do
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with the truth, is registered as the truth,
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and I have absolutely no way of defending myself.
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So after a while, I started recording every meeting.
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I watched the transmission of fake news
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during my period in office.
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There's been a very serious misunderstanding,
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which I hope was not intentional by members of the press.
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Not everybody, thankfully. You
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won't deal with the Troika.
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Is that right? You will not deal with the institutions - No it is not -
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that are your creditors - By the way, I was listening
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to your report, and I have to tell you, you know,
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I'm a great BBC fan,
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I've never listened to such an inaccurate report.
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I would be in a meeting in some godforsaken,
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neon-lit room in Brussels with the creditors'
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representatives, Europe ministers,
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and so on.
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Some of my interlocutors or their minions would
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send a message to one
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or two key journalists waiting outside,
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representing the Wall Street Journal, the Financial Times.
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This was genuinely fake news, reporting
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that I said something which I had not said
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or that something was said to me
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which not was not said to me.
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Those journalists would not necessarily print it in the
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newspaper, but they would tweet it -
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that we heard that this was what Varoufakis said or what was said
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to Varoufakis. Very soon after that, it was printed all over the world.
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It was reproduced as fact and then they would print it,
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reporting that the world press is saying this, not
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reporting their own sources.
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There is no democratic deficit in Brussels.
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It's like saying that there is a deficit
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of oxygen on the moon.
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There's no deficit of oxygen on the moon,
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there's just no oxygen. Similarly,
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there's no democracy in Brussels.
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Brussels is a cartel.
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European countries fought long
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and hard to establish democratic regimes. And we have them,
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and it's a magnificent thing that we have functioning
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democracies, at least formally speaking.
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But at the same time, we created the European Union.
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We brought together these nation states
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and pushed all the important decisions onto Brussels.
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The first version of the European Common Market
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of the European Union was the so-called
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European Communities of Coal and Steel, exactly like OPEC.
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But the problem with a cartel is
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that it is inimical to democracy.
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OPEC could never be democratic.
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The only way of fixing prices is through an agreement
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between oligarchs.
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So a pan-European cartel, which is
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what the European Union was, was always meant
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and always designed to be a democracy-free zone.
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To legitimize that cartel, at some point it was important
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to create something called the European Parliament,
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which is, however, the only parliament in the history
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of the world that doesn't have the capacity
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to initiate legislation, which makes it a joke really...
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just a rubber stamp.
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Now, one of the things that you mentioned is that they had
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imposed a four
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and a half percent primary surplus.
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No country's ever had that kind of a primary surplus
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for the length of time that was dictated.
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How did the Greek government,
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the previous Greek government sign a program like that?
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And how could the ECB
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and the Troika propose a program like that?
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And one more question. Are they serious about doing that?
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Have they changed their mind? Now?
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I think it's the politics of denial.
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The greatest embarrassment for the Troika officials that I
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worked with was that the proposals I was putting to them
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would've normally been the kinds
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of proposals they would be putting forward.
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For instance, when it came
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to the debt restructuring proposals, the debt swaps,
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I had worked on them with people like Thomas Mayer,
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who used to be the chief economist of Deutsche Bank,
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of all places, of all institutions.
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What if we were to admit that an unpayable debt
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cannot be paid and it has to be restructured?
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This is something that Wall Street lawyers do every day.
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So why were they insisting on rejecting these proposals
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and sticking to a programme which they themselves understood
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to be catastrophic for Greece
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and not particularly helpful to them?
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Amartya Sen put it brilliantly to me once. He said, "Your
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trouble, Yanis, was that you were negotiating
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with creditors who did not want their money back."
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The beauty of it all was
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that this interpretation was offered to me by
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one of the top officials of the Troika, Christine Lagarde,
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the managing director of the International Monetary Fund,
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who in our first face-to-face, one-on-one meeting
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at some point, astounded me by admitting that the programme
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that she and the rest of the Troika
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who were imposing upon Greece all those years,
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and which they still wanted to impose upon me
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and my government, could not work.
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This is verbatim. She said,
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"Yanis, of course you're right.
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This programme cannot work."
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This is not to say that it's difficult to make it work.
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It's an impossibility theorem.
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You know, deep down, I don't know whether you have
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00:16:29,085 --> 00:16:30,325
this, you probably don't.
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You're Noam Chomsky, you wouldn't.
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But I'm less experienced in this game
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of clashing with powers that be at that level.
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And deep down, I think if I psychoanalyse myself,
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I really wanted to think that the adults know
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what they're doing and that I'm the child that is recalcitrant,
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kicking and screaming.
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But deep down, the adults,
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the people in power at the top of the IMF know
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what they're doing, and my complaints
275
00:16:58,985 --> 00:17:01,925
and protestations, maybe they're not
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00:17:01,945 --> 00:17:03,085
completely accurate.
