Yanis Varoufakis's Blog

At a time Donald Trump, Big Tech and Wall Street deploy stablecoins to privatise the dollar, usurping the decentralising power of blockchain to enrich themselves at everyone else’s expense, here is an alternative use of blockchain that harnesses its decentralising powers to benefit everyone equally – to pay everyone a substantial, non-inflationary, basic dividend – without the need to tax or borrow.Here is an idea that can make a real, urgently needed, difference to our awfully divided societies.Imagine a trust fund for everyone paying a personal dividend to each.Now imagine a common, a public digital platform, let’s call it a Monetary Commons, that harnesses our collective capacity to create the money needed to fund this personal dividend for all.The idea of a personal or basic income is not new, of course. People have sung its praises for decades. But they were stifled. The majority doesn’t want to pay higher taxes, or the higher interest rates more public debt would bring, to deliver a personal payment to others, including to the already stinking rich.But what if it is now possible to pay a decent personal dividend without new taxes or new public debt. How? Not by magic or hocus pocus economics but by reclaiming from private bankers our society’s power to create money.Today, we have the digital tools to take back the power to create money, use that power to create a common trust fund, and pay each a personal dividend. These tools are here already. And if we do not use them for benefitting everyone, the bankers and Big Tech will use them to print more money for themselves.So, let’s get cracking! Let’s build a new Monetary Commons to pay a personal dividend to each!How would it work? Technically, it is ever so simple.You download an app, let’s call it Monetary Commons Pay (or MCPay). MCPay is provided by your central bank (the Fed in the US, the ECB in Europe, the Bank of England in Britain etc.). Essentially, the central bank has opened a digital account for you which you can use to receive and pay money, the way you use your normal bank account app.How is this MCPay app helpful?In three fabulous ways, which I shall present in ascending order of importance.First, because with MCPay you can send and receive money for free, avoiding the terrible, inexcusable, fees charged by private banks – even the ‘fuel fees’ of crypto.The second, even greater, benefit is that the money you keep in your MCPay grows at the central bank interest rate – which is always higher than the measly rate private banks pay for your savings.Free transactions and higher interest on your savings would be good enough reasons to have the MCPay app. But, the truly mesmerising, hugely exciting benefit is the third one:The new app makes it possible for the Central Bank to pay you, and everyone else, a substantial personal dividend. Pay attention to see where this money will come from, why it is not inflationary, why it requires no new taxes, no new debt and no magic:You have heard of how private banks create loans from thin air, right? How they can turn, on average, $3 of new deposits into a new $100 loan? [Yes, lest we forget, only 3% of the money in our advanced economies come from the central bank – the rest is conjured up by private banks.]But this works in reverse as well! If bankers turn $3 into $100, were you to transfer $3 from your normal bank to your MCPay, to take advantage of free transactions and the higher interest rate, you will have annulled your banker’s opportunity to create $100. In other words, as you transfer $3 from your bank to your new MCPay account, the total quantity of money in the economy would fall by, $100 minus $3, $97. Would this not be bad for the economy? It sure would be if nothing was done about it.But wait. Suppose the central bank were to create $97 for every $3 transferred to someone’s MCPay and credit that extra $97, equally, to everyone’s MCPay account. Bingo! Do you see now how a personal dividend was made possible without new taxes, new debt or potentially inflationary increases in the quantity of money?Now, please do not think that this a theoretical discussion. Yes, our governments, in the pockets of financiers as they are, are not interested in giving you the option of an MCPay app.But, with Donald Trump at the helm and his GENIUS Act on the statutes, they are busily handing over this incredible power to create money not to society, not to a Monetary Commons, but to Big Tech and Wall Street. How? By shunning the MCPay app that would benefit you, everyone, equally, and pushing instead for so-called stablecoins issued by privateers, mainly Big Tech and Wall Street, for their benefit.But how much money could we expect to receive as a personal dividend if we were to create a monetary commons? The answer is: a lot!The US Treasury recently predicted that around worth $6.6 trillion of US bank deposits will be transferred to stablecoins – the private version of MCPay from which you will benefit not at all. Yes, $6.6 trillion, that is more than six thousand billion dollars.If such a sum were to be transferred to the monetary commons, to our MCPay accounts, keeping the quantity of money in the US constant would require that the Fed credits $213 trillion to everyone’s MCPay accounts. That’s considerably more than $600 thousand for each woman, man and child resident in the US! And similarly in Britain, Europe, Japan etc. A sizeable trust fund for everyone.This is a remarkable opportunity for making a difference to our awfully divided societies.We must seize it. For the benefit of the many, not the few.Of course, the few – beginning with the bankers – will scream blue murder.They will do their utmost to stop this from happening.They will fearmonger like crazy, eager as they are to usurp the lion’s share of the money that society generates collectively.They will try to terrorise you with tales of calamities that will befall you if this Monetary Commons were to be created.They will prognosticate cataclysmic inflation – even though the whole point of the personal dividend is to keep the money supply constant.They will terrorise you with the prospect of new taxation and new public debt – even though they understand that there is no need for new taxes or new public debt to pay you a substantial personal dividend.To appeal to your social conscience, they will tell you that a Monetary Commons is Elon Musk’s and the libertarians’ way to dismantle social security – even though there is no reason to cut social security in any way to fund everyone’s personal dividend.They will bombard you with the spectre of Big Brother, likening the Monetary Commons to a Chinese Communist Party ploy to have the central bank follow your every transaction – even though they know that MCPay can easily be built on distributed ledger technology that guarantees privacy to each while preventing the authorities from manipulating the money supply without the public noticing.As they scream and shout and terrorise you, you will know:Bankers just hate the idea of going back to the role of intermediaries, of borrowing from Jack to lend to Jill.They are only interested in maintaining their monopoly over the money system – and to extend it now that digital money enhances society’s capacity to create even more new money, a capacity that they want to privatise when we should want to share equally.So, let us ignore the shrieks of the moneymen and let us use new tech to share better the benefits from our collective capacity to create money.Let’s make building a Monetary Commons our common goal.It won’t cure all of our deeply exploitative society’s ills. But it will go a long way to cure many and, perhaps more importantly, it will give the many a sense of their power.FOR MORE ON THE MONETARY COMMONS (including FAQ and simulations0 VISIT https://monetarycommons.com/

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On 26th July 2025, delegates from over 25 countries convened in London for the inaugural conference of the Global Alliance for Palestine (GAFP). This new transnational initiative seeks to transform rising global solidarity for Palestine into coordinated political action. As a member of the steering committee, I was asked to explain why we need this Alliance. Here was my message to participants.Greetings from me, Yanis Varoufakis, to all of you who have gathered so that we work, together, toward a Global Alliance for Palestine.We need a Global Alliance for Palestine because the West, its governments and big business, constitute a Global Alliance in Support of the Genocide of Palestinians.But let me be a little more precise.The West says it wants a Two State SolutionNetanyahu’s life project, like that of the vast majority of political actors in Israel, is to use intense violence to make the Two State Solution impossibleHamas responds with its own violenceIsrael reacts by calculatingly raising its violence to the Nth powerThe West then ritualistically condemns Hamas & backs NetanyahuInevitably, the West’s claim to want a Two State Solution withers into a tacit support of Israel’s genocideThus Israel secures the backing of a Global Alliance in Support of the Genocide of Palestinians.Isn’t it time that we, people who oppose genocide, who mean it when we say NEVER AGAIN – isn’t it time that we formed a Global Alliance for Palestine?I believe it is! Let’s do it then.

