University of Essex Yanis Varoufakis
University of Essex Yanis Varoufakis
PROFILE OF Yanis Varoufakis
Yanis Varoufakis (Greek: Ιωάννης “Γιάνης” Βαρουφάκης Ioannis “Gianis” Varoufakis, pronounced [ˈʝanis varuˈfacis]; born 24 March 1961) is a Greek economist, academic and politician, who served as the Greek Minister of Finance from January to July 2015, when he resigned. Varoufakis was also a Syriza member of the Hellenic Parliament (MP) for Athens B from January to September 2015.
Born in Athens in 1961, Varoufakis attended Moraitis School before moving to the United Kingdom, where he studied mathematics at the University of Essex, got a postgraduate degree in mathematical statistics at University of Birmingham, and a PhD in economics back at Essex. Whilst at university, he was a supporter of various political causes. Following university, he began a career in academic economics, teaching at the universities of Essex, East Anglia, and Cambridge between 1982 and 1988. Following Margaret Thatcher’s third election victory in 1987, Varoufakis left the UK and moved to Australia, where he taught at the University of Sydney until 2000. He returned to Greece that year to teach at the University of Athens, where he led a doctoral program and was promoted to full professor in 2005. Following this, Varoufakis had periods of advising George Papandreou and working as the economist-in-residence for Valve Corporation before moving to the United States to teach at the University of Texas at Austin. Varoufakis has published a number of texts on economics and game theory, such as The Global Minotaur.
In January 2015, Varoufakis was appointed as the Minister of Finance, and led negotiation with Greece’s creditors during the Greek government-debt crisis. However, he failed to reach an agreement with creditors, leading to the 2015 Greek bailout referendum. The day following the referendum, on 6 July 2015, Varoufakis resigned as Minister of Finance and was replaced by Euclid Tsakalotos. On 24 August, Varoufakis voted against the third bailout package, and in the ensuing September snap election, did not stand for re-election. Varoufakis has since appeared in numerous debates, lectures, and interviews. In February 2016, he launched the Democracy in Europe Movement 2025 (DiEM25), and subsequently backed a Remain vote in the UK’s European Union membership referendum 2016.
Early life and education
Varoufakis was born in Palaio Faliro, Athens, on 24 March 1961, to George and Eleni Varoufakis.
Varoufakis’s father, George Varoufakis, emigrated from Cairo to Greece in the 1940s, arriving in the midst of the Greek Civil War. One day, he was “roughed up” by the police and asked to sign a denunciation of communism. In response, he said: “Look I am not a Buddhist, but I would never sign a denunciation of Buddhism”. He therefore ended up spending several years imprisoned on the island of Makronisos, which was used for the political re-education of people who fought on the communist side in the war. After being released in 1950, he completed his university studies and found employment as the personal assistant to the owner of Halyvourgiki, Greece’s biggest steel producer. He is now, at the age of 90, Chairman of Halyvourgiki’s Board of Directors.
Varoufakis’s mother, also a student at the University of Athens School of Chemistry at the time she met George, abandoned her conservative background after meeting her husband who was, at the time, allied to United Democratic Left (EDA). In the mid 1970s Eleni Varoufaki became an activist for the Women’s Union of Greece, which promoted gender equality and had been set up by members of PASOK. By the early 1980s, the couple had converged politically to the same political centre-left ground and engaged with the socialist PASOK. Eleni was elected Deputy Mayor of Palaio Faliro a few years before she died in 2008.
Varoufakis was six years old when the military coup d’état of April 1967 took place. Varoufakis later said that the military junta showed him a “sense of what it means to be both unfree and, at once, convinced [me] that the possibilities for progress and improvement are endless”. The junta collapsed when Varoufakis was in junior high school. Attending the private Moraitis School, Varoufakis decided early to spell his first name with one ‘n’, rather than the standard two, for “aesthetic” reasons. When his teacher gave him a low mark for that, he became angry and has continued spelling his first name with one ‘n’ ever since.