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Maybe they know more than I think they do.
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But when these people turn around to me
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and say, "You're right, it can't work.
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What we are trying to impose upon your nation can't work.
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00:17:13,145 --> 00:17:18,045
But Yanis, you must understand we have
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invested so much political capital in this programme,
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we can't go back.
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And your credibility, my credibility,
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00:17:26,635 --> 00:17:27,765
depends on accepting it."
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00:17:28,105 --> 00:17:30,045
Of course, I didn't give a damn about my credibility
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00:17:30,045 --> 00:17:31,965
with Christine Lagarde or any of these people.
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All I cared about was my credibility with the voters, the Greeks
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who were languishing in debtors' prison.
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Well, that's only 10% of the story.
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00:17:50,785 --> 00:17:53,085
Look, the IMF is the worst of the worst.
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They're throwing a spanner in the works. My interpretation is they're being
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so recalcitrant and so obnoxious,
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they can't possibly want a solution
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00:18:03,465 --> 00:18:05,365
and they can't possibly want a default either.
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It seems to me that they want out.
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You know, the Eurogroup, by the way, doesn't exist.
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Did you know that? I didn't know it.
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I found out that it doesn't exist when in the Eurogroup,
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I contested a decision made
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by its president.
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I contested the legality of that decision.
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And he turned and he said, "Oh, I can do it."
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00:18:34,965 --> 00:18:37,465
I put my hand up again. I said, "Excuse me.
305
00:18:37,545 --> 00:18:38,985
I would like a legal opinion from the
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00:18:38,985 --> 00:18:40,585
secretariat as to whether this is true.
307
00:18:41,455 --> 00:18:43,795
I'm a minister of finance. I belong to the Eurogroup.
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I have the right to ask for legal advice
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from the Eurogroup secretariat."
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There was a kerfuffle for about 10, 15 minutes.
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They were sort of talking on the phone
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and trying to find out what to answer. And the answer,
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00:18:57,735 --> 00:18:58,755
the official answer, came.
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00:18:59,135 --> 00:19:01,395
And the official answer was, lo
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and behold, "Minister,
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00:19:05,875 --> 00:19:07,775
the Eurogroup does not exist in law.
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00:19:09,285 --> 00:19:11,655
It's not mentioned in any European Union treaty.
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00:19:11,655 --> 00:19:14,345
It's an informal meeting and
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therefore its president can do anything he likes."
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00:19:30,895 --> 00:19:35,105
Today's Eurogroup meeting condemned the awfully inaccurate
321
00:19:35,105 --> 00:19:38,225
and unhelpful supposed leaks that
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00:19:39,445 --> 00:19:43,025
marred the aftermath of the previous Eurogroup meeting in Riga.
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00:19:43,835 --> 00:19:46,905
Thank you. Now I'd like to turn to Yanis.
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00:19:48,285 --> 00:19:51,865
Let me start also with a comment on leaks.
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00:19:52,605 --> 00:19:55,985
It would be good if there were none,
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00:19:56,565 --> 00:19:57,705
but if there are leaks,
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00:19:58,165 --> 00:19:59,385
it would be good if they were accurate.
328
00:20:00,665 --> 00:20:02,505
I remember years and years
329
00:20:02,505 --> 00:20:06,425
before entering politics, how grateful I was to people like
330
00:20:06,445 --> 00:20:09,145
Julian Assange and WikiLeaks. As a young man,
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00:20:09,825 --> 00:20:14,425
I was terrified by 1984, George Orwell's book. I felt,
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00:20:14,605 --> 00:20:16,945
my goodness, this is a very prescient,
333
00:20:16,945 --> 00:20:19,225
very prophetic book because technology is going
334
00:20:19,225 --> 00:20:22,465
to make it absolutely possible, inevitable
335
00:20:23,295 --> 00:20:25,545
that Big Brother will have a way of knowing
336
00:20:25,755 --> 00:20:27,785
where I am at every point in time,
337
00:20:27,855 --> 00:20:29,545
what I'm saying, who am I speaking with,
338
00:20:29,565 --> 00:20:32,745
and so on and so forth. And that is a terrifying thought.
339
00:20:32,825 --> 00:20:35,665
I mean this is our reality, as we all know.
340
00:20:37,805 --> 00:20:41,505
And I could not imagine what would stop tyranny from
341
00:20:42,195 --> 00:20:44,065
developing on the basis of Big Brother.
342
00:20:45,255 --> 00:20:46,505
What could stop Big Brother?
343
00:20:47,345 --> 00:20:51,495
And the whole notion of WikiLeaks gave me hope long
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00:20:51,495 --> 00:20:53,655
before it became well-known internationally.
