FAZ: Varoufakis calls on Merkel to make choice and break ‘vicious cycle’

Greek Finance Minister Yanis Varoufakis appealed to German Chancellor Angela Merkel in an article published in Franktfurter Allgemeine, entitled “The Choice is Hers”.

“In early 2010 I disenchanted several members of the Greek government with whome I had previously enjoyed cordial relations. The reason was that I opposed their determination to seek a large loan from the German taxpayers,” he writes, adding that while there is nothing wrong with borrowing it is “unacceptable” to seek loans to cover up insolvency. “New debt is fine even for the insolvent, but only after reforms are enacted and the existing debt is restructured.”

“In 2010 Greece owed not one euro to German taxpayers! We should have kept it that way. Irresponsible Greek borrowers and irresponsible German lenders should have taken the hit. Not the poorer Greek and the unsuspecting German taxpayers that had never been part of that racket. Instead, our governments, in the name of European… ‘solidarity’ enabled the transfer of private losses from the books of private banks onto the shoulders of Greek and German taxpayers,” he writes. “Naturally, these loans, the largest in history, were conditional on fiscal adjustment. Under the troika’s watchful eye, the state’s structural deficit turned into a surplus by a whopping 20% of national income, wages contracted by 37%, pensions by up to 48%, state employment by 30%, consumer spending by 33%, even te current account deficit fell by 16%.”

He states how these figures further skyrocketed when the Radical Left Coalition (SYRIZA) took charge. ” In my first visit as finance minister to Berlin, I remember encountering a German official on my way to meet Dr Schäuble. He half-jokingly, asked me: “When am I getting my money back?” I was tempted to remind him that five years of terrible policies had crushed the incomes from which ‘his’ money could be readily repaid. Or that 90% of the loans to the Greek state went to the banks, much of it to German ones. Only I bit my tongue. After all, in 2010 I had opposed the bailouts because of the conviction that they would poison relations between our peoples. Adding to the cycle of mutual retributions would not help the cause of lessening the discord,” he writes, adding that the day he was appointed Finance Minister he pledged not to indulge his “predecessors’ penchant for accepting non-viable loans from European taxpayers as a short-term ‘remedy’ of our problems.” He points to official Europe pushing for such an agreement. “This is 2010 all over again!” he writes while pointing that he is being asked “to take the money, extend the crisis into the future, and pretend that it was being… solved. No thanks!”

Instead, he wants to break the vicious cycle. On Monday, he says that Merkel will face a stark choice: “Enter into an honorable agreement with a government that opposed the ‘bailouts’ and which seeks a negotiated solution that ends the Greek crisis once and for all. Or to heed the sirens from within the Federal Government encouraging her to jettison the only Greek government that is principled and which can carry the Greek people along the path of genuine reform.”
The choice is hers!