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To free ourselves from our technofeudal overlords, we must think like Karl Marx. The corporations would asset-strip our brains, but we can take back controlA young woman I met recently remarked that it was not so much pure evil that drove her berserk, but rather people, or institutions, with the capacity to do good who instead damaged humanity. Her musing made me think of Karl Marx whose quarrel with capitalism was precisely that: not so much that it was exploitative but that it dehumanised and alienated us despite being such a progressive force.Preceding social systems may have been more oppressive or exploitative than capitalism. However, only under capitalism have humans been so fully alienated from our products and environment, so divorced from our labour, so robbed of even a modicum of control over what we think and do. Capitalism, especially after it shifted into its technofeudal phase, turned us all into some version of Caliban or Shylock – monads in an archipelago of isolated selves whose quality of life is inversely related to the abundance of gizmos our newfangled machinery produce.Young people feel this. But, the backlash against migrants, identity politics, not to mention the algorithmic distortion of their voices, paralyse them. But here re-enters Marx with advice on how to overcome this paralysis – good advice that lies buried under the sands of time.Take the argument that minorities living in the West should assimilate lest we end up a ‘society of strangers’. When Marx was twenty-five years old he read a book by Bruno Bauer, a thinker he respected, making the case that, to qualify for citizenship, German Jews should renounce Judaism. Bauer’s argument was that Germans lacked freedom. So, he asked: “How are we to free you, Jews?” As Germans, he continued, Jews had a duty to help emancipate Germans, humanity more broadly – not agitate for their rights as Jews. Marx was livid.Though the young Marx had no time for Judaism, indeed for any religion, his passionate demolition of Bauer’s argument is a sight for sore eyes:“We ask the converse question: Does the standpoint of political emancipation give the right to demand from the Jew the abolition of Judaism and from man the abolition of religion?… Just as the state evangelises when… it adopts a Christian attitude towards the Jews, so the Jew acts politically when, although a Jew, he demands civic rights.”The trick that Marx is teaching us here is how to combine a commitment to religious freedom, of Jews, Muslims, Christians etc., with the wholesale rejection of the presumption that, in a class society, the state can represent the general interest. Yes, Jews, Muslims, people of faiths that we may not share or much like must be emancipated immediately. Yes, women, blacks, LGBT+ people must be granted equal rights well before any socialist revolution appears on the horizon. But, freedom will take a lot more than that.Shifting on to migrant workers suppressing the wages of local workers, another minefield for today’s younger people, a letter Marx sent in 1870 to two associates in New York City offers brilliant clues on how to deal not only with the Nigel Farages of the world but also with some leftists who have also bitten the anti-immigration bait.In his letter, Marx fully acknowledges that American and English employers were purposely exploiting Irish cheap immigrant labour, pitting them against native-born workers and weakening labour solidarity. But, for Marx, it was self-defeating for trades unions to turn against the Irish immigrants and espouse anti-immigration narratives. No, the solution was never to banish immigrant workers but to organise them. And if the problem is the weakness of the unions, or fiscal austerity, then the solution can never be to scapegoat migrant workers.Speaking of trades unions, Marx also has some splendid advice for them. Yes, it is crucial to boost wages to reduce worker exploitation. But, let us not fall for the fantasy of fair wages. The only way to render the workplace fair is to do away with an irrational system based on the strict separation of those who work but do not own and the tiny minority who own but do not work. In his words:«Trade unions» work well as centers of resistance against the encroachments of capital. [But] [t]hey fail generally from limiting themselves to a guerrilla war against the effects of the existing system, instead of also trying to change it.”Change it into what? A new corporate structure based on the principle of one-employee-one-share-one vote – the kind of agenda that can truly inspire youngsters who crave freedom both from statism and from corporations driven by the bottom lines of private equity firms or an absent owner who may not even know he owns part of the firm they work for.Lastly, Marx’s freshness shines through when we try to make sense of the technofeudal world that Big Tech, along with Big Finance and our states, have surreptitiously encased us in. To understand why this is a form of technofeudalism, something much worse than surveillance capitalism, we need to think as Marx would have of our smartphones tablets etc. To see them as a mutation of capital, or cloud capital, that directly modifies our behaviour. To grasp how mind-bending scientific breakthroughs, fantastical neural networks, and imagination-defying AI programs created a world where, while privatisation and private equity asset-strip all physical wealth around us, cloud capital goes about the business of asset-stripping our brains.Only through Marx’s lens can we truly get it: That to own our minds individually, we must own cloud capital collectively.

For the Guardian site, click here.

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ATHENS – Margaret Thatcher famously quipped that the problem with socialists is that, eventually, they run out of other people’s money. But what happens when bankers run out of other people’s money, as seems likely to happen soon? Either we end up with another calamitous financial meltdown or we innovate to serve the public interest in a manner Thatcher would have dismissed as socialist.Before I propose one such innovative response to the looming financial quagmire, one must understand the monetary transformation currently underway, owing to the steady rise of stablecoins. Unlike Bitcoin and other cryptocurrencies which are tethered to nothing and fluctuate like a yo-yo, stablecoins are issued by private corporations that promise that their tokens will faithfully track the value of the US dollar.There are good reasons why common people, not just criminals, want to use stablecoins: they offer a way to send money, especially abroad, that is cheaper, faster, immune to US sanctions, and more reliable than rickety inter-bank messaging systems such as SWIFT.There are even more reasons why financiers are keen to offer us their brand of stablecoin: by shifting the trading of shares, bonds, derivatives, and other securities onto their own blockchain, they can make trading much faster and more reliable. Moreover, if their stablecoin becomes dominant, they will own not only the market but also the currency in which trades are made, creating scope for gargantuan financial gains.But stablecoins are setting the stage for the next financial meltdown. For starters, their issuers have an incentive to issue more tokens than the dollars they keep in reserve to back their tokens. And, because stablecoin issuers keep a significant portion of their dollar reserves in banks, a bank run will cause a stablecoin run (a rush of requests to convert them into real dollars) which then triggers a cascade of bank runs.Moreover, a doom loop ties together stablecoins, shares, and bonds: once financial trading has shifted to blockchains “lubricated” by a stablecoin, a run on that stablecoin will threaten the stock market and the $29 trillion Treasuries market. And then there is the global fragility introduced by dollar-backed stablecoins issued outside the United States by companies that US authorities are unlikely to rescue if the need arises.How significant is the shift from the conventional monetary system to this jungle of private stablecoins? On June 17, the US Senate passed the so-called GENIUS Act. Its chief aim is to legitimize and boost stablecoin adoption. In essence, President Donald Trump’s administration is privatizing the dollar system for geopolitical, self-serving and ideological reasons. The US Treasury predicts that US bank deposits of $6.6 trillion (the equivalent of 660% of the annual US defense budget) will migrate to stablecoins on the GENIUS Act’s coattails. This is nothing short of an enormous time bomb planted at the foundations of our economies.So, what is the alternative? Suppose that US residents could download a Federal Reserve digital wallet from any app store. Imagine that they could then ask employers to deposit their pay into that wallet and even transfer money from their commercial bank accounts to take advantage of the Fed’s overnight interest rates as well as free transactions.Using the same blockchain technology of stablecoin issuers, the Fed could guarantee that every payment or transfer is utterly private, while enabling everyone to see how much money sloshes around the system in aggregate, thereby preventing the authorities from creating new money without everyone knowing.This would be the mother of all stablecoins, without any of the drawbacks. Speed, efficiency, and privacy would be combined with a higher interest rate on deposits (compared to commercial banks) and the copper-plated security that your digital tokens are 100% Fed-backed US dollars with none of the moral hazards or doom loops afflicting private stablecoins. Moreover, this public system comes with an additional advantage: it opens the door to a trust fund for everyone.Recall that, under the current system of fractional reserve banking, commercial banks create a lot more dollars from every dollar of deposits they receive (the so-called money market multiplier). Conversely, if the US Treasury is correct that $6.6 trillion of deposits are about to migrate from US banks to stablecoins, the overall supply of dollars is about to shrink dramatically. That will cause the Fed to raise interest rates substantially in order to allow banks to do likewise to stem the migration and the fall in the money supply – a disastrous outcome for the real economy.By contrast, following a mass migration of bank deposits to Fed wallets, the Fed does not need to increase interest rates. All it needs do is calculate by how much the money supply is falling and credit each resident’s wallet with whatever sum is necessary to keep the money supply steady. In essence, without the state having to raise new taxes or borrow a single cent, the Fed would be offering a substantial trust fund to everyone within this new public crypto network that functions like a truly novel monetary commons.Bankers will undoubtedly hate the idea. Deprived of their monopoly over payments and savings, Fed wallets would force them to function, as they ought to, like financial intermediaries, turning Jill’s savings into loans for Jack.Financial markets, too, will need to use the Fed’s new tokenized dollar for transactions, but without the exorbitant rents they would have received had they been allowed to privatize the tokenized dollar. Bankers and financiers will, for once, need to offer us services under circumstances that allow us to say no.This new monetary commons, including the sizeable trust fund for everyone, would grant us unprecedented freedom from bankers and financiers. And that’s why you will not be hearing about it from any of the mainstream political parties whose campaign financing depends on bankers and financiers.

For the Project Syndicate site, where this article was originally published, click here.

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Mια συνέντευξη, που δεν θα έδειχνε ποτέ κάποιο από τα κανάλια της ολιγαρχίας, για τα 10 χρόνια από το ιστορικό ΟΧΙ που αναπτέρωσε τους λαούς της Γης. Ο Γραμματέας του ΜέΡΑ25 Γιάνης Βαρουφάκης απαντά για όλα στις ερωτήσεις των: Μαριάννα Πυργιώτη (πολιτική αναλύτρια), Κωνσταντίνου Πουλή (the press project) Γιάννη Κιμπουρόπουλου (Εφημερίδα των Συντακτών)

The post 10 ΧΡΟΝΙΑ ΑΠΟ ΤΟ ΙΣΤΟΡΙΚΟ ΟΧΙ: Ο Γιάνης Βαρουφάκης συζητά με Μ. Πυργιώτη, Γ. Κιμπουρόπουλο, Κ. Πουλή appeared first on Yanis Varoufakis.

