Yanis Varoufakis slams EU for ‘insisting’ UK ‘sticks to rules’
Ten years after the financial crisis, Europe’s economy achieved a recovery, but not a complete revival. Low inflation, low interest rates and low growth were the new normal across the eurozone. Then, the coronavirus pandemic hit, causing incredible damages to the economies of countless countries.
Covid-19 plunged the eurozone into its deepest recession for a generation and a double-dip downturn is expected in the final three months of 2020 after a fresh surge in infections.
The latest verdict on growth for the July to September quarter revealed a rebound of 12.5 percent – lower than the 12.7percent originally estimated in October.
However, new curbs in response to rising infections are likely to plunge Europe into a double-dip in the current quarter, with the German state of Bavaria imposing a nightly curfew in worst-hit districts due to a “disaster situation”.
The European Central Bank also came to the rescue with a €500billion (£458bn) extension of its pandemic asset purchase programme to spur on the flagging economy, as well as extending cheap credit for firms.
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Amid fears the eurozone might not be able to survive, a speech by former Greek Finance minister Yanis Varoufakis has resurfaced, in which he claimed the eurozone will not break up because of countries like Italy or Greece but because of Germany.
In a 2018 debate at the Oxford Union, the ex-Greek minister said: “The euro will break up, if it breaks up, I am not wishing that it does, I am simply describing the future as I see it.
“The way it will happen is that Germany will leave the euro once the Berlin political class has had enough of the riff raff, asking Greeks, the Italian, the French, the Portuguese and so on.
“The moment they start sniffing in the wind that possibility they might have to bail out 2.7 trillion euros of Italian debt, believe you me, the Bundesbank already has a plan in the drawer for printing Deutsche Marks.”
Mr Varoufakis said all German accounts will be redenominated from euros to Deutsche Marks immediately, as Germany has a “gigantic account surplus”.
He added: “The nearer we are getting to a fragmentation of the euro, the higher of the value of the German euro is.
“Of course what will happen is euros will be shifted from Italian bank accounts to German bank accounts.
“This is already happening.
“There are about 200 billion in the last 18 months that have shifted from Italian to German bank accounts.
“Because of the risk of keeping your euros in a country that after the break up of the eurozone will see its currency redenominated downwards not outwards.”
Back in March, Mr Varoufakis brilliantly explained everything wrong with the EU’s response to the pandemic and revealed what the bloc should be doing instead.
In a video posted on his YouTube channel DiEM25, he said: “The eurogroup, the EU and in particular the eurozone are terribly structured.
“They are on autopilot.
“They simply follow particular rules that cannot be followed without racking our economies. It is a reflection of a system that has been created in order to prevent governments from acting on behalf of society.
“That is if you want the ‘neo-liberal kernel inside Europe’.”
Referring to the proposals of his political movement DIEM25 or Democracy in Europe Movement 2025, the former Finance Minister said: “We need a common investment policy based on an alliance between the European investment bank and the European Central Bank.
“We need a universal basic dividend.
“We need a carbon tax and a social equity fund, the purpose of which will be to energise both private capital and public finance.
“We need public financial instruments in order to take the liquidity that exists in our financial circuits and put it into good use.
“Press them into public service in terms of public health, in terms of creating good quality jobs.
“The agenda of DIEM25 has never been more pertinent and has never been more urgent than today.”
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