Germany admitted austerity would destroy Greece, says Varoufakis
GREECE was forced to sign up to crippling austerity policies even though the German finance minister privately admitted he would not have endorsed the deal.
The extraordinary admission by Wolfgang Schäuble was made to Yanis Varoufakis, the former Greek finance minister, whose new memoir is serialised in The Telegraph all this weekend.
In a frank private exchange, Mr Varoufakis asked Mr Schäuble if he personally would sign up to the EU-ordered austerity plan which saw billions cut from Greek budgets and many Greeks lose their jobs. “As a patriot, no. It’s bad for your people,” the German minister replied.
The Germans are also accused in the book of blocking a Chinese rescue deal for Greece and of repeatedly going back on promises and pledges made by other senior European figures as the EU battled to hold the eurozone together. In a 500-page insider’s account of nearly six months of encounters with the leading political figures of Europe, Mr Var- oufakis exposes the lengths to which Germany will go to maintain the EU and single currency. The minister secretly recorded many of his conversations with senior global figures and today exposes the gulf between private conversations and public pronouncements.
In an interview, Mr Varoufakis says his experience contains dark warnings for Britain’s coming Brexit negotiations with a German-dominated EU. Angela Merkel warned this week that Britain should have no “illusions” about the coming talks and the EU yesterday put the issue of Irish reunification on the Brexit negotiating table.
He warns that Theresa May must prepare an alternative deal as the EU will use dubious negotiating tactics to block reasonable discussion and potential solutions.
“My advice to Theresa May is to avoid negotiation at all costs. If she doesn’t do that she will fall into the trap of [Greek prime minister] Alexis Tsipras, and it will end in capitulation,” he told The Daily Telegraph. “The parallel with Brexit is the tactic of stalling negotiations. They will get you on the sequencing. First there is the price of divorce to sort out before they will talk about free trade in the future,” he added.
In his book, Mr Varoufakis recounts how Germany used its political and financial muscle to impose austerity on Greece, despite widespread acknowledgement in other EU capitals that the policy was self-defeating and unsustainable.
He reveals private encounters with leading figures including Barack Obama, George Osborne and Emmanuel Macron, who polls say is almost certain to become the next president of France.
In one conversation at the White House, Mr Obama readily agrees that “austerity sucks” but can do nothing to deflect the German agenda.