On the day the Financial Times published its latest article whitewashing the criminally insane troika’s  (comprising the EU Commission, ECB and IMF) hatchet job on Greece, which has rendered the country a permanently bankrupt colony, Jacobin published this interview (read here, listen here) in which I lay down three basic facts:First, the referendum ten years ago was called by a PM who was looking for a way to surrender to the troika, hoping to lose the referendum – so as to gain a democratic mandate for his surrender. To their great credit, the Greek people defied him with a spectacular 62% NO (Oxi) vote. That their PM overthrew them, the people, is one of the greatest tragedies in modern political history and the Left’s most serious defeat since the era of Margaret Thatcher.Secondly, while it features as the new El Dorado for vulture funds and assorted predators, Greece is less viable today than it ever was.Thirdly, by crushing Greece in this manner, in order sequentially to impose  universal austerity across the entire EU, including in Germany, the troika depressed investment at a paneuropean level. While energetic money printing by the European Central Bank refloated Europe’s financial sector and equity markets, the combination of gigantic liquidity and low aggregate demand caused net productive investment to tank. More than a decade of next to zero net productive investment has led to Europe missing out on at least one industrial revolution (green energy, electric cars etc.) Greece’s financial carpet bombing was, in short, the prelude of Europe’s current sad state of affairs – including the rise of the ultra Right.

A transcript of the Jacobin interview follows: 

Daniel Finn: At the beginning of 2015, when Syriza was able to form a government, what was the strategic rationale underpinning the efforts to roll back the austerity programs that the troika had imposed on Greece over the past several years?Yanis Varoufakis: On the day we formed a government, we had completed five years of languishing at the bottom of austerity’s barrel, with a population that was engulfed in a humanitarian crisis. We had suicides; we had deaths of despair; we had people who went untreated because they couldn’t afford medicine; we had a reduction of pensions and wages by 40 percent.

Due to the faulty architecture of the eurozone, following the bankruptcy of the German and French banks, Greece was the country whose state went bankrupt. It began on Wall Street, then it moved on to Dubai, then it went to the French and German banks.

They stopped refinancing the rather large public debt of the Greek state — which was large because the private debt was low, so it was the exact opposite of Ireland, for example. Total debt was not great in Greece. It was just that the public sector was bloated in terms of its debt. At that point, the Greek state became officially bankrupt.

Instead of accepting that reality, the powers that be — who were absolutely determined to make sure that European citizens bailed out the French, German, and Italian banks, and to some extent the Greek banks as well — decided to transfer the losses of the banking system onto the shoulders of the weakest people.

In practical terms, that was the equivalent of not being able to repay your mortgage because your income has tanked and being forced to take out one credit card after another at high interest rates to pretend that you are still repaying your mortgage. If a friend of yours were to do that, you would immediately say, “Stop doing it — this is suicide.”

We were elected to stop this suicidal dynamic. I accepted the challenge of being part of that government, taking a position in the electric chair of the finance ministry of the most bankrupt European state for a very simple reason. I had presented to my colleagues — to the prime minister, Alexis Tsipras, and his team — a double plan.

The first part of the plan concerned what to do to avert the blackmail that was definitely going to come from the troika and from the financial sector: “Either you sign on the dotted line for another credit card, or we will shut down your banks.” The first part of the plan was the deterrence plan — how to deter that kind of financial terrorism, as I call it.

The second part was what would happen if we failed to deter them and they did close down our banks, as they did in the end. How do we issue our own currency in order to break free from this debtors’ prison?

That was what we entered government with — at least that’s what I thought we entered the government with, until, by the time of the referendum, I realized that my own leadership was not interested in seeing this through. They capitulated, I resigned, and the rest is history, as they say.

Daniel Finn: What was the experience of negotiating with the EU during the first half of 2015, looking at the various actors involved — the European Commission, the European Central Bank [ECB], and the different national governments with the various hierarchies between smaller and larger states or between “core” and “peripheral” states? You famously compared the experience of trying to make concrete economic arguments to some of these interlocutors to getting up and speaking Swedish and being greeted with total incomprehension.

Yanis Varoufakis: Let me say that I didn’t arrive in Brussels, Berlin, or Frankfurt with any great expectations of a rational debate. Yet even though I brought very low expectations in my suitcase, I have to admit that I was taken aback by the orchestrated irrationality and the incredible levels of incompetence as well as cynicism that I encountered.

I was taken aback by the orchestrated irrationality and the incredible levels of incompetence as well as cynicism that I encountered.

There were three different dimensions to this experience. First, in private meetings, they startled me because they were incredibly accepting of my narrative at first. I have said this many times, and nobody has denied it.

When I met Christine Lagarde for the first time — she was the managing director of the International Monetary Fund at the time, before she moved over to the presidency of the ECB — she astounded me, because she was extremely sympathetic to my analysis of what had gone wrong and why the austerity programs could not work.

She said, “Of course, Yanis, they cannot work — you’re right.” She actually criticized me from a position to the left of my own thinking because she said that I was being too modest and too moderate in what I was demanding on behalf of my people. I thought, “That was easy — if we can proceed in that way, my job will be done before I even know it.”

However, she then added immediately, “But Yanis, you have to understand that we have put a lot of political capital into this program, and your career and mine both depend on going along with it.” I said to her, “But Christine, you know I don’t give a damn about my political career. I have a mandate from the people, and that’s all I care about. If I stop being finance minister, so what? That’s not my issue.”

Immediately I became persona non grata because I wasn’t playing along. That was the first dimension — I promised you three. At the personal level, I was astounded because they seemed to understand exactly what kind of crime against logic they had been implementing for years before I arrived on the scene.

Then there was a second dimension: the gross incompetence of those people. That astounded me even more, because I was expecting technocrats of some competence — the kind of people that you encounter when you talk to Goldman Sachs types. They may be a clear and present danger for humanity, but nevertheless, they know their stuff. They know their bonds, they know their derivatives, and they know the mechanics of the capitalist financial system.

That wasn’t the case with the troika. I’m not talking about Mario Draghi but rather about the underlings that they were sending to us to have discussions about this and that — privatizations, VAT rates, and so on. If they had been students of mine, talking as a professor, I would have simply failed them in semester one of the first year of their undergraduate degree.

If the troika officials had been students of mine, I would have simply failed them in semester one of the first year.

It was remarkable. That was another shock to my system. The third dimension was the pure cynicism of the people mentioned above. When I went to my first meeting of eurozone finance ministers, I went in there with the intention of starting a discussion along collegial lines. I didn’t go in there with any view to be confrontational — exactly the opposite.

If anything, I was far too modest, as Lagarde accused me of being. I said something that I thought was totally in tune with what I imagined the ideology and manners of those people to be:

Ladies and gentlemen, I know that most of you don’t want to see me here, because I represent the radical left of Greece and you would rather deal with our predecessors. But this is what the Greek electorate decided, so now let’s be honest with one another.

There is a program of austerity and bailouts that previous governments signed up to. And because there is, whether I like it or not, a continuity in the state’s obligations to other member states, it’s not the case that you have a new government and all the obligations of previous governments are wiped out.

I acknowledge this continuity of government, despite the fact that we have a new mandate, and our new mandate is to renegotiate and essentially annul those obligations. So what happens in a liberal democracy when two important principles clash?

What are the important principles? One is continuity of government and state. The other is the democratic mandate of a new government. When two different, contradictory principles clash in a liberal democracy, democrats sit around the table and find a compromise.

When I was saying that, I was experiencing feelings of self-doubt, asking myself why I was being so damn moderate. After all, I had just been elected as the finance minister of a radical-left government. But then I thought, “It’s a good way to start the negotiations on a positive, collegial note.”

Yet lo and behold, the late Wolfgang Schäuble, who was the German finance minister, angrily demanded the floor. Clearly, he was discomfited by what I said. Without any introduction welcoming me to the Eurogroup, which is what would normally happen, he went straight to the point. He said, “Elections cannot be allowed to change economic policy in the Eurogroup.”

I have to tell you, I didn’t expect such a degree of cynicism. Of course, it prompted me to say — and I don’t regret saying it — that this must be excellent news for the Communist Party of China, because they also think that elections should not change economic policy.

I didn’t mention the fact that in China, they do change economic policy. They don’t need elections, but when the facts change, economic policy changes. That’s the difference when it comes to Europe. We have elections and governments change, but economic policy — especially failed economic policy — does not change.

