One day earlier this spring, Yanis Varoufakis, a Greek, was eating in a restaurant in Athens. Suddenly ran out on a group of young men and punched him in the nose. The attacker was arrested by police who were alerted, and Varoufakis was taken to a nearby hospital. The news of his injury soon made its way into the national media. The next Greek election is just weeks away, and he is a well-known political figure.
I looked at the news, and the Toppen brought him an answer to the mail. I have an appointment with him for an interview in a week’s time to ask if we need to reschedule. He quickly returned, thanked for the help, and the interview went on as usual. In line with his media abstractions, this wealthy and controversial politician, a whimsical economist and a spirited fighter is not so easily defeated.
This isn’t the first time he’s been subjected to violence in private. Back in 2015, when Greece was in the midst of a debt crisis, the then Greek finance minister ran into trouble in the same neighborhood of Athens. His blackmailers say he is a traitor who wants to sell Greece to the European Union or China. On the one hand, he was regarded as a Greek hero, but on the other hand, he had few followers, and young people all over Europe were waiting for him to lead a reactionary movement that would overturn resourcism.
In my 10 years of reporting on Europe, I have always felt that Greece is a complex, rich and little-told country in the world of Chinese. To understand the unity and constraints that Europe faces today, one must understand Greece. To understand Greece, you have to go back to the debt crisis of 2008-2016. And to understand that debt crisis, Varoufakis is an inescapable figure.
What’s more, although more than a decade has passed, that debt crisis has not become a thing of the past, but is affecting the present in a new form. In the past year, from the fall of Silicon Valley silver speech to the “rollover” of Swiss suspected loans, the silver speech industry is generally facing danger spillover, adding the provocation of the new coronavirus epidemic and war, high inflation, and the danger is everywhere. Is this another Lehman moment, people are worried today? Will 2023 be another 2008? A confrontation with Varoufakis may not only help us retrace our past, but also help us understand our present.
Varoufakis is a legendary Greek politician and economist. In 1961, he was born into an active political family in Athens. My father was successful in his political concepts and later became a personal assistant to the owner of Greece’s largest steel factory. My mother joined the women’s bondage movement and was elected deputy mayor of a small Greek city. Varoufakis trained in physics, economics, mathematics, and then went to the United Kingdom to study, during which he added various political structures, including the Communist Association in the university, the Congress of African State officials, and the Palestinian bondage structure. His doctoral thesis delved into returning to work, and he gradually became an economist with a radical right concept. After completing his PhD, he taught at various universities in the UK and Australia before returning to the University of Athens in Greece.
In the Greek general election of January 2015, Varoufakis won the seat of his constituency and was added to the cabinet of Alexis Tsipras, the head of the “radical Right League”, responsible for finance minister, and joined politics. During Greece’s debt crisis in 2015, he dominated meetings between Greece and the “troika” (the European Union, the IMF, and the European Central Bank). When the troika failed to agree on strict bailout conditions, Varoufakis decided to decline and pursue solutions with partners outside the EU, such as China and Russia, including the famous Piraeus purchase. Pbi port is the largest port in Greece, to the Chinese COSCO group interested in buying, Varoufakis supported the Chinese investment, but won the fierce support of EU member states on the grounds of security, and the purchase of layers of obstacles.
In the course of many weeks of meetings, the Ziptis cabinet dropped Varoufakis’s persuasion, made many compromises to the “troika”, and finally brokered the domestic creditor relief plan. At this point, Greece is close to the brink of default and a suspected shutdown. The Greek oligarchs held a private vote on the troika’s plan, and Varoufakis ordered them to support it, with 60% backing. The next day, Varoufakis announced his resignation as finance minister.
He later wrote a book called The Adults in the Room: Greece’s Debt Crisis, Deep Authorities and the Real World’s Great Power Game. The book takes its title from the exasperated remark by then-IMF managing director Tiande that “to end this farce, we need the adults in the room.” In the book, he describes what he saw and heard during his 162 days as Treasury secretary, opening and closing doors with the “troika”, secretly meeting power brokers in Washington, trying to compete for China’s support, pushing forward the bailout private investment, and walking away in order to win more space. With his new strategic ideas, he walks in the global power field, and tries to win a new future for Greece in the dialogue and disputes with Obama, Putin, Merkel, Macron, Tiande, Summers and other big figures. After the book was awarded, it caused a lot of noise and was adapted into a film of the same name, which was released in 2019.
