The lack of democracy has been responsible for the economic disaster in the EU, says Yanis Varoufakis. In the U.S. a similar situation with unemployment rates still at 11 - 12 % would have led to the fall of the government while the bureaucrats got fired. Not so in the EU where the opposite is true. The "comedy of errors" goes on since all important decisions are made in backrooms by unaccountable EU representatives like in the Euro working group. The cartel of interests behind it must be stopped to prevent a crash and an ever widening gap between public opinion and politics. And: Corporations should pay their taxes in Europe. "The reason why we have democracy in Germany, in Britain, in Greece, in the United States is because capitalism without democracy is a very uncivilized system. In which life is nasty, brutish and short."
Yanis Varoufakis: Former Finance Minister of Greece and Co-Founder of "Democracy in Europe Movement 2025" (DiEM25)
David Goessmann: Welcome to Kontext TV. Our guest today is Yanis Varoufakis. Yanis Varoufakis is formerly finance minister of Greece and he is co-founder of DiEM, Democracy in Europe Movement 2025. Welcome to Kontext TV, Yanis Varoufakis!
Yanis Varoufakis: It's a great pleasure to be here.
David Goessmann: Yanis Varoufakis, DiEM25 wants a democratized Europe. First of all, why do we need a democratization of Europe at all, I mean, we have some institutions like the EU Council and the EU Parliament, why do we need democratization? And secondly, what does what does democracy mean here? We have democratic nation states, we have democratic institutions in Germany. But on the other side, we see huge corporations dominating the political and the public sphere. So, why do we need democracy, and which democracy do you we need on the European level?
Yanis Varoufakis: All democracy is necessary. Because without it, you end up with exceptionally bad economic policies. Which are responsible for the fact, that the European Union is the sick patient of the global economy. The reason why, out of all the regions of the world, the Europe has done the worst – which is the financial crisis of 2008. Because of lack of democracy. Lets me put it really simply. If in the United States the economic outcomes were so bad as they are here, if they still had 11-12% average unemployment rate, the government would have fallen, the bureaucrats would've been fired. Here, they can keep making one mistake after the other. It's a comedy of errors, it's a debacle. They are incompetent. Yet nobody can fire them. So they keep doing the same thing again and again. You asked about democracies. Let me say something very simple. In democracies the people have the right to ask four questions of the people that make the decisions on their behalf. The important decisions, and not about who is named to gather the garbage. Well these are important decisions too, but I'm talking about decisions about our money, about our working conditions, about our environment, about our wealth estate. We should be able to ask them four questions, firstly: what powers do you have? Define them. Tell us exactly what in Europe you got, because they make them up as they are going along. Secondly: Who gave you those powers? They can't tell you. For instance, did you know that most of European policies are being dictated by something called the Euro working group, chaired by a certain Mr. Thomas Wieser? Who has more power than most of the EU government ministers. Thirdly: how do you use your powers? What exactly do you do? All the decisions are made behind closed doors. They don't even know, what their decisions are. Especially in the periphery of Europe, ruled by the totally opaque troika. And finally: how can we get rid of you? If you can't ask the rulers, how can we get rid of you, and get an answer – which you can't here, because the euro working group you cannot get rid of. The euro group you can't get rid of. Because it's a group, that makes all the important decisions, but there is no body, like a parliament, that could get rid of them. The Federal Republic, the government, can be gotten rid of by the Bundestag. In Europe, there is no such mechanism. At all. So, there is no democratic deficit here in the European union. It's not that the European Union is not sufficiently democratic. Imagine for a moment, that you have a man, or a woman, on the moon in a space suit. And he takes the helmet off. "Oh, there is an air deficit". There is no deficit; there is no air. The same would apply in the European Union. There is no democracy – there is indeed the opposite: contempt for democracy. Democracy is used as a fig leaf. In order to legitimize what they're doing. And, so, why do we need democracy? The reason why we have democracy in Germany, in Britain, in Greece, in the United States, is because capitalism without democracy is a very uncivilized system. In which life is nasty, brutish and short.
David Goessmann: We also see in nation states that there is a huge gap between public opinion and policy – and even (though) we have democratic institutions, unlike the EU. So, my question again, which democracy do we need on a European level? It should be better than what we already have.
Yanis Varoufakis: Well, we don't have democracy in the European Union. Well, we have a democracy, but it doesn't count. So, in nation states we have democratic processes and institutions and constitutions. Very democratic ones, because they evolved out of centuries of democratic struggles. But by creating the EU the way we have, annulled all this. So we have governments, political parties, standing for election in France, in Germany, in Greece, in Ireland an so on. Making all these promises. Then they get elected. And they have no instruments (by which) to implement them. Which is the reason why you have this disconnect between the government and the people. And then when the decisions are made by those who have never (been held) accountable to anyone in dark rooms, somewhere between Frankfurt and Brussels, these decisions – because the (were) never checked by democratic processes – tend to be extremely bad, because they asked the wrong questions. They don't ask the question "How can we make life better for Europeans". The question that they usually ask in Brussels and in Frankfurt is "How can we pretend that our previous policy did not fail". Not the same. So the result is a reinforcement mechanism between more authoritarianism and worse economic outcomes. This is the syndicate in Europe. So democratization is not a lofty ideal. It's what we need to stop the collapse of Europe.
David Goessmann: Should we also democratize corporations? I mean, they are deciding on very important issues.
Yanis Varoufakis: Well, for a start if would be nice if we actually constrained them. Put some limitations to them. Likewise, make them pay tax. Stop this regime of the race to the bottom, where they can go to an island and pay 12% corporation tax in order to avoid the German tax. Then, even that they don't pay, because they have a deal with the Netherlands where the money goes before it goes to the Caribbean. And in the end they end up paying 1%. So, how about, before we democratize them, make them pay where they sell.