Daniel Finn: What impression did you gather from the governments of countries that were considered to be in a similar situation to Greece at that point? Ireland and Portugal had also been forced into troika programs, and then you had Spain, which wasn’t formally under the tutelage of the troika but was receiving explicit instructions from the ECB and the commission about cuts to make. You also had Italy, which had a very significant debt problem. Were the governments of those countries more sympathetic, or did they join the unified bloc that you were facing on the other side of the table?

Yanis VaroufakisThere were three groups of countries. First, there were representatives of countries that were within the “vital space” — don’t translate it into German, it’s not a good idea — of the Federal Republic of Germany. This group included countries like Slovakia and Latvia that had imposed austerity upon themselves well before the 2008 crisis.

They had wrecked their own populations with austerity, and they were more royalist than the king, or more German than the German finance minister. They were the most aggressive ones, the ones that were talking about “Grexit” from the beginning — in other words, about jettisoning Greece from the euro, if I dared to continue challenging the memorandum of understanding [MOU] that I had inherited.

They were the bulldogs of Wolfgang Schäuble. He didn’t have to speak, because they would speak first and be so aggressive and abusive that when Schäuble spoke, he seemed like a more reasonable version of them. Allow me an aside: this is more or less the same group that today are gung-ho about not ending the war between Ukraine and Russia. I close the bracket, but I think it’s an important connection to draw.

Then there was a second group of countries that had, like Greece, gone under the iron curtain of the austerity/bailout programs. I’m referring to the countries that you mentioned already — Portugal and Ireland, of course, but also Spain, because Spain had already gone through its own bailout. It was a half-baked one, and it only involved its banks, but still it was officially in a bailout.

Now they were terrified that our government might secure better terms for the people of Greece, because they had subjected their own people to so much unnecessary and vicious pain with their austerity programs. You think of what was going on in Ireland, in Portugal, in Spain for that matter. If our tough negotiating stance were to yield even some small benefits for the Greek people, they were absolutely terrified that their own people would turn against them and say, “Why didn’t you fight for us like the Greek government is fighting for the Greek people?”

They were all absolutely horrified and terrified by the thought that Greece would become viable as a result of the election of the left-wing government.

They were perhaps even more motivated than Schäuble’s bulldogs to see us fail. They had some sympathy with us because they were in the same boat as we were, but the political representatives were absolutely horrified by the thought that we might succeed in the task of renegotiating our MOU.

There was also a third group of countries like Italy and France — don’t forget France — who feared that they might need a bailout too. They had the most sympathy with us, and they were even more horrified than the other two groups by the thought that Schäuble and Angela Merkel would take out on them any frustration that they felt toward us by pushing them into a bailout.

In other words, what I am trying to describe is a Eurogroup that was impossible to navigate on the basis of rational thinking and economic arguments, because the only determinant of the behavior of those finance ministers was fear. They were all absolutely horrified and terrified by the thought that Greece would become viable as a result of the election of the left-wing government.

If you wanted to create a decision-making body that would simply not pay any attention to the viability of the Eurozone and its member states and care only about making sure that they were prepared to do anything so that nothing would change, that’s the kind of decision-making body that you would create.

Daniel Finn: There was a moment in Irish politics not long after the outcome of the crisis in Greece where one of the government ministers from the Labour Party taunted the opposition parties by saying, “Who talks of Syriza now?”Yanis Varoufakis: Let me make the point that this is why I don’t forgive my former comrades for capitulating. It is not only because of what they did to the Greek people, but also because they were, after Margaret Thatcher, perhaps the worst enemy of the Left across Europe, and maybe worldwide.Daniel Finn: If we come to the moment of decision in the summer of 2015, after there had been several rounds of negotiation that didn’t appear to be going anywhere, the key European players were still insisting on continuity of economic policies with the previous memorandums. Instead of submitting to the pressure at that moment, Alexis Tsipras announced that he was going to call a referendum on the terms of the proposed agreement. How was the decision made to call the referendum? What was the dynamic of the campaign, and how did Tsipras end up accepting an even more draconian austerity program shortly afterward, in spite of the outcome of the vote?

Yanis Varoufakis: I hope you will forgive me if I correct a basic misunderstanding that is embedded in the question in a way that is totally understandable. This is not how I saw or experienced things. I didn’t see the referendum as a way of continuing the fight.

Sadly, Alexis Tsipras called the referendum not to win it but to lose it. He had already capitulated.

Sadly, my former comrade Alexis Tsipras called the referendum not to win it but to lose it. He had already capitulated, and I was already on the way out while maintaining my position in the finance ministry.

In order to explain what happened with the referendum and how we got to the third bailout program, which wrecked the Left and wrecked the Greek people and rendered Greece a nonviable social economy, I need to start right at the beginning. As I said earlier, Greece was in a debtors’ prison, unless our debt was substantially written off or manipulated in such a way as to be the equivalent of a write-off.

There are very innovative ways of disguising a write-off — debt swaps and this and that. This is what I was proposing to them as a face-saving exercise for the Troika. If you are going to do that, the only way you’re going to be able to do that is if you are ready to walk away. You have to be prepared to imagine exiting the negotiating room and saying, “Folks, there’s an impasse. I’m going to go my own way.”

What does going your own way mean? It means printing your own currency and defaulting on your debt in euros, because if you don’t have the euro, you cannot repay your huge debt in euros, and you suffer the consequences for that, but you regain your autonomy and monetary sovereignty, and you try to start afresh. Unless you’re prepared to do that, there’s no point in entering the negotiating room.

This is what I had said to my colleagues. Of course, it’s not just a question of pressing the nuclear button and saying, “I am stepping out, and I am leaving the eurozone.” There have to be gradations — you must have weapons in between that you must activate to signal your intention to walk out if need be. If you don’t do that, you might as well not get elected.

You’d never enter a negotiation if you were a trade unionist where you couldn’t even imagine walking out. That’s negotiations 101. The only reason why I accepted the finance ministry was because I had put to Alexis Tsipras a very specific proposal of what we needed to do.

I said to him, “Look, the moment we get elected, they will call you from Frankfurt or Brussels or Berlin, and they will say to you, ‘Congratulations, sign on the dotted line or we close down your banks.’ You have to have an answer to that. You have to have a deterrence plan for stopping them from doing it.”

You’d never enter a negotiation if you were a trade unionist where you couldn’t even imagine walking out.

I had come up with an idea. I still believe that if I had been allowed to use that weapon, they would not have shut down our banks. It was a technical issue, but effectively it concerned a small amount of debt that we owed to the ECB. If I was to restructure that debt, writing off part of it or even delaying repayment, it would have a knock-on effect.

I could have done this simply with an executive order from the ministry of finance — I had it on my desk; all I needed to do was to sign it. The ECB president Mario Draghi only had one thing on his mind: how to save Italy from falling into the same black hole by buying Italian public debt. For complicated reasons, he would not have been able to buy Italian public debt if I had been allowed to put my signature to that order.

That was my deterrence plan. I did essentially tell Draghi that if he shut down my banks, I was going to sign the document, and he wouldn’t be able to buy Italian debt. I believe that could have been enough to prevent that major move, which was effectively financial terrorism, to shut down our banks in order to blackmail the Greek people into accepting the third bailout.

The tragedy was that early on, I realized that my prime minister was very reluctant to let me do that. We had agreed on it as a condition for me accepting the Finance Ministry appointment, but he was preventing me from doing it. He was postponing action, saying, “We’ll do it next week.”

At some point, I discovered that two and a half months after I became finance minister, a message went from the office of Tsipras to Draghi’s team at the ECB: “Don’t worry about Varoufakis; we won’t let him do it.” This was a bit like sending David into the battlefield against Goliath having stolen his catapult.

I had a catapult — I thought it was a nuclear weapon — maybe it was a catapult, maybe it was a nuclear weapon. But it was stolen. I knew early on that it wasn’t looking good. We were elected in January. By June, the negotiations were not going anywhere, because why would they negotiate with us when our side was sending messages that we were not prepared to walk away and use our weaponry?

The reason why I didn’t resign was because I believed that as long as there was a 5 percent chance that the prime minister would come to his senses and fight on, I needed to be there to help him.

In addition, our people out there had no idea of what was going on behind the scenes. They were jubilant that at long last, there was a government fighting for them. If I had simply resigned out of the blue, it would have been a disaster for the morale of our people.

By June 20, it was clear that my prime minister was trying to surrender. But they wouldn’t let him, because they wanted to drag him through the mud. As you mentioned, you had the Labour Party minister telling the Sinn Féin people in the Irish parliament, “this is what happens when you vote for parties like Syriza.” Mariano Rajoy, the conservative prime minister of Spain, said to the Spanish people, “This is what you will get if you vote for Spain’s Syriza,” meaning Podemos.

