I recommend this profile of Yanis Varoufakis by Ian Parker in the New Yorker. Parker clearly spent some time shadowing Varoufakis, yet the portrait that emerges is not wholly flattering (but not wholly disparaging either). Parker adroitly uses the personality of Varoufakis as a device to tell the dismal story of Greece’s debt debacle, although – typically – there has been way too much attention on the man rather than the detail of the issue. In the vast amount of reporting on the crisis, it has been remarkably difficult to divine actual details of the deals on the table. You get some of this in the article as well as Varoufakis’s indiscreet descriptions of meetings with the Eurogroup or Obama. He’s right to be indiscreet. There is far too much secrecy about meetings like this, where the very future of Greece, the Euro and the EU, is often determined.
A broader analysis of the crisis requires this detail. But the lack of it hasn’t stopped commentators from the right and left finding reflections of their own prejudices, from Chris Hedges on the left claiming the crisis as consonant with the crisis of global capitalism (which though similar in some respects, it is not). On the right (and left), there’s been both nasty anti-German prejudice and sneering at Syriza (Walter Russell Mead called Varoufakis “a Marxist clown” which he is not, as you can read for yourself) as well as patronizing reports about Greece’s corrupt and irresponsible ways (which are all, entirely, the fault of previous governments, not the current one). National essentialism/racism lives on and those who indulge in it, including Pablo Iglesias of Podemos who does not stint in his insults of Berlin, should be ashamed.
There’s a lot at play in the Greece crisis. But it is above all a crisis of the EU structure, and in particular the inadequate design of the euro currency itself where the only tool to deal with poorly performing and indebted economies is vicious austerity. With exchange rate adjustment impossible, the invidious choice of bailout or austerity comprise the only options on the table. I agree with Krugman and the IMF that massive debt forgiveness is the only way out of this mess because there is simply no way that Greece can pay its debts, let alone prosper, without it. But advocates of this approach often fail to realize why Schäuble et al take the hard line. It is much less about petty “balancing the books” budgetary housekeeping (and let’s throw in an anti-German jibe at this point), than about several factors which are not so easily dismissed, including the credibility and thus future of the euro itself, but also the knock-on effect of debt forgiveness where it is taxpayers not only in Germany but also in the – much poorer – Czech Republic or Hungary who end up footing the bill. The former, if not the latter, is in fact a noble cause. Schäuble is deeply pro-European, a politician of the Kohl era who believes that without the binding economic (and now monetary) ties of the EU, war may once again stalk the continent. These motivations demand respect, even if they do not justify the ultimate policy.
Where does this all end up? The Greece-Eurogroup deals so far will only prolong the agony for Greece and the EU. Greece will not be able to pay its debts or sustain the grievous austerity it is already suffering. People come first and the suffering in Greece is intolerable. What comes across most in Parker’s profile is the incredible, appalling lack of imagination of the officials concerned who seemed locked into the thoughtless binary choice I have explained. This is just not good enough. What might work? Restructuring Greece’s debt to push off repayment into the far future and reduce interest rates to their market levels – ie near zero – is really the only good option. But there are multiple ways to achieve this. I like Varoufakis’s aggression and candour, even if I think his negotiating technique is terrible. We need more of that. We need more transparency and creativity. It is horribly clear that the government of the EU (for this is effectively what the Eurogroup is) is grossly untransparent and, frankly, undemocratic. That has to change if the virtuous ideals of the grand European project are to survive. And I don’t mean more powers for the equally ghastly European Parliament. I mean a much more profound transformation where the ideals are transferred from elites, like Merkel, Schäuble and indeed Tsipras, to the people. At the moment, the people, in Greece, Germany and beyond, are rejecting those ideals because of crises like these, and that is a worrying thing indeed.