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

- In his speech to the V3Day last sunday, Beppe Grillo has 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?

 

I hope it is not the only alternative. Indeed, there is no shortage of policies that could be enacted today that would arrest the crisis and, therefore, steal the thunder from the Nazis and fascists who are having a ball in the toxic environment created by the inane handling of the inevitable Euro Crisis. The Modest Proposal is one of these alternatives. What makes it special is that it can attack the crisis at its roots efficiently, without the need for Treaty changes and without asking of Germany to pay one euro for the crisis’ resolution. In this sense, we believe that the Modest Proposal serves the purpose of exploding the myth that there is either no alternative to the current policies of austerity-avec-bailouts or that the alternative is for Germany to foot the bill.

 

- Your Modest Proposal foresees a radical change of economic policy in Europe. Nevertheless, the agreement for the formation of a Grand Coalition in Germany clearly demonstrates that Nordic countries will not accept in the short period any of the points that you indicate as necessary to overcome the crisis. This is why, according to many experts, southern countries should form an alliance and give them an ultimatum. If even in that case their demands will be unheard, which is the best solution to take for them?

 

Quite so. The SPD’s cowardice is the greatest source of sorrow and regret for well-meaning Europeans across the Continent. Their failure of perception of what is at stake, and of how easy it would have been (on the basis of the Modest Proposal) to ‘fix’ Europe is mindboggling. Quite clearly, things are coming to a head and the countries at the forefront of pain and collapse, i.e. the South plus Ireland, have a moral duty to themselves, and to the rest of Europe, to join forces and to present Europe’s ‘core’ governments with a simple declaration: “Enough is enough! At a time when the standard Taylor Rule (i.e. the central banks’ favourite tool for computing the optimal interest rate for different countries) suggests that the optimal interest rate in Germany would be 3%, for France 0.15%, for Italy -3.5% and for Greece -19.5%, it is clear that the Eurozone is broken. We need to implement something like the Modest Proposal!” If Germany and the Netherlands disagree, along with Finland and… Slovakia, Athens can simply refuse to borrow more money from the ESM in order to give it to the… ECB (a sensible move in any case), Rome could unilaterally announce an increase in its intended budget deficit to 5% at a time of a credit crunch and a vicious recession (again a sensible macroeconomic move) and Madrid could try telling the truth about the state of its banks (never a bad idea!).

 

- What is your expectation for the European elections next May? And what is, in your opinion, the country where it can start that radical change necessary to overcome the current stalemate?

 

There is no doubt that the May European elections will be a smack in the face of the Establishment. Already, the  Establishment is preparing its apologia – its strategy for defusing the terrible electoral thrashing that they know they will get. I can already hear in my ears the arguments that “Euro elections are not pertinent to matters of national government because electors find in them a splendid opportunity to express frustration costlessly…” The Establishment is right in one regard: Change will not come from the May European elections. The elections can be the impetus for radical change later on. But a good result for the forces of reason and humanism in the May elections does not guarantee a change for the better.
As far as the country that can and should make a difference, I have no doubt that this should be Italy. Italy has a good external position, almost a balanced current account, and its public debt is mostly internal. In other words, its gvt, if it chooses to stand its ground against the austerian North, can resist being pushed around better than any other country. Unfortunately the Rome government is of the comprador type. But this is something that the Italian people could change...