At that point, they wouldn’t let him surrender. He had sidelined me, even though I was still the finance minister. I was there simply egging him on, “Come on, overcome your urge to surrender. Let’s keep fighting.” He called the referendum because he saw it as a way out.

He was convinced we would lose it, which was not so irrational of him when you think about it. In the first election of 2012, our party jumped from 4 percent to 17 percent of the vote. In 2015, we formed a government with 36 percent of the vote. Thirty-six percent is not a crushing majority — the majority were still voting against us.

Even though we had immense support during those five or six months of fighting with the troika, you have to remember that it shut down the banks so there would be five working days before the referendum on Sunday with people not able to access their own deposits. Tsipras was thinking that with every day of the banks being shut, we would be losing support, and all you need to do to lose a referendum is not get 51 percent.

They shut down the banks so there would be five working days before the referendum with people not able to access their own deposits.

From his perspective, he thought he was going to lose it. It wouldn’t have been such a great loss for him, because if he had scored 40 or 45 percent in favor of saying “no” to the troika, he would have pushed our percentage from 36 to 40 or 45 percent. He would have been able to claim this as a personal victory, while at the same time, he would have had a mandate to surrender to the troika, which he didn’t have before.

That is why, on the night of Sunday, July 5, he collapsed when that remarkable number lit up on our screens, with 61 percent saying “no” to the troika offer. I went to his office, and it was like a wake. He had black circles around his eyes. I went in there celebrating, and he was on the floor.

He said to me, “It’s time to surrender.” I said, “No, it’s exactly the opposite — people out there are celebrating — we have an ethical and political duty to fight on.” That’s how it happened.

Daniel Finn: How would you summarize the consequences of the 2015 crisis and its outcome for Greek society and politics over the last 10 years?

Yanis Varoufakis: To begin with, let me draw a parallel between a prison riot and what happened in 2015. When prisoners living under horrific circumstances in some godforsaken prison riot and take over the prison, they burn mattresses, the cameras arrive, and it’s all over the news. It’s a big issue.But the moment the riot squad or the army comes in and crushes the rebellion, two days later, nobody mentions it. It doesn’t mean that the conditions in the prison have improved — maybe they’re worse. Sadly, this is too close for comfort as a metaphor for what happened to Greece.

Financiers around the world love Greece. It is their wet dream. I don’t believe they can have higher profit rates or rent extraction rates anywhere in the world than in Greece — that’s why they love it. When they talk about the “Greek success story,” and they clap Greek government ministers visiting Davos or the City of London or Wall Street, they have a very good reason for this.

Let me give you an example. We are a country of ten million people. As we speak, there are 1,100,000 dwellings being foreclosed by the vulture funds that have purchased the nonperforming loans of the families and small businesses that until now owned these pieces of real estate. We are talking about 1,100,000 apartments, houses, and small shops in a population of ten million.

A particular example concerns a person I know because I’ve worked on her case. My party MeRA25 has been trying to help with particular cases, not just hers. Her name is Maria. Maria purchased in 2008 an apartment worth €250,000. She put down €50,000 as a deposit and borrowed the remaining €200,000. She sold a plot of land and managed to repay much of her loan very quickly.

Out of the €200,000 that she had borrowed on a twenty-five-year-old mortgage, she repaid half of it, so she only owed €100,000. She was doing very well. Her business was doing okay.

But in 2011, everything collapsed because of the Great Depression that hit Greece. She lost her shop and her income, and now she had that €100,000 outstanding debt on her mortgage that she couldn’t repay. That €100,000 became €200,000 with interest and the penalties for delayed payments.

A vulture fund with its base in Ireland and its bank account in the Cayman Islands bought that €200,000 loan from the Greek bank that had issued it in the first place.  It paid €10,000 for it, so they paid €10,000 in order to be able to extract €200,000 from poor Maria. Now they are evicting her — they are putting that apartment on sale for something like €150,000.

She gets nothing, even though she’s already repaid €150,000 of the original €250,000. Meanwhile, they have paid €10,000, yet they will collect €150,000 — work out the profit rate. That money will leave the Greek circular flow of income and go to the Cayman Islands legally.

Why are the vulture funds celebrating Greece while the Greeks are suffering? This is not really a paradox when you look at it closely. To give a more complete macroeconomic picture, in terms of GDP, we have more or less the same national income today that we had in 2009. It dipped very badly, and now it has picked up again.

We have the same number of euros today as in 2009, but their purchasing power is 40 percent below what it was.

But we had huge inflation during that period, like everybody since 2022. We have the same number of euros today as in 2009, but their purchasing power is 40 percent below what it was. In addition to that, because of the troika’s interventions, there has been a big increase in VAT from 19 to 24 percent, as well as huge taxes on labor, housing — everything. The state is extracting twice as much in taxes as it was in 2009.

Real disposable income today is 44 percent below what it was in 2009. As well as that, the bailout agreement that I wouldn’t sign has committed Greece up until the year 2060 to have a primary surplus that is gigantic. About €15 billion comes out of the economy and goes to the troika every year. If you add to that our current account deficit of €25 billion, we are essentially borrowing €25 billion in order to make ends meet as a society.

What I have just described to you is, independently of your politics, a nonviable social economy. Twenty percent of the population is doing better than ever — the ones who are on the good side of the troika and in the pockets of the oligarchs. But 80 percent are not.

They are not up in arms so much as they are depressed. They are staying at home and licking their wounds. They are privatizing their nightmares and whatever hopes they have left. When they hear people outside of Greece celebrating the “Greek success story,” I go back to my metaphor about a prison riot that has been crushed. The conditions in the prison have gotten worse, but nobody is talking about it.

Daniel Finn: How would you assess the lasting legacy or legacies for the EU of the way that the eurozone crisis was handled, and in particular the way that Greece was dealt with in 2015?

Yanis Varoufakis: I have no doubt that the historians of the future will look at the inane handling of the inevitable euro crisis — inevitable because of the architecture of the euro — and the way that Greece was used as a guinea pig for the combination of harsh austerity for the many and money-printing for the bankers, and mark it down as the reason why Europe is about to enter (or has already entered) a possible century-long decline.I remember having this conversation with Wolfgang Schäuble. When I was talking to these people, I was not simply an advocate for the Greek people. I was that, of course — that was what I was elected to do; that was my mandate. But I was speaking on behalf of Europe as a whole.

I was saying to them, “Look, we created the euro in a terrible way. The architecture was as if we had designed it in order to fail. It was clear from the very beginning. Think about it. We created a central bank for twenty countries. The central bank didn’t have a treasury, and there were twenty treasuries that didn’t have a central bank.”

The crisis was an opportunity to reconfigure and improve the architecture of the euro. But austerity was a means to avoid doing that.

It was like removing the shock absorbers from your car and driving it into a ditch. That was what we did. The crisis was an opportunity to reconfigure and improve the architecture of the euro. But austerity was a means to avoid doing that, instead using the money-printing capacity of the ECB to keep financial markets afloat. They printed €8 or €9 trillion to give to the financial markets while practicing austerity for the many.

What happens when you crush the spending power of the people and you give lots of money to big business? Big business collects this money — of course, it’s free money; why wouldn’t they take it? But they look outside the window of their skyscraper in Paris or Frankfurt, and all they see are impecunious masses.

They’re not going to invest, because the many out there can’t afford to buy high value-added goods. But they have this money that has been printed and given to them, so what do they do? They go to the stock exchange and they buy back their own shares.

Their share price goes through the roof, and their bonus is connected to their share price, so they are laughing all the way to the bank. They go and buy a new apartment, a new yacht, more Bitcoins, a work of art. Asset prices go up, while the many are still impecunious and there’s no investment.

After fifteen years of that, it’s the end of Europe. It is the reason why Germany is now deindustrializing. It is deindustrializing because it did not invest anything in the last fifteen years. The managing directors and the members of the board of directors were doing splendidly, but they were not investing.

While the Chinese were investing their heads off and Elon Musk was investing in Tesla, SpaceX, Starlink, and so on, Europe had zero net productive investment for something like sixteen or seventeen years. That is preposterous. The result is that now, Europe is dying. If people ask — and they should ask — why it is that fascism is having a second or third wind, it is because this is what happens when you have something like 1929.

Our 1929 happened in 2008, and then you had governments (like the one I was in) of the radical left capitulating. You had social democrats imposing policies that were far worse than what Margaret Thatcher did in Britain in the name of social democracy in countries like Germany, France, Greece, and Italy. The only people who will benefit politically from that are the neofascists, the manosphere, the racists.

We brought the European left down with us because we had a chance to make a difference, and we blew it.

