"Italy has to start change". Y. Varoufakis, author of a "Modest Proposal"

- For the first time since the beginning of the bailout, the authorities of Greece promised to oppose the demands of the troika and stated that it will not apply new austerity measures for the budget of 2014. Do you believe that, at the end, Samaras' government will succeed or il will be the international creditors to prevail again?

 

All Greek governments since the country’s first ‘bailout’ in May 2010 have been trading on false hope. For three years the Greek people were promised a light at the end of the tunnel while the crisis was reinforced with inane austerity policies. By June 2012, the electorate was almost ready to say ‘enough’. The latest government, led by Mr Samaras, had to make one last promise of a turnaround to gain an extension in the Greek people’s toleration of his Ancien Régime government. The promise was that the middle of 2013 would see the end of further spending cuts and tax hikes while, from the end of 2013, ‘Greek-covery’ (as they called it) would be perceptible. Behind these empty promises there were two factors: The first, as already mentioned, was the feeling that the Greek people had run out of patience while the second was the hope that the German elections would be followed by a lessening of the pressures on Greece by the troika (on the basis that the troika would not want to undermine the Greek government). Once the government had issued its promises of no further ‘austerity’ measures, it became a hostage to fortune, especially so given that the troika did not loosen its iron grip and, even worse, the German elections procured no U-turn on Europe by Berlin (if anything, the SPD is even more committed that Mrs Merkel to averting the banking union and any debt restructuring that Greece desperately needs).
In view of the above, it is clear that Mr Samaras is destined for an ignominious humiliation at the hands of the troika and in full view of the Greek public. His government was elected on a platform of not confronting the troika in any meaningful way. The troika knows this and will drug him through the mud like Achilles drugged Hector’s corpse around in order to deflate the expectations and destroy the soul of the on-looking Trojans.

 

- Given the situation of the country and the new budget hole emerged - clearly due to the economic depression fuelled by austerity – do you believe that Greece will be forced to a new international loan and the continuation of this dramatic vicious circle?

 

Of course. Whether they will call it another loan or disguise it as something different, the only alternative to a proper debt write down is a new (heavily disguised) loan. It is what bankers call ‘extend and pretend’. However, the troika and Athens are desperate to declare victory and to portray their austerity program as a success. So, this is what they plan to do: First, pronounce that there will be no OSI (i.e. no formal debt restructuring) while at the same time reducing interest rates on existing loans to almost zero and extending repayments for another thirty years or so (i.e. an… OSI in a different wrapping). Secondly, they will allow the Greek government to issue new Treasury Bills that the bankrupt Greek banks will purchase and then immediately post as collateral with the ECB in order to lend to the government. Thirdly, impose further austerity and ‘reforms’ (that aim at crushing wages, pensions and social services to fourth world standards) as preconditions for the first two policies above. These three moves will, naturally, constitute a new bailout program, only it will not be called so. Instead both the troika and the Greek government will be celebrating the successful… completion of the Greek ‘program’. Goebbels eat your heart out!

 

- In his speech to the V3Day last sunday, Beppe Grillo launched its "Modest proposal" for Europe in 7 points, taking as reference the project - "A Modest Proposal 4.0" - that you, together with Professor Galbraith, wrote as a “rationale solution for euro crisis”. Largely reflecting also the position of the main opposition party in Greece, SYRIZA, do you consider this program the only alternative feasible to prevent the rise of the new fascism in Europe?

 

Read more. The second part of the Interview with Prof. Varoufakis: http://www.lantidiplomatico.it/dettnews.php?idx=6&pg=6353