Home » Yanis Varoufakis: A Modest Proposal for Transforming Europe at TEDxAcademy (Transcript)

Yanis Varoufakis: A Modest Proposal for Transforming Europe at TEDxAcademy (Transcript)

Full transcript of Greek economist, academic and politician Yanis Varoufakis’ TEDx Talk: A Modest Proposal for Transforming Europe at TEDxAcademy Conference.

Listen to the MP3 Audio: Yanis Varoufakis on A Modest Proposal for Transforming Europe at TEDxAcademy


Yanis Varoufakis – Greek economist, academic and politician

When Gandhi was asked once to comment on European civilization, his quip was, “It would be a very good idea.”

When asked today about our views on the European Union, I think we can be excused to reply in a similar fashion. What a splendid idea it would be if we could only pull it off.

United only in name, the European Union is, I’m afraid, in a process of disintegration as we speak. With the commitment and determination of a termite colony, which is eating into the foundations, very soon there will be nothing left but an empty shell, to remind us of the lofty ideal, that used to be the European Union.

In Agatha Christie novels when the reader comes across in the prologue a group of characters, upper-class characters usually that are congregating some chateau, the reader knows what to expect, a series of murders.

Similarly, today when we hear that our European politicians are gathering today or together we know what to expect, a comedy of errors which will be wrapped up in triumphant rhetoric, but which very soon will prove to be nothing more than dangerous harmful waffle.

To err is human. But to mess up spectacularly we need an elite made up of prime ministers, presidents, ministers, apparatchiks, opinion makers who are determined not to face up to a systemic crisis systematically. Alas, at least now we have enough evidence that renders all such denial inexcusable.

Humanity has not surprised itself very often but it has done so twice in the past. Οnce in 1929 and yet again more recently in 2008. 1929 ought to have taught us a very simple binary twin lesson. First that — the first victim of such a crisis is the common currency. It was the gold standard in 1929, it is the Euro today.

The second victim is of course truth and civility. One such terrible crisis hits the world. A Hobbesian war of all against all is unleashed on an unsuspecting humanity and the first victim is our capacity to recognize the systemic crisis we are in, as a systemic crisis. And therefore it renders us incapable of accepting our responsibility for at least a portion of that crisis.

Thrillers begin with some cunning detective who is unmasking one shady character after the other. But good thrillers, I submit to you, do not end with the unveiling of the perpetrator. They go one step further. They reach the momentous moment when the cunning detective inadvertently unmasks himself. Bewildered he is staring at his own image in the mirror. This crisis is having a similar effect on all of us.

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Our masks are falling. Unscrupulous bankers, inane politicians, conniving entrepreneurs, cynical academics, uncritical citizens, who are all being unmasked but as their masks keep falling the dejection is becoming generalized. Meanwhile the human costs are mounting up and the only way of making sense of them and measuring them sensibly is by means of counting lost generations. It is time to transform Europe and to be transformed in the process.

Now, the medical profession only very recently managed to save more people than it killed. Up until the 1920s or so the disease was preferable to the cure. Similarly with the Εuro crisis now our European leaders are enacting, what I call a poisonous medicine — toxic bailouts, inane austerity. We created, in order to salvage a Εuro system, a currency union which was never meant, never designed to sustain the catastrophe of 2008, the shockwaves of that great earthquake.

What we have done is we created a scaffold which is, instead of helping the edifice from collapsing it is putting more pressure on it. We’ve created this European Financial Stability or Instability Facility and we modeled it. We created it in the image of Lehman Brothers’ infamous derivatives. It was as if we took two stones and we tied them together by means of a string, hoping they will float more readily. The result of course is the uncontrolled disintegration that we are experiencing.

Now, by now most people are realizing this. So what we have here is a New Jerusalem that is being canvased. It comes in the form of the so called “Federal Option.” Well-meaning Europeans and some friends from federal field recite this litany of federal concepts, ideas, suggestions. I’ll just give you some.

We hear of the importance of forging a Fiscal or a Transfer Union in Europe, of having a Federal Treasury, of giving a new Leviathan, a new Economic Czar, the power to rule over all of us with an armed fist and keep us in awe. What we hear about is Centralized Disposal of National Assets, particularly of the Greek kind. The laws of National Sovereignty as a price we have to pay for this Fiscal Union and of course the dreaded treaty changes that have to go through 27 parliaments and/or electorates.