Varoufakis finished his secondary education around 1976, when his parents deemed it too dangerous for him to continue his education in Greece. Therefore, he moved to the United Kingdom in 1978 where he joined the University of Essex. His “initial urge was to study physics” but he decided that “the lingua franca of political discourse was economics”. He therefore enrolled in the economics course at Essex, but it has also been suggested that he decided to enroll in economics after meeting Andreas Papandreou. After only a few weeks of lectures, Varoufakis switched his degree to mathematics.Whilst at the University of Essex he joined a variety of political organisations including ComSoc (the University Communist Society) and the Troops Out Movement, which campaigned for a British withdrawal from Northern Ireland. He also became involved with the African National Congress, Palestine Liberation Organization, and other organisations such as those in solidarity with Chile. Varoufakis was also elected as secretary of the Black Students Alliance, a choice that caused some controversy (given that he is not black) to which he responded by telling them, according to his PhD supervisor Monojit Chatterjee, “that black was a political term and, as a Greek, on the grounds of ethnicity he had as much reason to be there as anyone else.” Varoufakis also took part in student debates, where one of his rivals was John Bercow, who later became the Speaker of the House of Commons.
He moved to the University of Birmingham in October 1981, obtaining a MSc in mathematical statistics in October 1982. He completed his PhD in economics back at the University of Essex, where his PhD supervisor was Monojit Chatterjee. He completed his PhD in 1987.
Between 1982 and 1988, Varoufakis taught economics and econometrics at the University of Essex and the University of East Anglia. After Margaret Thatcher’s third election victory in 1987, he decided to leave. He did not wish to return to Greece for fear of conscription, and so accepted an offer to lecture at the University of Sydney, where he remained until 2000. From 1989 to 2000, he taught as senior lecturer in economics at the Department of Economics of the University of Sydney, with short stints at the University of Glasgow and the Université catholique de Louvain. Varoufakis, during his time in Sydney, had his own slot on a local television show where he was critical of John Howard’s conservative government, and he also acquired Australian citizenship.
In 2000, a combination of “nostalgia and abhorrence of the conservative turn of the land Down Under”, led Varoufakis to return to Greece where he was unanimously elected an associate professor of economic theory at the University of Athens. In 2002, Varoufakis established The University of Athens Doctoral Program in Economics (UADPhilEcon), which he directed until 2008. In 2005 he was promoted to full professor of economic theory.
From January 2004 to December 2006, Varoufakis served as economic advisor to George Papandreou, of whose government he was to become an ardent critic a few years later.
Beginning in March 2012, Varoufakis became Economist-in-Residence at Valve Corporation. He researched the virtual economy on the Steam digital delivery platform, specifically looking at exchange rates and trade deficits. In June 2012, he began a blog about his research at Valve. In February 2013 his function at Valve was to work on a game for predicting trends in gaming. From January 2013 he taught at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin as a visiting professor. In November 2013, he was appointed guest professor at Stockholm University, Department of Computer and Systems Sciences, to work within game and decision theory at the eGovLab.In 2013, he was appointed the Athens desk editor of the online magazine WDW Review, in which he contributed until January 2015. On 22 January 2015, the International University College of Turin awarded to Varoufakis a Honorary Professorship in Comparative Law Economics and Finance for his extraordinary theoretical contribution to the understanding of the global economic crisis.
Varoufakis was elected to the Greek parliament, gathering the largest number of votes (more than 142 thousand) of any Greek MP, representing Syriza,and took office in the new government of Alexis Tsipras two days later, on 27 January 2015. He was appointed Finance Minister by Tsipras shortly after the election victory. The party promised to renegotiate Greece’s debt and significantly curtail the austerity measures which had led to the longest recession in post-war global history.
