Yanis Varoufakis in Barcelona Full Coverage

Ex Greek finance minister Yanis Varoufakis is speaking in Barcelona about democracy in Europe following the events that rocked his country and the euro-zone.

He is talking in the Centre Cultural El Born in the old part of the Catalan capital. Here are highlights of his talk:

Update: Live blog of his appearance in Barcelona on June 1 2016

Thousands of people were  waiting in line outside the conference center.

• The common currency was constructed like the gold standard
• The  Europeans are sighting with each other.
• In the US, each crisis brought the Americans closer together and in the euro-zone the opposite is happening.
• The euro-zone was wrongly constructed.
• The state’s role was to keep the different classes in equilibrium/
• The EU has its roots in a cartel of coal and steel, and later came other cartels.
• The Eurogroup is a democracy free zone.
• The European  Parliament is a very interesting building but not a real parliament.
• In Greece, we suffered the greatest depression since the 1930s.
• Only 9% of the unemployed get  unemployment benefits.
• The Eurogroup told me that nay program is  a good program as long as it is this specific program they originally designed.
• In the 60s they used tanks, now the banks.
• We were threatened with the closure of the banks and people still voted NO.
• Tragically, our government  decided to surrender.
• We did a lot of damage to other left wing European parties.
• In Brussels, the truth comes out when microphones are closed.
• In Spain, you rescued the banks and paid with austerity.
• When you have different economies and put them together, you have a tsunami of money from surplus countries like the northern ones to the southern countries.
• This  flow of money comes in the form of loans.
• In Spain, it came through developers building houses and people felt rich.
• In Greece, the money went into the state sector. The government built high highways, Olympic stadiums and corruption.
• Everything came from borrowed money from Germany.
• It had to be borrowed because that’s how it works.
• When the music stopped, Spanish developers went bankrupt, then the banks and then the state.
• In Greece, the state suffered but the result was the same:  austerity.
• In the US, the Federal Government stood behind failing banks in states.
• Break down the unholy alliance with external bankers.
• A banker must know that if the bank goes bankrupt, the banker goes home.
• Public debt crisis: In Spain, there is a state crisis because of the banks.
• In the US, the Federal Government takes over. In the euro-zone we need proposals that are relevant
• We split the state debt like this: 60% of  national debt, blue / good debt. The rest is red / bad debt.
• Each country stay with the red debt but Europeanize the blue debt.
• From now on, the ECB services the good debt on behalf of the national state.
• So, the ECB operates as a go between the state and the money markets.
• We benefit because the ECB has a good name and it can borrow at near 0% interest rate.
• So, 40% of total euro-zone debt just goes away without anybody losing money – the interest rate becomes zero.
• There is a constant conflict between the ECB and the Bundesbank.
• The Bundesbank took the ECB to court.
• The mere announcement of this scheme could make the debt crisis would go away.
• On Investment: the lack of investment shows us that there is a big problem in Europe.
• A lot of debt means a lot of accumulated money. Too much money.
• The rich people in Europe have more money than ever.
• The money is stuck.
• Interest rates are below zero. In bonds and shares there’s risk and the  mattress is not large enough.
• German pension funds don’t have where to invest the money because of negative yields.
• The solution would be to invest in productive things, including green causes.
• The problem is that if money is invested, nobody will be able to buy the goods – a vicious cycle.
• To break and kickstart, you need to guarantee this with the state. The southern states are bankrupt.
• France is bankrupt.
• France is required not to overspend from Germany.
• The European Investment Bank could ignite investment in green energy.
• There is no political will behind the EIB which belongs to all of us.
• If the ECB would have bought investment bonds and not state bonds and they have the right to do that according to the charter.
• The ECB could buy EIB bonds.
• When rich people will see this investment, other investors will jump in and that will kickstart the whole economy.
• The model is the US in the 30s.
• China saved Europe in 2008. The  Chinese government cranked up the machine in 2008.  China’s investment ratio has been 50% – unprecedented.
• Germany managed to survive thanks to China.
• The  Chinese knew that they were buying time – 5 years to create demand.
• But we haven’t done anything.
• Now China is deflating while Europe is nowhere near recovering.
• The current situation is a gross failure of the euro-zone.
• The Eurogroup is not distinguished by intellect. They just repeat the rules and don’t accept changing the rules.
• Luis de Guindos is a very clever man.
• In the Eurogroup de Guindos had only the mantra.
• Schäuble is a very enlightened man but also repeating the rules mantra without challenging the rules.
• Eurogroup: The whole is far less than the sum of the parts.
• We should be ashamed of the level of poverty and also on treating refugees.
• Poverty is  a political issue, and aids the rise of the extreme right.
• If Draghi were to write a check to every  poor family, it would be great, but the ECB is forbidden to do that.
• When a Spaniard buys a Volkswagen, the money goes from the buyer to the central bank in Madrid and this says in turn to the Bundesbank: send money to VW.
• So, what  actually happens is that the Spanish central bank owes money to the German central bank via the Target2 system.
• In  practice, Spain owes money to Germany, and  interest is paid – tax from Spain to Germany.
• The Bundesbank passes these profits to the German treasury.
• Why should this money go to the surplus country? The bigger the  surplus  goes to the surplus countries.
• Idea: the money goes to fight poverty and does not require a treaty change.
• The very announcement will make Europeans feel that they are part of Europe.

To solve it:

• The old system to create a  national party and act is finished. It  doesn’t work.
• Idea: create a pan-European level and then go to the local elections.
• There should be a program of what we want to do and that should be inclusive.
• We want to democratize  Brussels.
• The idea of one person one vote is radical.
• The commission  and the Eurogroup should be accountable to the parliament.
• At the current stage of degeneration, these ideas are radical.
• There are 4 time frames but we don’t need a top down party.
• I am going all around Europe to spread the word.
• Greece is important to me, but everything that happened to Greece can happen everywhere.
• People came to talk to us not because of pure solidarity but because of fear that it will happen to them.
• The party  mentality is no longer useful to make a change.
• The movement should aim to be a European network open to  members from different parties.
• Even the conservatives are not happy with  themselves.

Immediate term:

• Full transparency
• Publication of meeting minutes
• TTIP should become transparent

Short term:

• Implementing the four policies that do not require  treaty changes

Medium term:

• Creating an assembly outside Brussels where elected officials can debate

Long term:

• A new constitutions.

If we agree and we shape and it reflects public opinion across Europe, this will be spontaneous across parties across Europe.

• Q: How can you mobilize people
• A: What happens in Catalonia was what happened in Greece – feeling alone. We are missing feeling together. Your  struggle for the Catalan identity is similar to Greece’s right not to be crushed and workers without rights in Germany.
• Q:  How do you encounter the media?
• A: We need to get together. The nation state was invented in the 19th  century. We Europeans have a lot in common. If we make this movement, the European identity will  rise.
• The euro zone will break down without democracy, just like the gold standard in the 30s.
• Q: Are you frustrated?
• A: The Eurogroup is a very unpleasant place. It was 18 against one. The problem was at home, when we began surrendering. The back stabbing and the tendency to give up is what is unbearable. I believe that I did the right thing. In a sense, this is a very long war for democracy. And that was just a skirmish. Europe is more civilized than in the past.

Added 19/10:

In our latest podcast we analyze Varoufakis’ 4 problems and 4 solutions, and more

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