345
00:20:54,315 --> 00:20:57,535
And what is that notion? That we take the technologies
346
00:20:57,635 --> 00:21:02,455
of Big Brother and we convert them into a gigantic mirror
347
00:21:02,885 --> 00:21:04,735
that we turn towards the face of Big Brother,
348
00:21:05,555 --> 00:21:07,135
so that Big Brother knows that
349
00:21:07,235 --> 00:21:09,415
as he's watching us, we are watching him.
350
00:21:11,245 --> 00:21:15,135
That idea liberated me from the fear of technology
351
00:21:15,475 --> 00:21:17,215
and the fear of Big Brother.
352
00:21:18,325 --> 00:21:20,895
Once, he called me and he said, "I've got something very
353
00:21:21,415 --> 00:21:22,815
interesting for you to hear."
354
00:21:23,555 --> 00:21:25,495
And I went to the embassy
355
00:21:25,795 --> 00:21:29,935
and he played a tape of a discussion that was leaked
356
00:21:29,935 --> 00:21:33,655
to WikiLeaks from unknown sources between
357
00:21:35,165 --> 00:21:38,135
apparatchiks of the International Monetary Fund, where
358
00:21:38,805 --> 00:21:41,775
they were confirming everything I was saying about the Greek
359
00:21:41,775 --> 00:21:45,695
programme and the Greek austerity with, actually, a degree
360
00:21:45,695 --> 00:21:50,255
of passion and a degree of indignity that the IMF, Germany,
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00:21:50,915 --> 00:21:53,255
the German government of Germany, the German government,
362
00:21:53,275 --> 00:21:55,135
the European Central Bank, were doing this
363
00:21:55,675 --> 00:21:56,775
to the poor Greek people.
364
00:21:57,475 --> 00:21:58,735
We have to break down these barriers
365
00:21:59,115 --> 00:22:01,415
and we have to turn the mirror towards
366
00:22:01,415 --> 00:22:02,455
the face of Big Brother.
367
00:22:04,595 --> 00:22:08,415
But what tangibly can you do going forward?
368
00:22:08,805 --> 00:22:09,805
Okay.
369
00:22:09,815 --> 00:22:14,215
I would like us to demand collectively as Europeans,
370
00:22:14,355 --> 00:22:17,175
as European citizens, that we shall all agree
371
00:22:17,175 --> 00:22:20,535
that every time Cameron, Tsípras, Merkel meet,
372
00:22:21,125 --> 00:22:24,535
that their meetings should be live-streamed
373
00:22:25,515 --> 00:22:27,455
and we should be able to listen to what they say.
374
00:22:32,195 --> 00:22:37,135
How about that? How about demanding
375
00:22:37,685 --> 00:22:42,255
that the European Central Bank governing
376
00:22:43,225 --> 00:22:47,215
board meetings record minutes
377
00:22:47,985 --> 00:22:49,735
which are then published on the internet.
378
00:22:51,555 --> 00:22:55,615
It's like a clapometer. We don't need new
379
00:22:55,615 --> 00:22:56,895
institutions or treaties for this.
380
00:22:56,895 --> 00:22:59,415
We can agree this for next week, tomorrow.
381
00:23:00,115 --> 00:23:04,895
An informed body politic is a powerful body politic, which
382
00:23:05,725 --> 00:23:08,055
disempowers those politicians
383
00:23:08,395 --> 00:23:09,575
who are running agendas
384
00:23:09,685 --> 00:23:11,615
against the interest of the majority.
385
00:23:11,985 --> 00:23:14,775
Mr Varoufakis, you've been in virtual deadlock for months now.
386
00:23:14,835 --> 00:23:17,335
Isn't the truth that you're going to have
387
00:23:17,335 --> 00:23:19,335
to row back on some of the promises you made
388
00:23:19,335 --> 00:23:21,495
to get elected in order to reach agreement
389
00:23:21,495 --> 00:23:22,815
with Greece's creditors?
390
00:23:23,555 --> 00:23:26,375
We have compromised to a very large extent.
391
00:23:27,235 --> 00:23:29,455
Is there going to be a redistribution of the burdens
392
00:23:29,455 --> 00:23:32,055
of the crisis from the shoulders of the weak,
393
00:23:33,075 --> 00:23:35,975
who can't bear them anymore, onto the shoulders of those
394
00:23:36,075 --> 00:23:38,255
who were partly responsible for causing the crisis
395
00:23:38,355 --> 00:23:40,175
and who are not burdened
396
00:23:40,175 --> 00:23:41,535
by those burdens at all at the moment?
