Yanis Varoufakis: “The EU declared war and Theresa May played along”

The former Greek finance minister on how a bad Brexit deal became inevitable and his plan to transform Europe.

(Photo By SIMONA GRANATI - CORBIS/GETTY IMAGES)

In 2016, shortly before the EU referendum, Yanis Varoufakis warned that the UK was destined for a “Hotel California Brexit”: it could check out but it could never leave. The former Greek finance minister spoke from experience. In 2015, his efforts to end austerity – “fiscal waterboarding” – were thwarted by the EU (a struggle recorded in his memoir Adults in the Room: My Battle With Europe’s Deep Establishment).

Theresa May’s draft Brexit deal confirmed Varoufakis’s prophecy: the UK would be condemned to purgatory. With fortuitous timing, on the evening that May’s agreement was published, Varoufakis delivered an Oxford Union lecture on Europe’s future. The 57-year-old Marxist and game theorist wryly remarked that Conservative cabinet ministers praised his analysis in private.

“The UK should never have entered the negotiations,” he told me when we met afterwards. “You do not negotiate with the EU because the EU does not negotiate with you. It sends a bureaucrat, in this case it was Mr Barnier…they could have sent an android, or an algorithm.”

May’s fatal error, Varoufakis said, was to accept a two-phase negotiation: a divorce agreement followed by a new trade deal. “This was a declaration of war because Barnier said: ‘You will give us everything we want: money, people, Ireland. And only then will we discuss what you want.’ Well, that isn’t a negotiation, that’s a travesty. And Theresa May agreed to play along.”

But Varoufakis, who helped persuade Jeremy Corbyn to support Remain in 2016, has little sympathy for the “People’s Vote” movement. “It’s offensive. What was the first vote? Wasn’t it a people’s vote? To call it a people’s vote is to try and delegitimise the original vote – to say it was dictatorial, it was rigged.”

He added: “You have to explain two things: first, how are you going to get the referendum completed before the Article 50 period is over? Secondly, how can you have a binary choice between five or six options? Explain those things and I’m with you.”

Has the UK’s difficulties deterred other member states from leaving? “I never thought that the EU would disintegrate as a result of exits,” Varoufakis said. “It is fragmenting without any formal exits. You have Orbán [in Hungary] doing his own thing, the Polish government doing its own thing, the Italian government violating all the rules.” The EU could, he quipped, one day resemble the post-Soviet Commonwealth of Independent States (“I was in Moscow some time ago and noticed there was still an office”) – or, I suggested, the League of Nations.

Angela Merkel, Europe’s pre-eminent leader, has begun her long farewell. I asked Varoufakis how he viewed the liberal adulation of the German austerian. “I’m a dialectician: she has been a disaster and we’re going to miss her. She is a disaster because she squandered immense political capital that could have been used to reshape Europe. But we’re going to miss her because whatever comes next will be worse.”

Varoufakis is writing “political science fiction” but his main focus is the pan-continental Democracy in Europe Movement 2025 (DiEM25), which he founded in 2015 and which will contest next year’s European elections. Some, I noted, had dismissed it as a vanity project (albeit one with 75,000 members). “There are historic moments, moments of deep crisis when we need new movements,” Varoufakis countered. “The Labour Party emerged because the Liberals simply could not satisfy the needs of the working class in Britain. Similarly, I think that DiEM25 is necessary because nationally confined parties are simply not fit for purpose when our major crises – private debt, public debt, low investment and poverty – are like climate change, they’re common crises.”

He added: “It’s important to keep freedom of movement, we’re internationalists and we do not want to see borders. The idea that foreigners are a problem is a toxic idea and it’s completely wrong. I reject wholeheartedly the argument that no borders serves the interest of capital because migrants compete with the local working class. This is a pathetic argument, it’s wrong, that never happens. Migrants create jobs – in aggregate – they do not take jobs away.”

His dream, he said, was for the UK to return to a progressive and democratic EU in 2025. Varoufakis has deep ties to Britain: he studied mathematics and obtained a PhD in economics at the University of Essex (accounting for his fluent English) and taught at Cambridge. He later emigrated to Australia, where he lectured at the University of Sydney, before returning to Greece in 2000 (citing “nostalgia and abhorrence of [Australia’s] conservative turn”). He lives there with his second wife, Danae Stratou, a Greek visual and installation artist.

In an era of centre-left decline and “Pasokification” (a term derived from Greece’s vanquished Pasok party), Varoufakis continues to draw hope from Jeremy Corbyn.

“I remain a great supporter of Jeremy. I’m not so sure about the Labour Party because it is a cesspit of backstabbing and shenanigans. It’s a very antiquated party, I wouldn’t like to be part of it. But Jeremy has done a remarkable job of navigating his way through the various landmines that the Blairites put in his way.”

In Greece, Varoufakis said, his “greatest adversary” is “the couch”. He explained: “After 2015, people felt so demoralised that they’ve privatised their grief, their concerns, their hopes and they stay at home. It is impossible to get them off the couch, to get them to vote, to participate.”

But “talking to people”, Varoufakis said, also remained his greatest source of optimism. “It’s when I am reading newspapers and listening to the radio that my spirits wane.”