A New Versailles Treaty is Haunting Europe
By Yanis Varoufakis
July 15, 2015 "Information
- In the next hours and days, I shall be
sitting in Parliament to assess the legislation that is part of the
recent Euro Summit agreement on Greece. I am also looking forward to
hearing in person from my comrades, Alexis Tsipras and Euclid
Tsakalotos, who have been through so much over the past few days.
Till then, I shall reserve judgment regarding the legislation before
us. Meanwhile, here are some first, impressionistic thoughts stirred
up by the Euro Summit’s Statement.
- A New Versailles Treaty is haunting Europe –
I used that expression back in the Spring of 2010 to
describe the first Greek ‘bailout’ that was being prepared at
that time. If that allegory was pertinent then it is, sadly, all
too germane now.
- Never before has the European Union made a
decision that undermines so fundamentally the project of
European Integration. Europe’s leaders, in treating Alexis
Tsipras and our government the way they did, dealt a decisive
blow against the European project.
- The project of European integration has,
indeed, been fatally wounded over the past few days. And as Paul
Krugman rightly says, whatever you think of Syriza, or Greece,
it wasn’t the Greeks or Syriza who killed off the dream of a
democratic, united Europe.
- Back in 1971
Nick Kaldor, the noted Cambridge economist, had warned that
forging monetary union before a political union was possible
would lead not only to a failed monetary union but also to the
deconstruction of the European political project. Later on, in
1999, German-British sociologist Ralf Dahrendorf also warned
that economic and monetary union would split rather than unite
Europe. All these years I hoped that they were wrong. Now, the
powers that be in Brussels, in Berlin and in Frankfurt have
conspired to prove them right.
Euro Summit statement of yesterday morning reads like a
document committing to paper Greece’s Terms of Surrender. It is
meant as a statement confirming that Greece acquiesces to
becoming a vassal of the Eurogroup.
Euro Summit statement of yesterday morning has nothing to do
with economics, nor with any concern for the type of reform
agenda capable of lifting Greece out of its mire. It is purely
and simply a manifestation of the politics of humiliation in
action. Even if one loathes our government one must see that the
Eurogroup’s list of demands represents a major departure from
decency and reason.
Euro Summit statement of yesterday morning signalled a
complete annulment of national sovereignty, without putting in
its place a supra-national, pan-European, sovereign body
politic. Europeans, even those who give not a damn for Greece,
ought to beware.
- Much energy is expended by the media on
whether the Terms of Surrender will pass through Greek
Parliament, and in particular on whether MPs like myself will
toe the line and vote in favour of the relevant legislation. I
do not think this is the most interesting of questions. The
crucial question is: Does the Greek economy stand any chance of
recovery under these terms? This is the question that will
preoccupy me during the Parliamentary sessions that follow in
the next hours and days. The greatest worry is that even a
complete surrender on our part would lead to a deepening of the
- The recent Euro Summit is indeed nothing
short of the culmination of a coup. In 1967 it was the
tanks that foreign powers used to end Greek democracy.
In my interview with Philip Adams, on ABC Radio National’s LNL,
I claimed that in 2015 another coup was staged by foreign powers
using, instead of tanks, Greece’s banks.
Perhaps the main economic difference is that, whereas
in 1967 Greece’s public property was not targeted, in 2015 the
powers behind the coup demanded the handing over of all
remaining public assets, so that they would be put into the
servicing of our un-payble, unsustainable debt.
[Watch this space for detailed comments on the
economics of the proposed legislation…]
Yanis Varoufakis is a Greek-Australian
economist who served as Minister of Finance of Greece in 2015.