The story of Greece is not just about Greece. For some reason, this little country of mine has been at the beginning of major disasters. I don’t know what it is about this place, but if you think about it, the Cold War began here. It didn’t begin in Berlin — it began in the streets of Athens in December 1944. That was the first incident. The Truman Doctrine, which was the beginning of NATO and the Cold War, was written by President Harry Truman for Greece.

In 2009–10, we also started the euro crisis. This is why I think that the record of the Greek left — and I include the party I served in — is inexcusable. We brought the European left down with us because we had a chance to make a difference, having been the first country, the first domino. And we blew it.

Daniel Finn: Across Europe and North America, there’s a general sense of narrowing horizons, with much greater pessimism on the radical left. Instead of seeking to supplant the established center-left parties in countries like Spain and Portugal, the main aspiration in the past few years has been to push the center left to do a bit more in terms of social expenditure than it would do otherwise.While some of the policies that have been enacted there might be welcome to people and make some difference to their lives, it’s clearly a long way from the aspirations that were being put forward in the middle of the last decade. In other countries, it’s not even a question of pushing that far — it’s about holding the line against the rise of the far right, which clearly has the wind in its sails. Where do you think the Left might go about beginning to shift the balance of forces and opening up new horizons of possibility?

Yanis Varoufakis: In the interest of full disclosure, I’m not a commentator — I’m a participant. I lead MeRA25, our radical left-wing party in Greece at the moment, and I’m part of DiEM25.This is important to note, because the reason why I’m part of this movement is because we reject gradualism. We reject the logic of the lesser evil — of having to choose between the center left and the center right. We reject both. We consider the center left to have been far more responsible for the rise of the Right and far more responsible for depleting the social fabric of Europe.

We reject the logic of the lesser evil — of having to choose between the center left and the center right.

It was the center left, let me remind you, that invented austerity in the interest of the lesser-evil logic. It wasn’t Schäuble or the Christian Democrats in Germany — it was Peer Steinbrück of the Social Democrats who imposed austerity when he was the finance minister. Before that, it was Gerhard Schröder who introduced the Hartz IV reforms that crippled the working class in Germany.

It was PASOK here in Greece who introduced the first bailout. You cannot push the center left to do something that the powers that be — the financiers, the troika, the ECB — will not allow them to do. In the end, they don’t even want to do it themselves. They merely want to appear as if they are doing it.

When you are facing a systemic crisis as we have been since 2008, and the gradualism of the radical center — which involves both the center right and the center left — is the real source of energy and dynamism for the fascists, then the only thing you can do is to rise up against both, since they are Tweedledum and Tweedledee. In the EU today, you have Ursula von der Leyen, who is a warmongering, half-crazed, genocide-supporting president of the European Commission, with the support of the right-wing European People’s Party and the center-left Socialists and Democrats.

This is not a time to say, in the United States, for example, that Joe Biden is a little bit better than Donald Trump: “Maybe you should vote for the guy that armed the hand of Netanyahu to carry out the genocide.” No, we won’t. We have to fight both of them.

 

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My hopes these days spring not from Europe nor from the United States. Let me be frank on this. I take my hat off to the young people particularly, but not only young people, to Jewish comrades who went out on the street to demonstrate for Palestine, who were beaten up by police, who were arrested who were harassed, who lost their jobs (I have colleagues in Germany from our party MeRA25 who lost their jobs). I take my hat off to them and I’m very pleased that there is this push back.But allow me to be also critical of our own people, myself included. Allow me in this context to draw a comparison between the protesters against the Vietnam war in the 1960s and the protesters today in the United States and in Europe. Back then, in 1968, 1969, 1970 the anti-Vietnam war movement held this strong belief that if Vietnam frees itself from imperialism, from the United States’ army occupation, that will be connected somehow to their own project in the United States, in France, in Germany, in Britain to liberate their own societies from oppression from the capitalist yoke – to put it in old-fashioned leftwing terms. There was this hope that the anti-imperialist war campaign goes hand in hand with their own liberation.Today that doesn’t happen. The great boys and girls, the men and women who demonstrate in the campuses of the United States at great risk to themselves as we have seen, especially under Trump, have no hope in their hearts or minds that America will be liberated. The same here in Europe: The good people who demonstrate in Berlin, in Munich, they are doing it for the Palestinians. This is fantastic, this is brilliant. But, do  you know what I lament? I lament the fact that they do not connect the fight to liberate Palestine with a fight to liberate Munich, with a fight to liberate Brussels, with a fight to liberate the British working class from the yoke of the people who are actually keeping them down, not leaving them behind, but holding them down.This works both ways. The fact that they don’t hope anymore that we can liberate Europe means that our capacity to be helpful to the the cause of Palestinian liberation is circumscribed and vice versa. However, when I see similar movements, similarprotesters in South Africa, in Namibia in Malaysia, in Latin America, supporting the Palestinian cause you can still see what used to be the case in the 1960s and early ’70s in Europe and in the United States.You can still see that these young people are connecting the Palestinian liberation struggle with their own liberation struggle and I think that creates the feedback – the positive feedback effect between the local liberation struggle and the Palestinian liberation struggle which is good both for Palestine and for the Global Majority.

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Yanis Varoufakis, Thomas Piketty, Nassim Taleb, Jayati Gosh, Michael Hudson,  Giuseppe Mastruzzo, Jomo Kwame Sundaram, Robert H. Wade, Christopher Cramer and Nidhi Srinivas co-sign the open letter below supporting Francesca Albanese amid US calls to remove her as the UN special rapporteur on PalestineHistory teaches us that economic interests have been key drivers and enablers of colonial enterprises and often of the genocides they perpetrated. The corporate sector has been intrinsic to colonialism since its inception, with corporations historically contributing to the violence against, the exploitation, and ultimately the dispossession, of Indigenous people and lands, a mode of domination known as racial colonial capitalism. Israel’s colonisation of the occupied Palestinian territories is no exception.The recent report by Francesca Albanese, the UN Special Rapporteur on the situation of human rights in the Palestinian territories occupied since 1967, constitutes a major contribution to understanding the political economy of Israel’s Apartheid state, the ethnic cleansing of Palestinians and, now, their genocide. As such, we believe, it must be studied and debated widely and freely.In view of the virulently hostile and indeed intimidating letter from the US government to the UN Secretary General demanding the dismissal of Ms Albanese and the quashing of her excellent report, we felt the need to express our strong support for Ms Albanese and to encourage the UN to dismiss the shrill demands of the US and Israeli governments.Following a well-trodden path of genocide denial and of bullying anyone who challenges the right of the colonial power to dispossess Indigenous peoples, the US and Israeli governments, with most European governments too timid to take a stance, demand that the international community turn a blind eye to the ongoing genocide and, in particular, to the key role that multinational and national corporations are playing in maintaining the Apartheid regime and enabling the subsequent genocide.As economists we feel the duty to highlight three key findings that Ms Albanese’s report unveils with clarity and precision.First, occupation and genocide are highly lucrative for conglomerates. These include not only the usual arms and ‘defence’ big businesses (e.g., Lockheed-Martin, the primary maker of the F35s, ELBIT, Israel’s own arms manufacturer, and Palantir, the software company whose algorithms have most likely been crucial in the selection of ‘targets’ across Gaza) but also household brand names (e.g., Caterpillar, BNP Paribas, Barclays, Allianz, Chevron, BP, Petrobas, A.P. Moller-Maersk A/S). As Israel’s defence budget doubled, with the active support of the US government, it crowded in large ‘investments’ into Israel’s killing machine across this international network of complicit conglomerates in which thousands of Israeli companies are intertwined with US, European, Korean and even a Brazilian mega-corporation. This explains why Israeli equities rose by 161% at a time of falling demand, production and consumer confidence.The second finding in Ms Albanese’s report that deserves extensive study is that the Palestinian territories Israel occupies have functioned as Big Tech’s ideal laboratory and testing ground – a function that the transition from occupation to genocide has only heightened. No country, for instance, has given as much access to a population’s biometric data as Israel has given to IBM. Since 7th October 2023, Microsoft, Amazon, Alphabet and Palantir have been expanding their cloud capital services at a breathtaking pace. Face recognition software, target selection algorithms and automated execution systems are being tested in real time, at will, and with fewer ethical constraints than in the case of experiments on laboratory rats. Big Tech could not be happier!The third key finding is that top US and European universities are financially dependent on remaining wedded to Israel’s Apartheid and permanent occupation/conflict political economy. Many top US and EU institutions will face serious financial difficulties if they were to stop backing Israel’s genocide. Ms Albanese’s report must be commended for drawing this sordid dependency of stellar Western universities and research institutions (including the Technical University of Munich, MIT Labs, the University of Edinburgh among others). The peoples of Europe and America have a right to know that some of their most cherished academic institutions are financially reliant on helping Israel reproduce its political economy of occupation and genocide.In a few years, almost everyone will claim they opposed this genocide. But it is now that people of good conscience need to take a stand. As economists we stand, today, with Francesca Albanese, the UN Special Rapporteur under attack by the US and Israeli governments because her recent report throws indescribably important light on the political economy of Israel’s occupation and genocide.