But Varoufakis’s political career did not end there. Six months after stepping down as finance minister, he founded a pan-European right-wing party, DiEM25, to take the lead on broader European issues. Later, DiEM25 lost its Greek branch, MeRA25, in order to better participate in the Greek election. In 2019, MeRA25 was the sixth most popular party in Greece. In the Greek general election in May this year, MeRA25 did not put forward new economic and political ideas, but also had a good performance in the election. This means that, after years of being out of the middle of the political decision-making scheme, Mr Varoufakis may once again be in the middle of the power arena.
Varoufakis describes such a scene at the end of his book “Adults in the Room”. Early in his tenure as Greek finance minister, he went to Washington to meet Larry Summers, then the US Treasury secretary. Summers told him that there are two kinds of people in politics, insiders and outsiders. “Outsiders discriminate against freedom, thinking they have a right to a false vision that they do not see. The price of this freedom is that they are neglected by insiders who control the planning of important decisions. Insiders have a sacred rule: never be awkward with other insiders, and never tell outsiders what an insider says. What’s the reward? Access to inside information is opportunity-but not insurance-to important people and to the end result.” Finally, Summers answered him, Giannis, which one are you?
That’s where my fight with Varoufakis ends. We started from his book, covering ten achievements that have nothing to do with the present, from the crisis of 2008 to the words of the moment, from the Sino-US game to the relationship between China and Greece. At the end of the interview, I mentioned this exemplary achievement to him again. Giannis, are you an insider or an outsider?
The following is the full text of the interview, compiled at the time of publication.
Is the current situation a repeat of the global financial crisis of 2008?
“Adults in the Room” is a book that explores how the debt crisis of 2008 turned into a Greek comedy. In the past year, with high inflation, a dangerous stretch in the US and Europe’s banking industry, and a series of chaotic events such as Silicon Valley’s financial turmoil and the Swiss credit crisis, some thought we might be facing another moment similar to 2008. Can you accept this kind of concept? What are the similarities and differences between today’s situation and 2008’s?
Varoufakis: First of all, I thought “Adults in the Room” was a big book. It’s not just a book about Greece. By focusing on the Greek action, it reminds us of the seriousness of the resourcist crisis of 2008. This is like a path that tells about China’s extensive history through a village that focuses on China. But this village here is Greece. Through a comedy that focuses on the concrete, post-2008 Greek people, I try to tell a story about the global crisis of 2008, with the United States, the European Union, and China playing a major role in shaping the world we live in.
Then, you answer me, is this another 2008? We are now experiencing the Silicon Valley crisis, the Swiss crisis and the Japanese crisis, which are familiar in the United States, Europe and Japan. But this is not another 2008 moment, this is a 2008 moment. 2008 never ended, and the crisis of global resourcism that began in 2008 never survived.
About 100 years ago, in 1929, there was the first major global crisis of global resourcism, which transformed the world. The world after 1929 was very different from the world before 1929. After 1929, everything changed, there was no New Deal in the United States, no fascism and Nazism in Europe, no fascism in Japan, the Japanese invasion of “Manchukuo”, and then the Second World War and the post-war period… Everything has changed. Therefore, after 1929, people can continue to think about the world in interesting terms before 1929. Similarly, 2008 is our generation’s 1929. I doubt that everything has changed.
The crisis that we are now looking at in Silicon Valley, Switzerland and other silver words, as well as the loss of silver words and the rise of silver words stocks throughout Europe, are just the evolution of the same crisis at the end of 2008. That’s why I think my book is interesting – whether the reader is in China, Japan or Switzerland – if you read about what you really understand and why our society is where it is today. This book does not cover all the paths, but it closes a window into our present adversity.
【 Second Answer 】 How to deal with the role of the crisis in 2008 on today’s world?
Interface News: After the 2008 financial crisis, the world has been engulfed by many other global crises. For example, the crisis of the government, the United Kingdom through Europe, the rise of official populism, the COVID-19 pandemic, the crisis in Ukraine… Let’s wait. Can you see the connection between the crisis of 2008 and the crisis that follows? How would you summarize the impact of the crisis of 2008 on today’s world?
