Vouchsafing Varoufakis: A Review of ‘Adults in the Room’

A little over two years ago as the Greeks prepared to vote in a referendum on whether or not to accept another European Union (EU) bailout, I recall wondering whether or not to follow other leftists on social media in supporting the call for #OXI (the Latinised version of Greek for NO). Opposed as I am to the EU and with an eye to the promised British referendum on membership of the EU which was still in the future at that point (and in which I already knew that I was going to vote leave), I was drawn to the OXI camp. Initially I thought that OXI could prefigure a British ‘No’ vote in our own referendum on EU membership.

After a little further reflection however I held back. I held back not only because of my unease over the general worthlessness of such clicktivist virtue-signalling by people who weren’t entitled to cast a vote, but also because I realised that the campaign for OXI by the Syriza government of Greece was fundamentally unserious. Much as I wished to see yet another democratic blow inflicted on the EU as well as a popular rejection of EU-imposed austerity, the polls at the time all showed that the majority of Greeks both opposed the economic punishment inflicted by the EU, and a majority still wished to remain members of the euro-zone (EZ). It was the responsibility of Greece’s political leaders to resolve this contradiction by forcing the voters to accept the fundamental incompatibility of these two positions. Needless to say, no such leadership was forthcoming from Syriza. To my mind, given the failure of its negotiating strategy, the government of Prime Minister Alex Tsipras should already have been offering the Greeks a referendum on membership of the EZ. At the very least, they should have made clear to the voters that the implication of OXI should be withdrawal from the EZ and by extension the EU, too. By not doing so Syriza ensured that all the popular energy and democratic power mobilised behind OXI and their own earlier general election victory would be nothing but a gesture — to paraphrase Bayard Rustin, ‘a cry of protest before accommodation’.

Sure enough, a year after the resounding OXI vote and Tsipras’ subsequent abject surrender to an even more severe EU bail-out, I saw those same pro-OXI voters bitterly denouncing Brexit — a referendum whose terms were clear, whose implications were unmistakable, whose results were a democratic triumph— all quite unlike Syriza’s catastrophic and disingenuous campaign for OXI back in 2015. Even back in 2015 it had quickly become clear that Syriza was looking to lose, secretly hoping for a ‘NAI’ (Yes) vote that would enable it to abdicate the burdens of political leadership, never having expected to actually win. Thus it is even more dismaying to read just how perfidious Syriza’s surrender was with the backstage insights provided in Yanis Varoufakis’ account of his his time in government as Syriza’s finance minister: Adults in the Room: My Battle with Europe’s Deep Establishment (2017).

Ever since their entry into European politics with their electoral breakthrough of 2012, I had been suspicious of, even hostile to Syriza over their apparent determination to remain in the EZ despite the disastrous consequences of this policy for Greece. Nonetheless, I could not help but grudgingly admire Varoufakis for his open breach with the sinister habits of covert Euro-diplomacy and his willingness publicly to wield his democratic mandate against the transnational bureaucracy of Brussels. His clinging to Syriza and the EU throughout the disastrous year that followed affirmed me in my fundamental scepticism towards him and his politics—scepticism which I now find myself having to qualify after reading this brilliant account of his time in government, as well as his uncompromising advice to British leaders on how to pursue Brexit negotiations, published in the Evening Standard earlier this year. Varoufakis recounts how he was the only member of the government celebrating when the results of the 2015 referendum came in: ‘ … it felt like being in one of those sci-fi movies in which body-snatching aliens have quietly taken over.’ (p.467)

Adults in the Room should be a set text on every student’s reading list about the EU and global finance, and should be read by everyone with an interest in the momentous events in Europe. In particular, it should be read by British Remainers and EUrophiles everywhere — at least if they have any desire to hold their belief in the EU against the wretched reality portrayed by Varoufakis — a portrayal that is all the more convincing given the fact that Varoufakis remains a dedicated supporter of the EU (on which more below).

Given that the book is about transnational, bureaucratic institutions that often seem as if they were intentionally designed to bore and mystify people into submission, it is a remarkable achievement that a former politician (and moreover an academic economist by training) has been able to write a non-fiction book about contemporary European politics that is as gripping as a thriller. Varoufakis recounts late night phone calls even before he was in office threatening the life of his step-son (threats Varoufakis assumed emanated from Greek oligarchs). Later, when in government, he recounts how US intelligence was so casual about tapping his personal phone that they didn’t even bother with the pretense of concealment, subsequently phoning him up to ask for clarification in order to brief Obama’s National Security Council about the internal decision-making of the Greek government. Notwithstanding some pretentious and grandiose literary pomposity, Varoufakis also has a remarkable ability to give thumb-nail sketches of the power-brokers and politicians he deals with and to contextualise them in the settings of their institutions, parties and home countries’ politics.