I submit to you that this is both unworkable and undesirable. Why is it unworkable? Because — and this is a message to federalists — the worst enemy of federalism at the moment is itself. And the reason why I’m saying this is because if we move in the federals’ direction the crisis is certain to outpace us. It would run faster than we do. And when the treaty changes take longer than the collapse of the Euro, all we will be left with is the smoldering mess in which there will be nothing left to federate.

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But there is a second reason why this Federal Option needs to be shunt and it is that if the United States of Europe is a good idea, it is not an idea that should be wasted and subsumed in the context of trying to solve the current crisis. Let me put it very simply. The Federal Option will only be possible once the crisis is over, not as an antidote to the crisis. We will only be capable and worthy of federation, when as Europeans we can imagine the future in which Greeks and Germans will be voting in Greek and German politicians to represent us. We will only be able to effect a decent Federal Europe when we can imagine a situation where our national armies are dissolved and are merged into a common European Defense force.

We are only going to be able to put together a decent Federation if we can imagine a situation where our views are assessed within Europe on the basis of their merits and demerits alone, what the ancient Athenians used to refer as Isigoria, as opposed to judging what somebody says on the basis of the who they are, what accent they speak in, which country they come from.

And finally at a symbolic, but a very important level, let me say this, we are only going to be capable of a proper federation when we can decide as Europeans what to print on our euro notes. Instead of these abstract bridges and gates that symbolize one thing, our incapacity to agree on common symbols.

So if I’m right that the New Jerusalem is not really a New Jerusalem, and that it is putting forward an unworkable and undesirable idea, which will also lead to uncontrolled disintegration, then what is the alternative?

Well, let me suggest to you that before we agree in an alternative, perhaps we should agree on some shared principles that should govern our future. These future principles may seem contradictory but they can be rendered harmoniously and if they can’t then we have no future. Let me give you examples.

One principle is that I think we should end the perfectly partitioned Europe that we created in Maastricht in order to create the Euro, while at the same time however, strengthening National Sovereignty and empowering National Responsibility within that model.

Another set. End the pseudo solidarity which is being imposed upon the Dutch and the Germans in order to give bailouts, pretend bailouts to the Greeks and to the Irish. Stop inane austerity which is only making the debt crisis worse. Ignore all the calls for debt buybacks which will not work, but at the same time integrate investment and management of our problems like existing debt and banking losses. This is what I refer to as decentralized Europeanization, so allow me an acronym. Decent Europe.

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Europeanize what? Free realms. We need a management of existing debt at a European level. We need management of the banking sector which is collapsing all over us, and we need a Europeanized investment policy in aggregate.

How do we do this without treaty changes and federation? We already have existing institutions in Europe and each one of them can be assigned one of these tasks. I’m not going to go into this. This is not the place or the time. You can see more of this proposal elsewhere. All I want to do now is to give you a flavor of what the whole purpose of this is.

Decentralized Europeanization creates circumstances for national sovereignty and national responsibility to be strengthened. Because if we integrate these three spheres in Europe of existing debt, of banks and investment flows, then at the national level each member state can run a balanced budget, and can learn to live within its means, and also to be empowered within these limits to exercise a full national sovereignty.

So I present this Decent Europe proposal to you as if you want a forger of a future Federation’s prerequisite, which I’ve already mentioned and I won’t mention again.

Let me finish by reminding you of a myth, according which Sibyl of Cumae offered Tarquinius Superbus, the king of Rome at the time, the nine books of wisdom at a price that Tarquinius considered to be exorbitant and therefore he said no to the offer. Sibyl as you all know started burning one of these volumes after the other until Tarquinius relented agreeing to pay the original high price for the remaining three volumes. Let me suggest that the European crisis is following Sibyl’s strategy. The problem is that our European leaders keep saying no and therefore threatening to allow our common heritage to burn in its entirety.

Decentralized Europeanization offers Europe a chance to save its last three books of wisdom or the equivalent. It offers us a chance to usher in a new era in which Europeans, Northern and Southern, Western and Eastern, can stare into each others’ eyes and see and recognize a partner. If we miss this chance, then Europe is going to be dragging the whole planet into a despicable mire for a third time in a century. It is our duty and overarching obligation to prevent this.

Thank you.


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