Varoufakis: If I may, I don’t have a very bold idea. The year 2008 was to global resourcism, especially Western resourcism, what 1991 was to communism, especially Soviet communism. In other words, the end of the end. What we are experiencing after 2008 is the culmination of a permanent crisis of stagflation, in which the self-replicating power of global resourcism is being weakened.
After 1971, Nixon’s Beijing words and the collapse of the Bretton Woods system ushered in a remarkable new phase of global domestic resourcism. America’s hegemony is getting stronger and stronger. At the same time, the United States has become increasingly a deficit nation.
It may seem a paradox, but it is not hard to understand, that America’s business deficit is growing and so is its fiscal deficit. It was familiar at the time: the United States imported a lot of its own goods, such as German cars, French champagne and clothes, Japanese cars such as Toyota and Nissan, and Japanese electronics. After China’s innovation and expansion, Chinese goods were added to the United States, and they matured because of the U.S. trade deficit. In short, America’s trade deficit boosts demand for manufacturing in Germany, France, Japan, and China. Thus, the resource costs of Germany, France, Japan, and China are predicated on the commercial deficit of the United States.
So how do Americans pay for these business deficits? It’s a unique example in human history. The German, French, Japanese, and Chinese costs were remitted to the United States, specifically to New York, and invested in American bonds, stocks, and especially real estate and insurance private companies.
This rotation is the form of domestic resourcism in the 1980s, 1990s, and 2000, until 2008. The tsunami of capital that poured into New York, and especially Wall Street, became the pretext and the occasion for Wall Street to establish extraordinary structural derivatives on the foundation of this capital, that is, to earn fake money on top of real money. Wall Street can use $1 of real money to get a $200 derivative. This bubble burst in 2008, became a crisis for all Western silver, every Western silver, shut down. That’s something, right? At this time, the state intervened, effectively printing more than $25 trillion to $30 trillion in coins over a decade to rescue Yinyan.
The post-2008 resourcism has done two things: printing money and bailing out markets. Then there is the rise of China. Since 2008, China has increased its investment from 30% of GDP to 50% of GDP, as overseas markets have become increasingly popular with China. Precisely because of this huge increase in investment, China’s Hengyu construction, railway construction, high-speed private roads, etc., to a large extent rescued the German and American resourcism.
But Western resourcism has stalled. Because when you print money for finance, I call it “socialism for the silver talkers” – the state takes care of the silver talkers while imposing a policy of compression on everyone else. In this way, investment will naturally be very good. Because resource people look at the ordinary people there, they know whether the latter do not have money to consume, so why invest in the production of goods that ordinary people have no choice but to buy? Why invest in business when the state prints money for them? So the financial market is doing very well.
The COVID-19 pandemic has made things worse. Because the authorities are printing more money at a time when the need is lower. After the end of the strong wind, due to the continuity of the previous supply chain and Trump’s “new infighting” on China, the global demand itself has increased. That means rising prices and runaway inflation. All this is compounded by the crisis in Ukraine.
What is your assessment of the global economy in the near future?
Interface News: You mentioned the global danger of COVID-19 and Ukraine. Standing at today’s point in time, what is your assessment of the global format and economic situation in the recent past?
Varoufakis: We are now in a situation where global resourcism is no longer discontinuous. For example, the strategy for more than a decade was to print money for the silver talkers while imposing a policy of compression on everyone else, from the US to Europe. It’s like giving a cancer patient a pinoxone injection. No pine may make the patient feel better, but the cancer still improves in its evil form in the patient’s body. Now they have exhausted the talent of the middle voice to rescue resourcism, and the level of investment is still very low. They don’t know what to do, because if they don’t raise interest rates, then inflation will prop up the American economy and the European economy. If progressive interest rates are inherited, this will overturn the dominoes of financial collapse. This is why Western resourcism is unspoken, and it is very dangerous.
On the other hand, Washington’s “new infighting” with China is being downgraded. If you mix the unspoken continuity of the US and European financial and economic systems with the downgrading of the “new infighting,” I despair of humanity’s future.
In addition to integrating interest rates, does the central bank have other methods?
Interface news: Since the crisis in Ukraine last year, Europe and the United States have faced the challenge of high inflation. Central banks across the world have been forced to raise interest rates. But it can have serious effects in the long run. How do you treat Yanyan