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Varoufakis: Greece should have gone bankrupt

TAGS: Economy

Greece should have been allowed to go bankrupt and move on from the crisis, former finance minister Yanis Varoufakis has told a German tabloid.

“As for the Greek banks and state, they should not have been saved – we should have been allowed to go bankrupt, suffer the consequences but then be allowed to pick ourselves up and move on,” Varoufakis told Bild in a lengthy interview from his summer home on the island of Aegina.

The former minister said Greece, which formally exited the bailout programme on Monday, is in the “same black hole” as it was a decade ago and that “it keeps sinking deeper into it every day.”

“Despite two debt cuts over several billion euros, the debts have grown: the state is still broke, private citizens have become poorer, companies still go bankrupt, and our gross national product has decreased by 25 percent… Everybody owes money to everybody – but nobody has money to pay back their debts,” he said.

The surpluses that the Greek state has shown in recent years are real but reflect “the flesh and blood that the state extracts from a dying private sector. It is the evidence of the crime against logic, not of recovery or success.”

Germans had been lied to twice by their chancellor, Angela Merkel, Varoufakis claimed: once when she said that the bailout was an act of solidarity with the Greeks, when the money was actually intended for Greek and French banks. The other lie was the “promise to the Germans that the bailout loans would be paid back and with interest - something that was impossible given Greece’s bankruptcy”.

The former minister said that Berlin and the EU were not fooled by Greek statistics upon the country’s entry to the eurozone. “They always knew. They were conniving in the statistical manipulation of Italy because the politicians really needed Italy in.”

He alleged that Merkel’s “charm” had destroyed many men, including men in her own party and the main German opposition.

“Tsipras was one of her easiest exercises. She promised him a lot and gave him nothing. For instance, she promised him debt relief – and then obstructed them. She had an aim: we were supposed to get more money and then shut up.”

Varoufakis also claimed that he was sacked by Prime Minister Alexis Tsipras because he would not sign the third bailout loan from the Greek government. This was “exactly at the point of time when we wanted to bring charges against huge numbers of tax evaders.”

“The troika, with the acquiescence of the Tsipras government, killed the programme that would have caught the tax evaders … The troika – not the ministers of finance – wanted to protect the oligarchs. The oligarchs were the troika’s allies in Greece, running the banks and controlling public opinion. They had to be protected.”

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