The new government had to negotiate an extension on its loan agreement, which was expiring on 28 February 2015. Had it expired without renewal, the European Central Bank would have pulled its liquidity provisions from Greece’s commercial banks, ensuring that they closed their doors to the public. Varoufakis led this negotiation at the Eurogroup and with the International Monetary Fund. On 20 February, at the Eurogroup, an agreement to extend the Greek loan “facility” for four months, until 30 June 2015, was struck and Varoufakis hailed it as crucial – because it represented a fresh start by specifying that the terms of the loan would be renegotiated and the conditionalities would be re-drawn on the basis of a new list of reforms to be provided by the Greek government. That list was submitted by Varoufakis on 23 February and was approved by the Eurogroup of 24 February. On those grounds, Varoufakis signed the official document by which the loan agreement’s expiry date was to be extended from 28 February to 30 June 2015 – a four-month period during which a new agreement was to be negotiated.
Varoufakis’ view on Greece’s public debt, and the crisis which began in 2010 as a result of the Greek governments’ inability to service it, had been the same since 2010: the Greek state has become insolvent in early 2010 and the bailouts that followed were attempts to “extend and pretend” – to take on the largest loan in history (in order to keep making repayments on older loans) on condition of austerity measures that would shrink the incomes from which the old, un-serviceable loans, and the new bailout debts would have to be repaid. In that sense, Varoufakis argued, taking on the “bailout” loans in 2010 and 2012, before restructuring the debt properly and putting in place a proper developmental program (including reforming the oligarchy, creating a development bank and dealing with the banks’ non-performing loans) would lead to deeper bankruptcy, a great depression and a harder default in the future. His explanation of why the troika of Greece’s lenders (the IMF, the ECB and the European Commission) insisted on these bailout loans was that they represented a transfer of losses from the private banks to Greece’s and Europe’s taxpayers. In his view, the 20 February 2015 Eurogroup agreement, that he negotiated, “was an excellent opportunity to move forward.”
However, the troika of lenders were not happy to let the new Greek government change the previous conditionalities, nor to agree to a debt restructuring. Varoufakis claims that, soon after the extension was granted at the end of February, the troika reneged on its alleged promise to consider a new fiscal and reform program for Greece, demanding of the Greek government that it implements the old one (which the Syriza government was elected to re-write). In March 2015, the Wall Street Journal pointed to several tensions between Greece and the other Eurozone countries, saying that some countries feel they have taken the “tough medicine” and the €195 billion owed is not insignificant. Further, they stated other governments have philosophical differences with Varoufakis and his Anglosphere and Keynesian leanings. Peter Ludlow said Varoufakis and his colleagues “turned instinctively… to the U.K. and the U.S. even before they called on the European Left.”
In a discussion with Nobel laureate Joseph Stiglitz on invitation of U.S. economic think tank Institute for New Economic Thinking, Varoufakis stated on 9 April 2015 that “the Greek state does not have the capacity to develop public assets.” Therefore, he announced that his government was “restarting the privatization process.” However, unlike the former governments they would insist on establishing public–private partnerships with the state retaining a minority stake to generate state revenues. They would also require a minimum investment on behalf of the bidder, and “decent working conditions” for the workers. Varoufakis also said that although the government needed to avoid a primary budget deficit, the bailout program’s target of a surplus of 4.5 percent of GDP was outlandish and should be reduced to no more than 1.5%.
After many weeks of negotiations during which the Greek government, often against Varoufakis’ advice, made many concessions to the troika of Greece’s lenders, no agreement was in sight. One reason was that the members of the troika did not have a unified position. For example, the IMF insisted that the Greek government’s demand for a public debt restructure should be granted, while powerful finance ministers in the Eurogroup (Germany’s, for instance) refused this. Another alleged reason was that, with elections approaching in Spain, Ireland and Portugal, various politicians within the EU did not want to see Greece’s radical new government emerge as successful.
On 25 June 2015, Varoufakis was presented with an ultimatum in the Eurogroup. It comprised a fiscal proposal, a reform agenda and a funding formula that Varoufakis, his government and, indeed, several other ministers of finance sitting in the Eurogroup, considered to be non-viable. The next day, the Greek Prime Minister, Alexis Tsipras, called for a referendum on the Eurogroup’s proposal on 5 July.