397
00:23:46,345 --> 00:23:47,765
I should make an announcement,
398
00:23:47,765 --> 00:23:50,485
give a press conference, as I always do after Eurogroup,
399
00:23:50,485 --> 00:23:51,845
and then the Prime Minister should come out
400
00:23:52,425 --> 00:23:54,845
and declare that the next day there will be no payment
401
00:23:55,465 --> 00:23:58,565
to the IMF and call our partners
402
00:23:58,565 --> 00:24:01,405
and institutions to urgent discussions on
403
00:24:01,405 --> 00:24:02,525
how to resolve this situation.
404
00:24:02,525 --> 00:24:03,645
That was my recommendation.
405
00:24:04,705 --> 00:24:07,765
Before the conversation could come to a conclusion,
406
00:24:07,905 --> 00:24:12,005
the phone rings and it's the Bank of Greece, Yannis Stournaras, who
407
00:24:12,645 --> 00:24:14,285
absolutely by accident
408
00:24:14,305 --> 00:24:16,365
and miraculously, happened
409
00:24:16,505 --> 00:24:19,645
to find 650 millions for us.
410
00:24:20,755 --> 00:24:24,085
Yeah? Isn't it astonishing?
411
00:24:24,515 --> 00:24:27,565
What, what a stroke of luck at the very last moment.
412
00:24:30,445 --> 00:24:31,725
I mean, they think we're complete idiots,
413
00:24:31,975 --> 00:24:35,405
don't they. I said, "Look, this money never existed.
414
00:24:35,435 --> 00:24:38,925
They created it." Alexis is very smart. You know,
415
00:24:38,925 --> 00:24:40,765
he said, "Bastards.
416
00:24:41,865 --> 00:24:43,405
Now they're making it impossible
417
00:24:44,075 --> 00:24:45,405
that we should default on them."
418
00:24:50,545 --> 00:24:55,325
So we have been dragged further and further into a labyrinth.
419
00:24:55,675 --> 00:24:56,645
This is what's going on.
420
00:25:04,425 --> 00:25:06,965
It is quite clear that the reason why we had
421
00:25:07,485 --> 00:25:11,805
a deposit flight was because every day, even
422
00:25:11,805 --> 00:25:15,085
before we were elected, Greeks were being told
423
00:25:15,235 --> 00:25:17,125
that if we are elected and if we stay in power
424
00:25:17,125 --> 00:25:20,405
for more than a few days, the ATMs will cease functioning.
425
00:25:24,995 --> 00:25:25,745
Right on cue.
426
00:25:26,245 --> 00:25:27,425
But this is Brussels, right?
427
00:25:27,845 --> 00:25:32,185
So... I've been asked whether the people
428
00:25:32,575 --> 00:25:34,665
manning and womanning those institutions,
429
00:25:35,655 --> 00:25:38,585
the apparatchiks, the bureaucrats, whether they're awful
430
00:25:38,605 --> 00:25:40,305
people, evil people.
431
00:25:41,445 --> 00:25:42,905
The answer is very clear:
432
00:25:42,965 --> 00:25:45,225
no, they're not. They're not even that
433
00:25:45,815 --> 00:25:49,345
because, let's face it, truly evil people are interesting.
434
00:25:50,935 --> 00:25:54,545
Homo Bureaucraticus is a banal creature.
435
00:25:55,415 --> 00:25:57,865
Homo Bureaucraticus comes to you with a list,
436
00:25:58,725 --> 00:26:00,745
and boxes that they need to be ticked.
437
00:26:02,605 --> 00:26:05,745
And the whole conversation, which has a semblance
438
00:26:05,745 --> 00:26:07,425
of a conversation, is not really a conversation -
439
00:26:07,845 --> 00:26:09,705
it is an algorithm, the purpose of which is
440
00:26:09,705 --> 00:26:12,705
to extract all those demands, all those
441
00:26:13,055 --> 00:26:14,305
concessions from you.
442
00:26:15,765 --> 00:26:19,465
So in the end, the people that you're dealing
443
00:26:19,465 --> 00:26:20,785
with are like robots.
444
00:26:20,785 --> 00:26:23,705
They're like automata. They're neither good nor bad,
445
00:26:24,245 --> 00:26:27,865
and they had effectively to be bleached of human content
446
00:26:28,485 --> 00:26:30,505
in order to be performing their duties.
447
00:26:30,505 --> 00:26:31,785
There is a Darwinian process
448
00:26:31,785 --> 00:26:35,505
of selection within those institutions that selects for banality.
449
00:26:35,725 --> 00:26:37,545
And even if one is not banal, one has
450
00:26:37,545 --> 00:26:41,425
to become banal in order to rise to the position
451
00:26:41,445 --> 00:26:44,005
of power that is necessary for them to be facing
452
00:26:44,035 --> 00:26:45,965
someone like a minister of finance.