Tsipras under Merkel’s spell (chapter 12)

For all their lack of vision, German Chancellor Angela Merkel and even the lizardly Tsipras come across as astute and highly skilled politicians if not effective political leaders — skilled that is, at knowing how to manage their own parties, how to rally individuals at the appropriate moment, how to manage and sequence meetings and create informal institutions and committee structures to ensure outcomes on their own terms. It is only German finance minister Wolfgang Schauble — ironically Varoufakis’ most implacable foe in negotiations — who comes across as anything like a statesman, even to the extent of reaching towards tragedy despite (or perhaps because?) of his weak grasp of economics. Of all of Varoufakis’ interlocutors, it is only Schauble who understands the contradictions on which the euro-zone is built and has the political will and vision (although not the power) to forcefully resolve the contradictions of a continental-sized polity built around a monetary union without a sovereign demos and fiscal union.

Wolfgang Schauble: the only adult in the room

Indeed, it is Varoufakis’ portrayal of individuals that helps render his account of events in which he was so closely involved so convincing, as he shows divisions and power struggles on all sides, in which strange alliances are struck. Despite his openly far-left politics, Varoufakis strikes up unlikely alliances with Britain’s then-chancellor George Osbourne and Thatcherite former chancellor George Lawson as well as libertarian hedge fund managers who appreciate the insanity of EU policy in Greece. Varoufakis is also astute enough to realise that underneath these divisions between people and across institutions, individuals themselves were internally conflicted over the momentous decisions they were making. Varoufakis describes Schauble’s personal moment of collapse at realising that he had been out-maneuvered by Merkel, and Tsipras’ tortured decision to surrender. Varoufakis is also self-critical, very precisely identifying the moments at which he felt he made critical missteps.

For all these clear insights however, Varoufakis remains ineluctably wrapped up in the grandest of grand delusions, the idea that the EU can be democratically reformed, a vision that he can only justify with the same politics of fear with which the Eurocrats use to justify the pulverising of Greece’s economy: fear of fascism. Without the EU, so the story goes, Europe will collapse back into xenophobic nationalism and murderous inter-state conflict. So the EZ must be preserved, and the union bound together ever more tightly, minus the mass democratic legitimacy and popular input that is seen to be the source of all Europe’s political ills of the past. On this at least, Varoufakis and the ‘deep establishment’ are in agreement: Varoufakis’ deepest fear is of what he calls a ‘postmodern 1930s’ if Europe fails to fall in line behind Brussels.

Thus throughout the book, Varoufakis finds himself trapped: on the one hand he wants to restore Greek democracy and autonomy by helping Greece escape the grip of the troika — the European Commission, the IMF and European Central Bank. On the other hand, he wants to abolish Greek sovereignty, by dissolving it away into a unified Europe with fiscal centralisation— something to which the Eurocrats are opposed, as they have no plan, vision or intention of establishing a super-demos, which would only recreate the problems of democratic accountability which the EU was precisely designed to evade.

Varoufakis’ insights into the functioning of the EU — in which he describes political decisions of continental scope being made in informal committees that do not even keep minutes, or how Berlin sabotaged his attempt to secure FDI from China, and how Brussels colonised the Greek state with its own bureaucrats to outflank the decisions of elected politicians — prompted some thoughts about my own academic discipline of IR. Specifically, Varoufakis’ book made me think about the intellectual complacency wrought by theories of constructivism. For many years, the study of the EU in the academy has been dominated by a gospel — literally a ‘good news’ story — of the EU as a benevolent institution gently growing outwards (‘norm diffusion’ in the jargon of the discipline), its bureaucratic disfiguration and institutional dispersal prompting endearment as much as regret, its lack of ‘hard power’ as much a point of grudging pride as source of frustration. Varoufakis’ portrayal rips this rose-tinted vision to shreds: whatever hard power the EU may lack in competing militarily with the US, China or Russia, he shows that it has more than enough hard power and ruthlessness where it ultimately counts for its member-states — not nuclear missiles or tanks, but in the steel-hard cage the EU has built to contain its own citizens.