For the article in Zeteo, click the photo below

 

 

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Hello, I am Yanis Varoufakis with a message from me and DiEM25, today, the 5th of July 2025, exactly 10 years after the Greek people voted overwhelmingly in a referendum to say a big, beautiful NO. A NO to the Big Business and Big Finance who, through their centre right and centre left political representatives, were demanding of the Greek people that they shoulder the costs of the banking crisis which Big Business and Big Finance had caused, with the result that hundreds of millions of people in Europe and America were crushed under mountain ranges of banking losses which governments then turned into public debt, before shifting it to the shoulders of the weakest of citizens through universal austerity – the working classes, the poor, the elderly, the young, the women, people who lacked the power to defend themselves from the powerful plucking the very  moneytree whose existence they denied.Churchill once said of the battle of El Alamein that, before it, the Allies had never won but that, after it, they never lost again. I could say something similar about that splendid and, at once, tragic day, of the Greek NO Referendum ten years ago today – the day when 62% of Greek voters ignored the financial terrorism of the European Central Bank (which had shut down the Greek banks to blackmail voters to accept the terms of surrender they were dictating to the Greek people). That same day when my former comrade, the PM I was serving as finance minister on behalf of the Greeks who were resisting, trashed their verdict and defected to the Big Finance and the Big Business in the name of the left.Before that day, before the magnificent NO Referendum outcome of 5th July 2015, and during the months and years leading to it, we could not imagine losing in the long run our fights against the Big Finance and the Big Business that blew up our social economies in 2008.But after it, since the PM I was serving under overturned our people and betrayed their referendum verdict, we cannot imagine winning ever again, at least not in our lifetimes, against the Big Finance and the Big Business whom the betrayal of the NO Referendum helped recover.It was THAT significant a day. It was THAT significant a defection.Now, I know it is not the done thing to sully the spirit of one’s fellow travellers, one’s comrades, to say things like that – to surrender in public to the admission not only of the size of our defeat but also of the possibility that we may not win again for the foreseeable future. Alas, now is the time for honesty – for without honesty amongst rebels no rebellion worth its salt can be staged.Indulge me friends, fellow travellers, comrades. My point is not to bring you down. My point is to acknowledge where we are not just in Greece, in Germany, in Britain, in Europe but globally. To take stock properly of our situation globally not to mourn nor for some perverted sense of inverted glory, certainly not for gain, but for the simple, stubborn hope of rising again.Somewhere to the North of where I am talking you from, the killing fields of Ukraine are devouring lives with a ruthless, mechanical precision. Where is the Peace Movement to stop this? Nowhere really. Instead Europe is sinking fast into Military Keynesianism, with large majorities in our parliaments voting for unspeakable amounts of new debt to go to weapons of mass destruction we neither need nor can afford – and certainly weapons that people with the slightest of sense left in their hearts and minds should not want.Meanwhile, needless to say, from my southeast, from the scorched land of Palestine, the acrid stench of genocide drifts on the wind. Yes, we have staged magnificent marches on our streets. Yes, our people have marched to Gaza, other comrades risked life and limb to sail to that coastal war crime scene. Yes we have made it possible to speak of the genocide without being treated as buffoons. Yes, we have shifted public opinion. But, nothing is changing on the ground where Palestinian life is eradicated at a steady, at an unbearable rate, or in the corridors of power.Where are the sanctions on Israel? Where is the UN Peacekeeping force that should have been parachuted in to stop the genocide in its tracks? Nowhere. The only people that are hounded are people like the UN’s Special Rapporteur, my friend Francesca Albanese, for daring to report on the political economy of genocide. Why has Brazil, Spain or Ireland, countries whose governments have been supportive of the Palestinians not joined the Hague Group that our Progressive International has brought together to isolate Israel? What are they waiting for?Friends, fellow-travellers, comrades, at the risk of saddening, maybe even angering you, I shall say it again: Since that NO referendum was overturned ten years ago, today, by the left’s own leadership, we are losing at every front.Who is winning? Not the liberal authoritarian establishment – Emmanuel Macron, Keir Starmer, Friedrich Merz. No the pro-genocide radical centre they sensationally unpopular. Even if they are clinging onto power for the time being, they are thoroughly discredited, despised even.No, the winners nest elsewhere in even uglier echelons of the political spectrum. Have you not smelled its smell? Can’t you smell the fascism in the air? Can’t you feel its sour, metallic taste clinging to the back of your throat?What happened to our great hopes? Remember Woman-Life-Freedom? The whispered three-word promise Kurdish heroines carried like a fragile beacon in their hands, a promise that until recently seemed to shimmer just within reach?Well, take a look at the triumphant Donald Trump on the one hand – yes, he is winning on every front – and the pathetic Kamala Harris, or the even more pathetic Hillary Clinton, on the other. Between them, willingly in Trump’s case, they created the manosphere’s unyielding juggernaut, which trampled upon Woman-Life-Freedom, as if these precious little words, had never been spoken at all.Authoritarianism, that most insidious of plagues, has crept into every sinew of life. Along with the smell of pollution in the air, microplastics in our oceans, the insidious power of cloud capital hardwired into our brains, delivering our minds to the whims of our new techlords – this New Global Ecocidal Hyper-Exploitative Ruling Class is entrenching itself as the new order, its cold grip tightening with each passing day.I don’t know about you but, speaking personally, on this, the 10th anniversary of our Great Victory which was turned overnight into the Great Betrayal, it is ever so easy to surrender to the feeling, the sensation, that my political struggles, fuelled by a fierce and unyielding hope, are taking me from one defeat to the next, making me feel like a character in some twisted simulation, doomed to repeat the same futile actions over and over.BUT, I shall not surrender. And nor will you!Acknowledging our defeats, the overwhelming strength of the monsters in power, and the magnitude of the task, needs to be done so that we ground our disobedience, our activism, our sacred campaigns for Humanity and for Nature, on solid ground.So that we learn from the past, from what happened to the brave Greek people 10 years ago to this day, focussing with laser sharp precision not only on the economics and the politics of what needs to be done but, much more so, on the greatest solvent, the ugliest enemy, of solidarity: The tendency of our own side, our own comrades, to be lured by power into defecting to the other side – to the oligarchs who are ever so eager to co-opt us, to co-opt our leading figures especially.So, on behalf of DiEM25, today, the 5th of July 2025, exactly 10 years after the Greek people’s majestic, betrayed, but inspiringly courageous NO – that ethereal revolutionary little word – a word redolent of the only Freedom that matters, the freedom to turn down exploitative, extractive deals. On this day, I bid you farewell.Battle well, and let us all, grounded on facts, work joyously to devise acts that make the fascists, the radical centre, the genocide practitioners and the purveyors of all types of exploitation lose their sleep at night so that the many can dream again.