453
00:26:47,185 --> 00:26:51,645
And, as a politician who has been elected to serve the public
454
00:26:52,585 --> 00:26:56,725
facing them, it is of the essence that you bypass them,
455
00:26:57,455 --> 00:27:00,225
that you go beyond the banal
456
00:27:01,245 --> 00:27:03,105
and you meet genuinely interesting people
457
00:27:03,765 --> 00:27:05,625
who are at the top of those institutions.
458
00:27:05,625 --> 00:27:09,265
People like Christine Lagarde, like Wolfgang Schäuble,
459
00:27:09,405 --> 00:27:13,985
who were nastier in many important ways, or nicer.
460
00:27:14,285 --> 00:27:15,985
But at least they were human beings.
461
00:27:17,695 --> 00:27:21,625
It's my considered opinion that now the agreement has
462
00:27:21,625 --> 00:27:25,145
to be reached at a level of political leaders, heads
463
00:27:25,145 --> 00:27:27,225
of state, prime ministers, chancellors,
464
00:27:27,885 --> 00:27:31,685
Greeks need a missing ingredient: hope.
465
00:27:33,685 --> 00:27:36,565
A speech of hope for Greece is precisely that
466
00:27:36,565 --> 00:27:39,565
which would take and make all the difference now.
467
00:27:39,745 --> 00:27:42,765
A speech of hope for Greece
468
00:27:43,415 --> 00:27:45,205
would benefit our creditors
469
00:27:45,825 --> 00:27:49,165
as our renaissance will eliminate the probability
470
00:27:49,185 --> 00:27:51,165
of defaulting on their loans.
471
00:27:52,705 --> 00:27:54,325
Who should deliver the speech of hope?
472
00:27:55,715 --> 00:27:57,445
Well, I think it should be the German chancellor.
473
00:28:01,705 --> 00:28:06,565
So Tsípras was obviously banking on Merkel
474
00:28:06,665 --> 00:28:07,845
to be the good cop.
475
00:28:08,035 --> 00:28:10,365
Usually she's the one that is full
476
00:28:10,365 --> 00:28:14,805
of understanding. This time she said, "Oh, by the way,
477
00:28:15,345 --> 00:28:17,885
you need to have a surplus, primary surplus,
478
00:28:17,885 --> 00:28:19,205
of 2.5% next year.
479
00:28:19,905 --> 00:28:22,845
No less than that." It's ridiculous.
480
00:28:43,185 --> 00:28:46,885
You may have noticed that in my presentation, I try
481
00:28:46,885 --> 00:28:49,965
to be positive, to talk about a possible agreement.
482
00:28:49,985 --> 00:28:51,205
An agreement that we're tabling,
483
00:28:51,205 --> 00:28:54,525
which we deeply believe that if it was accepted,
484
00:28:55,185 --> 00:28:58,645
or it became the foundation upon which an agreement is
485
00:28:58,645 --> 00:29:01,285
based, a final agreement, a compromise,
486
00:29:02,305 --> 00:29:04,445
we would make this crisis go away.
487
00:29:05,425 --> 00:29:09,845
In this frame of mind, I'm going to refuse to discuss
488
00:29:10,475 --> 00:29:11,645
speculation about failure.
489
00:29:24,095 --> 00:29:28,925
There are moments when your interlocutor surprises you.
490
00:29:31,145 --> 00:29:33,205
And that moment in my relationship
491
00:29:33,205 --> 00:29:36,405
with the German finance minister, Wolfgang Schäuble, came when
492
00:29:38,265 --> 00:29:40,845
he broke with the tradition of the previous months,
493
00:29:41,595 --> 00:29:44,885
when he was effectively instructing me to do
494
00:29:44,885 --> 00:29:48,365
as I'm told. It came when I asked him a simple question.
495
00:29:48,385 --> 00:29:51,285
"So let's say, Wolfgang, that I sign on the dotted line here.
496
00:29:52,185 --> 00:29:53,725
Do you think this would be end of the crisis?
497
00:29:54,965 --> 00:29:58,005
Because my fear is that if I sign on the dotted line,
498
00:29:58,515 --> 00:30:00,325
this crunch that we just experienced,
499
00:30:00,385 --> 00:30:02,765
and which we're experiencing now, is simply going
500
00:30:02,765 --> 00:30:03,765
to repeat itself in six months'
501
00:30:03,765 --> 00:30:07,365
time, only it will be worse." And he agreed.
502
00:30:08,745 --> 00:30:10,605
And I thought, oh my God, he's agreeing.
503
00:30:11,865 --> 00:30:13,845
If if he's agreeing, what am I going to say?
504
00:30:17,185 --> 00:30:18,685
And then he added,
505
00:30:20,605 --> 00:30:23,745
"But you realize that I cannot be seen
506
00:30:25,425 --> 00:30:29,525
to be acquiescent with you."
