On February 20, 2015, Yanis Varoufakis entered the HQ of the European Union alone—both literally and figuratively. He came without advisers, press liaison, or bodyguards—and with the Brussels press corps salivating over what seemed like a certain and abject surrender. Sixteen days before that, the European Central Bank had punctured the euphoria of Syriza’s election victory by suddenly withdrawing its regular loan facility to the Greek banks, putting them on life support, and triggering a silent run on bank deposits.
By the time Varoufakis arrived in Brussels, he knew that up to €1 billion [$1.1 billion] a day were draining from the Greek banking system: he would, without a deal, be forced to impose capital controls, limiting ATM withdrawals, and preventing the removal of cash offshore. In the end he signed a deal somewhat short of abject surrender. Greece would get leeway to implement measures to counteract austerity; the high levels of government surplus (4 percent) demanded by the 2011 bailout were waived.
In all other senses, Greece was still a debt colony of the EU. But it had been granted a modicum of home rule, and what we used to call the “comprador bourgeoisie”—the pliant agents of the colonists—were gone.
Most ordinary politicians would have given a terse statement, taken a couple of questions and headed for the steam room in their hotel. Instead Varoufakis conducted a 40-minute Q&A hailing the deal as a minor victory—which, once you understand the eurozone, it was. For Varoufakis had, in those 16 days, vaulted the minotaur.
In the original version of his book, The Global Minotaur:America, Europe and the Future of the Global Economy, he set out an analysis of the 2008 crisis and its aftermath using the Cretan legend of the minotaur as a metaphor: the “Global Minotaur” was US capitalism centered on Wall Street, extracting tribute from the world after 1971. Lacking a Theseus to kill it, the mythical beast was killed by unsustainable economics. But the spirit of the minotaur lives on.
Austerity economics, and the primacy of the banks over households, businesses, and state treasuries, have been the articles of faith guiding the eurozone since the Greek crisis began. As America imposed its one-sided deal on the world after the fall of Bretton Woods, so Germany remained determined to take only the upside of the Euro arrangement.
With the arrival of Syriza in power the Euro Minotaur awakened, looked up, and took aim at the most colorful presence in its labyrinth—Varoufakis.
Though I’d been engaged with his work for years, I only met Yanis Varoufakis three days before the election of January 25, 2015. He lucidly laid out his argument, and his plan: Greece was effectively insolvent; Europe’s bailout a €320 billion [$353 billion] handout to the north European banks to protect them from that fact. Unless the eurozone acquired an effective mechanism for recycling fiscal surpluses and deficits—with the mountains of idle savings energized so that they become productive investments, particularly where investment is lagging behind—it was “finished within two years.”
But Varoufakis remained convinced, like the majority of Syriza’s economic gurus, that a “good euro” was achievable. The auguries were positive: Mario Draghi (President of the European Central Bank) had launched quantitative easing—a €1.6 trillion [$1.75 trillion] monetary stimulus—plus he had called for less austerity. Jean-Claude Juncker (President of the European Commission) had launched a fund aimed at bringing €300 billion [$330 billion] of investment to the stricken eurozone. The politics were lined up in favour of Greece. Between the election and February 20, Varoufakis learned a lesson on behalf of the entire European left: politicians do not control Europe; the Minotaur does.
We don’t know whether the reprieve Varoufakis won on February 20 will last, expand, or get closed down. But we do know the power that fresh ideas alone can bring. Varoufakis’s straight-talking changed the modus operandi of Euro summits, probably forever. His preparedness to expose the workings of power-summitry and pressure threatened to put out of business a press corps whose working lives had been devoted to accommodating it. In every conversation there were three audiences: Greece, its debtors, and the workers and youth of Europe.
What irked the debtors most was that Varoufakis looked and sounded like one of them. A successful professional economist in the West European tradition, who had moved left at a time when others of his generation were moving right, Varoufakis knows enough of the way the neoliberal world works to make every clash with it look and feel excruciating.
Most politicians cannot be theorists. First, because they are rarely thinkers; second, because the frenetic lifestyle they impose on themselves leaves no time for big ideas. But most of all because to be a theorist you have to admit the possibility of being wrong—the provisionality of knowledge—and you know you cannot spin your way out of a theoretical problem.
In his book, Varoufakis laid bare the central problem of the world economy: the lack of an agent to create new rules, new paradigms of behavior, new reservoirs of popular consent. If China is unready, the European center too unpopular, and America too decayed to do it, he asked the question: who will? Through the sheer incompetence and venality of the political centre in Greece, and the exasperation of its people, the answer was: the radical left.
Whether they win or lose their fight with the Euro institutions, Syriza have demonstrated the power of theory. Varoufakis predicted the catastrophic end of the Greek bonanza, the unsustainability of leveraged finance, and the fragmentation of the eurozone—even while the theories acceptable to the Wall Street Journal and Financial Times said the opposite. He also told his advisers, from the very beginning, that they could expect a deal with Europe only at “one minute past midnight.” That is, he theorized the potential accidental outcomes of the crisis too.
That’s what gives The Global Minotaur both its power and its poignancy. We don’t know how the fight between Syriza and the eurozone will end—but we can be certain it will involve compromise. Politicians live in the world of compromise; theorists do not. But by the end of it, the radical left will know what it means to fight for a new, fairer kind of capitalism, in the teeth of resistance from the old kind.
March 28, 2015
This foreword was originally extracted in VICE.