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Francisco Goya’s etching The Sleep of Reason Produces Monsters was an artist’s stern warning of the hideous forces unleashed in the mind when reason lowers its guard. Today, stablecoins are the gruesome forces being released into the global economy as President Trump’s crypto dreams, unchecked by reason, morphed into the GENIUS Act.Stablecoins are the bastard child of parents seemingly at permanent odds with each other: The libertarian spirit of the crypto community and statist dollar-worshipping. Built on the blockchain technology that was meant to tear asunder the oppressive powers of the financial oligarchy (Wall Street and the Fed), stablecoins are nevertheless fastened to that same oligarchy’s greatest totem: the US dollar. The result is a purportedly apolitical money promising to be joined at the hip with the most politically dominant form of money.What’s a stablecoin?The idea was produce a cryptocurrency devoid of Bitcoin’s hideous volatility while preserving the freedom to transact anonymously and globally – unseen by any government, in a currency beyond the manipulative reach of corrupt politicians, nosy bureaucrats, greedy bankers, the IRS, the CIA etc.Technically, stablecoins comprise a distributed ledger containing information on every transaction (the blockchain) plus a mechanism which holds the exchange rate of each token transacted constant at $1. To render this 1:1 exchange rate credible, issuers of stablecoins like Tether and Circle promise that, for every token they sell, they shall keep in reserve the equivalent of an actual $1. Typically, issuers use the dollars they receive when they sell their tokens to buy US Treasury bills of the same dollar face value. As Treasuries pay interest, unlike cash or stablecoins that do not, issuers profit handsomely.Setting aside their utility for mafia types, who naturally crave any payment means (including $100 and €500 bills) that can lubricate their trade, stablecoins have been a godsent for people in countries, especially in Africa, with fragile monetary systems, hyperinflation, debilitating capital controls etc. Besides providing the unbanked ready access to a proxy for the American dollar, stablecoins offer a means of wiring money abroad that is faster, cheaper, immune to US sanctions and more reliable compared to rickety inter-bank messaging systems (e.g., SWIFT).In short, while stablecoins were ignored by government, they did considerable good and could not do much harm. However, now that the Trump administration is weaponising stablecoins for its own purposes, their potential for serious damage has risen exponentially. The combination of two executive orders President Trump issued (one on 23rd January and another on 6th March 2025) and the GENIUS Act that the Senate has just approved is turning stablecoins into a massive timebomb deep in the foundations of the global economy.How widespread are stablecoins and why are they taking off under Trump?Today, the dollar value of circulating stablecoins is around $250bn. For that sum to be backed with sufficient reserves, it is estimated that, only during 2024, their issuers purchased $40bn of US Treasury bills, making them larger than any foreign buyer of Treasuries during 2024. In the same year, Tether alone reported annual pre-tax profits of $13bn — not bad for an offshore company employing around a hundred people!As for the number of wallets containing stablecoins, last May it jumped, on a year-to year monthly basis, from 27mn to 46mn while transactions in stablecoins climbed 84 per cent, from to $752bn to $409bn. Already, stablecoins account for around 80% of all crypto transactions.Such growth could not but encourage the very financial establishment that crypto was originally meant to disrupt to jump aboard. Behemoths like Visa and Stripe are on the bandwagon, with Big Tech in the process of joining too, seeking revenge for the manner in which Wall Street elbowed it out of payment systems – recall the infanticide of Mark Zuckerberg’s Libra. Even Uber, eager to keep more of the cloud rents currently seeping from its ride-hailing platform to the financiers, is developing a fully-owned cross-border stablecoin.Well before the Trump administration had stepped into the fray to boost them with the GENIUS Act, Standard Chartered was estimating  that stablecoins in circulation would increase eight-fold, topping $2tn by 2028. The question then is why are Donald Trump, JD Vance and their MAGA brethren hellbent to boost stablecoins further?Besides the obvious self-enrichment motive, the more interesting explanation is that stablecoins fit in nicely with the Trump administration’s goal of shrinking global trade imbalances in a manner consistent with their strategy for ‘Making America Great Again’. Nothing motivates these people more than the idea that what is good for their bank account is good for America.Team Trump has made no qualms that it aims to devalue the dollar, with a view to shrink America’s trade deficit, yet preserve its dominance by using the threat of tariffs to force allies to dump dollars but refrain from buying rival fiat currencies. Stablecoins are assigned a key role in this plan.Suppose, for instance, Japan were to be bullied into using a considerable portion of its $1.2 trillion holdings to buy dollar-denominated stablecoins. Trump’s twin aims would be served: First, the dollar’s aggregate supply would rise, devaluing the dollar. Secondly, the stablecoin issuers would use the dollars it receives to buy Treasury bills, thus reducing the US government’s borrowing costs and, in the process, bolster dollar supremacy. In the words of JD Vance, a greater stablecoin uptake will be “a force multiplier of our economic might.”The five supersized systemic risks posed by stablecoins Moral Hazard: Stablecoin issuers stand to profit from issuing more tokens than the dollars they collect or from purchasing relatively illiquid (but higher interest rate yielding) securities. In short, the danger of a stablecoin run (the equivalent of a bank run) is clear and present. When stablecoins were small fry (e.g., when in 2021 New York regulators fined Tether $21mn for undisclosed irregularities regarding its reserves), the threat of dodgy reserves was too small to lose much sleep over. However, as stablecoins exceed the $2tn mark, the risks become systemic, perhaps greater than those posed by subprime mortgages in 2007. Migrating deposits: As dollars migrate from US domestic bank accounts to stablecoins, demand for Treasury bills rises and their yields fall. Banks must raise their interest rates to stem this outflow while Treasury must issue more Treasury bills to satiate the greater demand for them. A wedge suddenly appears between different types of interest rates: Bank and long-term Treasuries’ rates rise while short-term Treasury bill rates fall causing the so-called yield curve to become steeper – a sure sign of financial instability. The Doom Loop between Stablecoins and Banks: In 2023, Circle – the issuer of USDC, the second largest stablecoin – had entrusted $3.3bn of its reserves to the Silicon Valley Bank (SVB). When the latter tanked, a run on USDC began severing its dollar peg. Had the Fed not stepped in to bailout SVB, Circle would be toast. That little incident now seems like a walk in the park given the US Treasury’s prediction that, in the new climate shaped by the Trump administration’s crypto peans, and the GENIUS Act, $6.6tn of US bank deposits are in the process of migrating into stablecoins. The Doom Loop between Stablecoins and Securities: Wall Street is keen to use blockchain-based technologies for speeding up, securing and reducing the cost of trading securities – to disrupt the traditional rickety system of trading securities in the same way that stablecoins are disrupting SWIFT. But, to shift the trading of shares, bonds, derivatives and assorted exotic financial contracts onto a blockchain, the contracts and the tokens used to buy or sell them must be inserted into the same blockchain – exactly as most trading in NFTs is done on the Ethereum platform using its own cryptocurrency. This means that an arms race is now on to determine which dollar-backed stablecoin dominates the securities’ trades. Once the answer is in, its usage is bound to go through the roof. But the moment the private company that issues this stablecoin gets into hot waters, the entire stock market along with the $29tn Treasuries market is in peril. Global fragility: What happens if a stablecoin issued outside the United States crashes? Non-US institutions, including European ones, lack access to Fed rescue mechanisms. Will the Trump administration offer them the Fed swap lines that kept European banks alive in 2008? It is doubtful. Thus, dollar-backed stablecoins issued in Europe, Asia, Africa or Latin America risk exporting financial fragility globally. Even the European Central Bank is panicking at the prospect of having to find dollars to bailout European holders of dollar-denominated stablecoins.In the meantime, developing countries face a trilemma: ban stablecoins (forfeiting its substantial benefits), create sovereign alternatives, or accepting deeper dollarisation. China, armed with its digital yuan, sensibly opted to ban stablecoins outright, shielding its financial system. Yet its $4.5 trillion in dollar reserves poses a dilemma—dumping them aids Trump’s dollar devaluation, while holding them risks exposure to US-driven volatility. The BRICS’ preparedness, nevertheless, contrasts with most economies, trapped between dollar dependence and destabilising crypto experiments.The spectacular inadequacy of the Genius ActThe GENIUS Act, which last Tuesday was approved by the US Senate with a 68-30 majority, is hard to fault if the intention was to maximise the threat of a financial meltdown. Essentially, it weaponises stablecoins as a means of privatising money and effectively outsourcing dollar dominance to Trump-friendly techlords.Proving their endless inanity, lured by two promises, many Democrats supported this legislation. The first promise was that the Act will protect their chums in Wall Street with a preposterous ban on stablecoins that pay interest. The second promise was that the Act will regulate Trump’s new digital Wild West. How? Issuers of stablecoins worth less than $50bn are to be regulated by the… states, allowing for a thousand lesser stablecoins to bloom across America. As for the systemically significant ones, including issuers domiciled outside the United States (like El Salvador-based Tether), they will be required to submit to an ‘independent’ audit of the quality of their dollar reserve assets.Two are the ways in which the GENIUS Act paves the ground to a massive crash. One is the ill-defined regulation of their reserves, combined with the inexcusable neglect of the abovementioned doom loops that stablecoin growth is occasioning. But there is a much, much worse aspect of the Act: It emasculates the Federal Reserve. It does this in two distinct ways: First, by banning it from issuing its own stablecoin, a digital dollar by which to counter the up-and-running digital yuan of the People’s Bank of China. Secondly, by implicitly burdening the Fed, without giving it the necessary tools (e.g. the equivalent for stablecoins of the Federal Deposit Insurance Corporation), with the enormous task of cleaning up the mess private stablecoin issuers are bound to create.ConclusionTo err in the world of financial innovation is human. But to cock things up big time all you need is the US government to promote private stablecoins, to cloak them in the legitimacy that a little regulation-lite can provide, to ban the Fed from deploying the same technology, and to deprive it of the means to clean up the inevitable mess.So, yes, be afraid. Be very afraid.

For the UNHERD site, where this article was first published, click here.

The post The stablecoin time bomb hidden in Trump’s GENIUS act: Prepare for the next financial meltdown – UNHERD, 19 JUNE 2025 appeared first on Yanis Varoufakis.