On 5 July 2015, the bailout referendum took place. Varoufakis had campaigned vigorously in favour of the ‘No’ vote, against the united support for the ‘Yes’ of Greece’s media. To make his position clear, he declared on television that he would resign as Finance Minister if Greeks voted ‘Yes’. The outcome of the vote was a resounding 61.5% vote in favour of ‘No’. Varoufakis went on television, soon after the result was announced, and declared that the government was determined to honour this new mandate for a different agreement with its creditors. However, a few hours later, late into the night, Varoufakis resigned. In his resignation statement the following morning he counterfactually claimed that “other European participants” had expressed a wish for his absence. Later he explained that he decided to resign during a meeting with the Prime Minister, on the night of the referendum, during which he discovered that the Prime Minister, instead of being energised by the “No” vote, declared to Varoufakis his decision to acquiesce to the troika’s terms. Unwilling to sign such a “surrender” document, Varoufakis chose to resign.
His explanation, published later by Harry Lambert, New Statesman, 13 July 2015, was this: “I’m not going to betray my own view, that I honed back in 2010, that this country must stop extending and pretending, we must stop taking on new loans pretending that we’ve solved the problem, when we haven’t; when we have made our debt even less sustainable on condition of further austerity that even further shrinks the economy; and shifts the burden further onto the have nots, creating a humanitarian crisis. It’s something I’m not going to accept, I’m not going to be party to.”
In a 16 July teleconference with private investors that was later made public, Varoufakis described a five-month clandestine project he ran as finance minister involving hacking into Greece’s independent tax service’s computers. The project’s goal was to develop a parallel payment system that could be implemented as a contingency plan if the Greek system failed, and was dubbed “Plan B”. In it, individuals’ private identification numbers were accessed and copied to a computer controlled by a “childhood friend” of Varoufakis.
On Friday 14 August, the government (without Varoufakis) pushed successfully through Parliament the 3rd Greek bailout agreement. The bailout Bill received 222 votes to 64 (as the conservative opposition voted in favour). Up to 40 Syriza members including Varoufakis voted against the bailout. Just prior to that vote, Varoufakis rose in Parliament to offer the Prime Minister of Greece his resignation from his parliamentary seat, saying that this was the only way he knew how to combine his strong opposition to the new bailout with loyalty to the party and the Prime Minister. On 20 August, the Prime Minister himself resigned and called a snap election due to the loss of support from rebelling Syriza MPs.Varoufakis had already declared that he was not interested in standing again for Syriza. At the same time, Syriza announced that any MP who voted against the bailout package would not be standing for the party. Varoufakis did not go on to represent Popular Unity, unlike many of his ex-Syriza colleagues, as he considered the party too isolationist. Varoufakis choose not to stand in the election, saying he would focus on creating European network that would ‘restor[e] democracy’ in Europe. A month later, the national election was held and despite a low voter turnout, Tsipras and his Syriza Party won just over 35% of the vote. Combining with the Independent Greeks Party, a majority was achieved and Tsipras was returned to power.
Commentary on appointment
The Adam Smith Institute, a leading free-market think tank in the United Kingdom, “enthusiastically” supported Varoufakis’s debt-swap plan and asked the then British Chancellor of the Exchequer George Osborne to support it. Varoufakis had proposed debt swap measures, including bonds pegged to economic growth, which would replace the existing bonds of the European bailout programme.
Bloomberg said that Varoufakis was a “brilliant economist”, but he had difficult interactions with other politicians and the media. Galbraith, referring to Varoufakis’s expertise in game theory, has said that he knows as much about this subject “as anyone on the planet”, and that “[he] will be thinking more than a few steps ahead” in any interactions with the Troika.