507
00:30:30,515 --> 00:30:32,795
And what he meant, it was clear
508
00:30:33,485 --> 00:30:36,945
- and there was a logic to it as well - that if
509
00:30:38,325 --> 00:30:42,185
it was revealed that the two of us had struck an agreement
510
00:30:42,375 --> 00:30:47,265
that was mutually beneficial, that would be signalled
511
00:30:47,265 --> 00:30:50,105
to the good people of Spain: that if they voted
512
00:30:50,245 --> 00:30:53,105
for a government like ours, they could get a good deal
513
00:30:53,125 --> 00:30:55,385
for Spain; to the good people of Ireland;
514
00:30:56,165 --> 00:30:57,465
to the good people of Italy.
515
00:30:58,615 --> 00:31:00,985
Finally, to the good people of France.
516
00:31:02,205 --> 00:31:04,545
And Wolfgang was clear on this.
517
00:31:05,485 --> 00:31:08,465
He wanted the Troika in Paris,
518
00:31:09,925 --> 00:31:11,945
and we Greeks were collateral damage.
519
00:31:12,215 --> 00:31:13,305
What is really going on?
520
00:31:13,715 --> 00:31:17,945
There is a titanic battle between, on the one hand,
521
00:31:18,005 --> 00:31:19,465
the IMF and Berlin.
522
00:31:19,745 --> 00:31:21,625
I mean, there is that. And at the same time there is
523
00:31:21,635 --> 00:31:22,665
Paris versus Berlin.
524
00:31:22,925 --> 00:31:24,425
So Greece is a little mouse
525
00:31:24,425 --> 00:31:27,585
that is being squashed while the elephants are tussling
526
00:31:27,585 --> 00:31:29,185
trying to work out their differences.
527
00:31:30,585 --> 00:31:33,505
I said to him, "Wolfgang, I want to ask you a favour.
528
00:31:34,445 --> 00:31:36,825
Can you please stop telling me what to do?
529
00:31:37,365 --> 00:31:38,385
And just for 10 minutes
530
00:31:38,655 --> 00:31:40,465
have a conversation with me as a friend.
531
00:31:42,165 --> 00:31:45,345
And the question is this: if you were in my shoes,
532
00:31:46,075 --> 00:31:47,305
would you sign that document?"
533
00:31:48,125 --> 00:31:50,065
He didn't answer for a good while.
534
00:31:50,065 --> 00:31:51,625
It felt like centuries to me.
535
00:31:51,805 --> 00:31:53,225
It was probably a couple of minutes.
536
00:31:54,205 --> 00:31:55,425
Two minutes can be a very,
537
00:31:55,695 --> 00:31:58,025
very long time under the circumstances.
538
00:31:59,285 --> 00:32:01,865
And he turned back to me and he said, "No, I wouldn't."
539
00:32:04,085 --> 00:32:07,145
And I said, "Okay, so what do we do?"
540
00:32:08,325 --> 00:32:13,105
And he just raised his shoulders in a state of despondency,
541
00:32:13,485 --> 00:32:15,665
of genuine fatigue.
542
00:32:16,625 --> 00:32:19,865
A few days later, in a Eurogroup meeting, during a break,
543
00:32:20,845 --> 00:32:23,025
he actually congratulated me for not signing.
544
00:32:23,245 --> 00:32:25,625
He said to me, these are words he used,
545
00:32:26,165 --> 00:32:27,905
"If you signed, you would be answerable
546
00:32:27,905 --> 00:32:29,465
to your people."
547
00:32:30,165 --> 00:32:32,545
Today, the Greek government has huge challenges.
548
00:32:32,705 --> 00:32:34,505
I would never change my job with him.
549
00:32:35,835 --> 00:32:36,465
I'm quite happy.
550
00:32:41,545 --> 00:32:44,645
To make the transition from academic to politician,
551
00:32:45,095 --> 00:32:47,165
there had to be a major crisis.
552
00:32:50,345 --> 00:32:52,245
I'm only an accidental politician.
553
00:32:53,085 --> 00:32:54,805
I only threw my hat in the proverbial ring
554
00:32:55,155 --> 00:32:58,405
because of the intensity of the crisis
555
00:33:03,385 --> 00:33:06,125
and the opportunity to put my money where my mouth was.
556
00:33:11,795 --> 00:33:15,445
Once you make the transition from academia to politics,
557
00:33:16,645 --> 00:33:20,445
suddenly there's no possibility of genuine dialogue.
558
00:33:21,085 --> 00:33:24,285
I was expecting that when finance ministers get together,
559
00:33:25,745 --> 00:33:28,645
we discuss finance, we discuss economics.
