Video: Yanis Varoufakis – The Origins of the European & Global Economic Crisis

Munich, Germany (PT) – This week Zain Raza, the EIC of AcTVism Munich sat down with the former Greek Finance Minister Yanis Varoufakis to discuss the differences between American and European capitalism, the real implications of the “greek crisis” and the effects on individual states of global capital.

Varoufakis spent a good portion of the interview establishing the history of how global capital – primarily US capital – evolved from the post war Marshall Plan era to the “second phase” of post-war economics. It’s explained in the interview how that after the reconstruction of Europe; when the European and Asian economies had rebounded from devastation became markets for American speculation and manipulation.

In the view of Varoufakis; Europe became the primary region for the US to “recycle it’s surplus” putting Europe on the line for speculation and profit extraction and the repercussions that come with this kind of control exerted by world capital.

Varoufakis resigned from his position as Finance Minister after Greece was forced to accept austerity terms that were democratically rejected by the Greek population. Like many others Varoufakis was concerned with the cuts and controls that were going to be placed upon Greece by groups of global bankers. Similar to a situation such as Flint, Michigan and their emergency managers in the US; for Greece to accept austerity meant submission to outside forces (in this case banks and the EU) who would override the will of the Greek citizens.

Above all Varoufakis wanted to make clear that the crisis in Greece is not resolved and is not just a “Greek” crisis. He pointed to the other nations still suffering from austerity but also referenced the nations who aren’t – such as Germany and France – to show that all the countries of the EU have concerning indicators of problems. Citing the Germany’s negative interest rates or France’s unsustainable debt it is obvious why Varoufakis is concerned that the financial crisis is not “over” in Europe despite what we’re lead to believe.

Varoufakis was critical of the EU’s policies of forcing states in debt to borrow from foreign financial markets which only compounds the problems of nations’ that don’t have wealth or economies to rely on to stop the bleeding. Whether you agree with the system in the United States or not; Varoufakis did give credit the the safety net here as it concerns with bailing out the banks. Although as Americans we may not see the bank bailouts as a positive; Varoufakis thinks a bailout by the federal government was better than forcing banks or states to take predatory loans from international banks and governments.

“If the state of Nevada had to borrow internationally in order to bail-out the banks and pay for the employment benefits of the construction workers like the Irish did, then the state of Nevada and the banks of Nevada and the economy of Nevada would have gone down the drain and then there would be domino-effect throughout the United States.”

 

Varoufakis; near the end of the interview lays out this argument with the comparison of two states in different unions; Ireland in the EU and Nevada in the US. In order to explain the damage done by World Bank, IMF and EU policy. Although both groups of states responded in a less than ideal way it’s clear Varoufakis feels the US handled their problems better and Europe still has a host of issues they can’t ignore forever.