Later political career (2015 – present)
In September 2015, Varoufakis appeared on the British topical debate show, Question Time, and was praised for his performance by Mark Lawson in The Guardian, who wrote: “…several of the sentences he spoke in a second language were more impressive than most that his fellow panellists managed in their native tongue.”
Varoufakis attended an event in London hosted by The Guardian on 23 October 2015, where he spoke about the UK’s upcoming European Union membership referendum. He said that the UK should remain in the EU, but also campaign to democratise it: “My message is simple yet rich: those of us who disdain the democratic deficit in Brussels, those of us who detest the authoritarianism of a technocracy which is incompetent and contemptuous of democracy, those of us who are most critical of Europe have a moral duty to stay in Europe, fight for it, and democratise it.” On 9 February 2016, Varoufakis launched the Democracy in Europe Movement 2025 (DiEM25) at the Volksbühne in Berlin.
On 2 April 2016, in reaction to tension between German Chancellor Angela Merkel and the IMF, Varoufakis said there was underway “an attrition war between a reasonably numerate villain (the IMF) and a chronic procrastinator (Berlin)” as to Greek debt relief.
In April 2016, Varoufakis publicly supported the idea of a basic income.
Varoufakis is married to installation artist Danae Stratou and has a daughter who is growing up in Sydney, from his first marriage to academic Margarite Anagnostopoulou (Poulos). Although born into Greece’s Orthodox Christian community and culture, his family was never religious and he considers himself an atheist. He is a motorcycle enthusiast.
Varoufakis is the author of several books on the European debt crisis, the financial imbalance in the world and game theory. He is also a recognised speaker and often appears as an analyst for national news media.
A Modest Proposal
In November 2010, he and Stuart Holland, a former British Labour Party MP and economics professor at the University of Coimbra (Portugal), published A Modest Proposal, a set of economic policies aimed at overcoming the euro crisis.
In 2013, Version 4.0 of A Modest Proposal appeared with the American economist James K. Galbraith as a third co-author. This version was published in late 2013 in French with a supporting foreword by Michel Rocard, former Prime Minister of France. Since September 2011, Truman Factor features select articles by Varoufakis in English and in Spanish. Varoufakis compares the role of the US economy since the 1970s in relation to the rest of the world with the minotaur.
Books in English
- Adults in the Room: My Battle With Europe’s Deep Establishment. London and New York: Random House, 2017 (ISBN 9781473547827)
- And the Weak Suffer What They Must? Europe’s crisis, America’s economic future. New York: Nation Books, 2016 (U.S. edition, ISBN 9781568585048); And The Weak Suffer What They Must?: Europe, Austerity and the Threat to Global Stability. London: The Bodley Head, 2016 (UK edition, ISBN 9781847924032)
- The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy. London and New York: Zed Books, 2011 (translations in German, Greek, Italian, Spanish, Czech, Finnish, French, Norwegian and Polish); second edition 2013; third edition 2015
- Europe after the Minotaur: Greece and the Future of the Global Economy. London and New York: Zed Books, 2015 (ISBN 9781783606085)
- Economic Indeterminacy: A personal encounter with the economists’ most peculiar nemesis. London and New York: Routledge, 2013 (ISBN 0415668492)
- Modern Political Economics: Making sense of the post-2008 world. London and New York: Routledge, 2011 (with Joseph Halevi and Nicholas Theocarakis)
- (ed.): Game Theory: Critical Perspectives. Volumes 1–5, London and New York: Routledge, 2001
- Foundations of Economics: A beginner’s companion. London and New York: Routledge, 1998 (translation in Mandarin)
- Game Theory: A critical introduction. London and New York: Routledge, 1995 (with Shaun Hargreaves-Heap), ISBN 978-0415094023. 2nd revised edition 2004 (Game Theory: A critical text), ISBN 978-0415250955 (translated also in Japanese)
- Rational Conflict. Oxford: Blackwell, 1991
- (ed.): Conflict in Economics. Hemel Hempstead: Harvester Wheatsheaf and New York: St Martin’s Press, 1990 (with David P. T. Young)