560
00:33:30,055 --> 00:33:33,405
Never did we have a discussion on those matters. Not once.
561
00:33:34,505 --> 00:33:37,405
And when, because I was representing a country whose
562
00:33:37,405 --> 00:33:38,845
political economy was dying,
563
00:33:40,155 --> 00:33:44,245
when I brought these issues to the table, I was looked at
564
00:33:44,745 --> 00:33:49,565
as an outsider, that impolitely barged in demanding
565
00:33:49,565 --> 00:33:52,525
to have a conversation that was beyond the pale.
566
00:33:53,505 --> 00:33:55,365
We would have a meeting that would last ten hours,
567
00:33:57,105 --> 00:33:58,405
and we would spend one,
568
00:33:58,405 --> 00:34:01,805
one and a half hours with little speeches, monologues
569
00:34:02,545 --> 00:34:05,485
and then the rest of the time, eight hours, nine hours,
570
00:34:06,145 --> 00:34:10,725
was spent negotiating. What? The communique.
571
00:34:12,455 --> 00:34:15,025
Arguing and nitpicking
572
00:34:15,855 --> 00:34:17,465
regarding particular words
573
00:34:17,495 --> 00:34:19,145
that could go in the press release.
574
00:34:19,975 --> 00:34:24,065
That contrast between academic life, where you live
575
00:34:24,125 --> 00:34:27,985
or die on the basis of the quality of your opinions,
576
00:34:28,685 --> 00:34:33,545
to the Eurogroup, where ideas really don't get discussed,
577
00:34:33,935 --> 00:34:35,905
even policies do not get discussed,
578
00:34:36,625 --> 00:34:41,265
I have to say, I had not expected that.
579
00:34:41,815 --> 00:34:43,905
Unfortunately, agreement has not been reached as yet.
580
00:34:44,085 --> 00:34:45,825
But there will come a point where Greece will either have
581
00:34:45,825 --> 00:34:47,825
to compromise or it will have to default.
582
00:34:48,085 --> 00:34:50,425
And that is when you'll compromise, isn't
583
00:34:50,425 --> 00:34:51,425
It? We have compromised enormously
584
00:34:51,425 --> 00:34:52,545
But you have to -
585
00:34:52,765 --> 00:34:55,585
But we're not going to sign on an agreement
586
00:34:56,015 --> 00:34:57,705
that makes this crisis worse.
587
00:34:58,165 --> 00:35:01,345
We are going to compromise, compromise,
588
00:35:01,345 --> 00:35:03,185
compromise without being compromised.
589
00:35:03,855 --> 00:35:04,665
That is what we're going to do.
590
00:35:35,505 --> 00:35:36,505
What was your strategy?
591
00:35:36,505 --> 00:35:37,845
What was your long term plan?
592
00:35:42,545 --> 00:35:47,395
My strategy was to bombard them with moderate proposals
593
00:35:47,585 --> 00:35:50,985
regarding the debt, proposals that were moderate,
594
00:35:52,245 --> 00:35:54,505
technocratically advanced,
595
00:35:55,525 --> 00:35:57,865
but at this very same time that did the job
596
00:35:58,125 --> 00:36:02,265
of getting us out of debtors' prison.
597
00:36:03,055 --> 00:36:07,025
To back this strategy, there were a couple
598
00:36:07,025 --> 00:36:08,385
of tactics involved.
599
00:36:10,085 --> 00:36:11,305
One was a deterrence plan.
600
00:36:12,425 --> 00:36:15,145
I knew that the way they would try to defeat us,
601
00:36:16,485 --> 00:36:19,625
to asphyxiate us, would be through closing down the banks.
602
00:36:20,285 --> 00:36:24,465
So I had a plan for deterring the closure of the banks.
603
00:36:25,615 --> 00:36:27,385
This involved primarily two things.
604
00:36:27,765 --> 00:36:31,265
Number one was the threat that if you close down my banks,
605
00:36:31,525 --> 00:36:34,425
I'm going to haircut the bonds that are owed
606
00:36:34,425 --> 00:36:35,665
by the Central Bank of Europe.
607
00:36:36,085 --> 00:36:39,145
And if I do that, I know you're going to have huge problems
608
00:36:40,625 --> 00:36:42,305
maintaining Italy within the Euro
609
00:36:42,305 --> 00:36:45,825
because of a legal dispute with the Bundesbank,
610
00:36:46,045 --> 00:36:47,385
the Central Bank of Germany.
611
00:36:48,045 --> 00:36:49,145
The second part of it was
612
00:36:49,145 --> 00:36:52,065
to create a parallel payment system that I would be able to
613
00:36:52,585 --> 00:36:57,105
activate outside the banking sector, outside the financial
614
00:36:57,285 --> 00:37:00,345
circuits that would allow Greeks to transact
615
00:37:00,345 --> 00:37:03,385
with one another using the website
616
00:37:04,365 --> 00:37:06,385
of the Greek tax office.
