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Oct 21

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Adults in the Room: My Battle with Europe’s Deep Establishment Yanis Varoufakis

Dazzling, Incendiary, Cynical and Diabolical, Yanis Varoufakis’ explosive memoir detailing his short sojourn as the Finance Minister of Greece during the period when his country was a roiling cauldron of financial ruin and political excesses, makes for some essential reading. “Adults in the Room: My Battle with Europe’s Deep Establishment” (“The Book”) pierces the veil behind which the troika comprising the International Monetary Fund (“IMF”), the European Central Bank (“ECB”) and the European Commission (“EC”) play out their convoluted, conniving and catastrophic machinations which to a citizen and the Finance Minister of a country close to financial ruin alike may have seemed like an allegorical ‘danse macabre’.

An ‘outsider’, Varoufakis was forced by a contrivance of circumstance and principle to join politics, as he accepted an offer from the leader of the Left Wing Party Syriza, Alexis Tsipras to head the Finance Ministry after a rousing victory in the elections primarily coming at the back of a resolution to stand firm against a Memorandum Of Understanding foisted by the European troika upon Greece. This MOU which had austerity for a spine proposed to squeeze the last penny out of every Greek citizen (excepting those who really mattered – the rich who had bolted or at least whose cash had – to inaccessible safe havens) on the pretext of a bail out.

Varoufakis was in power for all of 5 months. The Book unfurls the controversies, unravels the treacheries and exposes unholy alliances and back room dealings which ultimately put paid to the hopes of Greece standing firm against the troika and collapsing in a heap as a run on the Greek banks ultimately triggered a capitulation to the wishes of the troika. The events described by Yanis Varoufakis in his book make even a sombre Shakespearean tragedy read like a Christmas Carol! Deception and deviousness both within Varoufakis’ own party and the corridors of hotel lobbies, confines of conference rooms and chambers of commerce where the troika conducted business, highlights in a stark and uncompromising fashion the meaning of the term futility.

The whole book can be encapsulated in the following ludicrous mechanism, nay shenanigan adopted by the troika to ‘enable’ Greece to repay a loan due to the ECB. This was before Varoufakis assumed duties as a Finance Minister:

 

  1. The ECB granted Greece’s bankrupt banks the right to issue new IOUs with a face value ofEURO5.2 billion – worthless pieces of paper, given that the banks’ coffers were empty;
  2. As no sane person would pay money to buy these IOUs, the bankers took them to the financeMinister, Stournaras, who stamped on them the bankrupt state’s copper-bottomed guarantee - in reality a useless gesture since no bankrupt entity (state) can meaningfully guarantee the IOUs of another bankrupt entity (banks);
  3.  The bankers then took their worthless IOUs to the Central Bank of Greece, which is of course a branch of the ECB, posting them as collateral for new loans;
  4.  The Eurogroup gave the green light to the ECB to allow its Greek Branch to accept these IOUs as collateral, and in exchange give the banks, real cash equivalent to 70% of the IOUs face value (a little more than EUR3.5 billion);
  5.  Meanwhile the ECB and the Eurogroup gave Stournaras’s finance ministry the green light to issue new Treasury Bills with a face value of EUR3.5 billion – IOUs issued by the state, which of course no investor would touch in their right mind given the emptiness of the state’s own coffers;
  6. The bankers then spent the EUR3.5 billion they had received from the Central Bank of Greece - in fact from the ECB itself -when they pawned their own worthless IOUs in order to buy the state’s worthless IOUs;
  7. Lastly the Greek government took this EUR3.5 billion and used it to pay off….the ECB!

The above charade exquisitely presents the intransigence of the troika, the insouciance of the European leaders and the impotence of the Greek establishment in the creation, conception and consummation of a scheme which in the ordinary course of business dealings would be termed an abhorrent mechanism! What makes The Book a spectacular masterpiece is it fearless exposure of sham dealings such as the above and attempts by a powerful combination of establishment apparatchiks to pull wool over the eyes of a beleaguered nation using a dangerous and despicable combination of economic threats and conditions.

At a post Euro-group press conference, a Greek journalist queried Christine Lagarde of the IMF as to whether she was happy that the rest of the Eurogroup had quashed the IMF’s support for Greek debt relief. Christine Lagard’s response was a combination of anger and frustration, “for the moment we are short of a dialogue; the key emergency is to restore the dialogue with adults in the room“.

If Yanis Varoufakis has crafted this memoir which has truth for a backbone, patriotism for a heart and courage for a head, (which I personally think he has), then there is no disputing the single adult who was in a plethora of rooms on sweltering days and cold resolute nights, ploughing ahead with determination in the face of powerful onslaughts unleashed by a coterie of power brokers, politicians and establishment mavens – all with the single avowed objective of stalling the inevitable sinking of a ship that represented a small, hapless and helpless nation which was once the very cradle of democracy!

About the author

Venkat

maniacal penchant for books, more books, still more books and lot more books - When I am not watching cricket that is! Love my Scotch and scribble for fun!

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