617
00:37:13,965 --> 00:37:16,345
Why not threaten to take Greece out of the Euro?
618
00:37:24,805 --> 00:37:26,665
The moment you start talking about leaving the Euro
619
00:37:27,725 --> 00:37:32,265
in public, it becomes a self-fulfilling prophecy
620
00:37:33,935 --> 00:37:36,025
because the Euro is a very fragile thing.
621
00:37:36,095 --> 00:37:37,345
Even though it looks hard
622
00:37:38,245 --> 00:37:42,705
and hard-nosed, all it takes for the Euro
623
00:37:42,725 --> 00:37:46,145
to collapse is for a critical mass of people to think
624
00:37:46,145 --> 00:37:49,265
that it's going to collapse. If a sufficient
625
00:37:49,265 --> 00:37:51,345
number of people start thinking that Greece is out
626
00:37:51,345 --> 00:37:52,625
of the Euro, Greece is out of the Euro
627
00:37:52,625 --> 00:37:53,785
before you even know it.
628
00:37:55,405 --> 00:37:59,025
So for me, getting out of the Euro was not the plan,
629
00:37:59,285 --> 00:38:02,305
was not the objective. For others, it should have been.
630
00:38:02,365 --> 00:38:03,585
It wasn't for me. For me, it was
631
00:38:03,585 --> 00:38:04,705
a debt restructure within the Euro.
632
00:38:05,605 --> 00:38:08,105
Of course, I was prepared to contemplate getting out
633
00:38:08,105 --> 00:38:09,745
of the Euro if needs be.
634
00:38:10,925 --> 00:38:13,865
But if this is not your aim,
635
00:38:14,365 --> 00:38:17,825
you should not speak the languages of Grexit.
636
00:38:17,895 --> 00:38:20,785
Toying with Grexit, which is something we don't do,
637
00:38:21,245 --> 00:38:22,945
we are refusing to discuss it
638
00:38:23,185 --> 00:38:26,745
because as I've said before, even worrying about it is like
639
00:38:27,225 --> 00:38:28,425
worrying about being hit
640
00:38:28,425 --> 00:38:31,425
by a comet in a universe in which comets are attracted
641
00:38:31,425 --> 00:38:33,305
to you if you're worried about them.
642
00:38:36,045 --> 00:38:38,085
Actually, it was put to me by somebody very high up in the
643
00:38:38,125 --> 00:38:42,125
IMF that the only alternative to this slow
644
00:38:43,225 --> 00:38:46,805
Chinese torture kind of process is to do
645
00:38:46,805 --> 00:38:47,805
what the Poles did,
646
00:38:48,185 --> 00:38:51,805
what Balcerowicz did in 1990s, which is to say,
647
00:38:52,135 --> 00:38:53,445
"We're not playing ball here.
648
00:38:53,495 --> 00:38:54,965
We're not going to go through this process.
649
00:38:55,505 --> 00:38:57,205
But instead, here is a document,
650
00:38:59,175 --> 00:39:02,165
which is our national plan for revival,
651
00:39:02,445 --> 00:39:03,485
recovery, growth, whatever."
652
00:39:05,985 --> 00:39:07,925
And ever since,
653
00:39:08,075 --> 00:39:11,205
I've been working on a document like that. Now I have one
654
00:39:12,505 --> 00:39:14,685
and I've been trying to convince the rest of the cabinet
655
00:39:14,875 --> 00:39:17,125
that we should adopt this strategy.
656
00:39:17,925 --> 00:39:22,325
I was in a minority, but even though we gave a great deal,
657
00:39:23,275 --> 00:39:25,325
the concessions were just, for me,
658
00:39:25,325 --> 00:39:27,285
they were too many. Too many, and too deep.
659
00:39:28,515 --> 00:39:30,725
Even then,
660
00:39:30,725 --> 00:39:33,605
they wouldn't even release some liquidity.
661
00:39:48,735 --> 00:39:53,075
My Troika interlocutors, from possibly the first week,
662
00:39:54,105 --> 00:39:57,595
they surmised I'm not somebody they can do business with,
663
00:39:58,215 --> 00:39:59,835
and they had to get rid of me.
664
00:40:00,495 --> 00:40:04,115
It was the only way of maintaining the
665
00:40:04,925 --> 00:40:07,435
fraudulent bankruptcy concealment process.
666
00:40:09,255 --> 00:40:10,395
So I had to go.
667
00:40:10,815 --> 00:40:12,155
It was clear from the beginning,
668
00:40:12,415 --> 00:40:15,835
and they tried a variety of ways until they succeeded.
51261
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