Abstract
In Adults in the Room, Yanis Varoufakis’ account of his 6-month tenure as Greece’s Minister of Finance, the author’s recollections rely not only on traditional aide mémoires such as contemporaneous notes but also on reported speech transcribed from audio and video recordings made on Varoufakis’ phone during meetings and conversations (p. ix). Such is the technological capability of our times. Access to these recordings allows Varoufakis to offer forward a rich and compelling narrative which is gripping and, like a good novel, draws the reader in.
Adults in the Room is a scholarly text, but not an academic one. Varoufakis’ aim is not to convince academics of a new theory or insight. In terms of economic analysis, Varoufakis restates what most scholars and readers of Capital and Class, no doubt long ago, concluded: that in 2010, the Greek government was bankrupt when it was given loans by the Troika; that these loans were advanced to prevent German and French banks being publicly embarrassed – and financially punished – by the bad debts which they had extended to Greece; and that the European Union (EU) in particular negotiated, and continues to negotiate, Greek sovereign debt in bad faith, enforcing hardship on the Greek people and disciplining their government through a strait-jacket of neoliberal policy reforms.
Varoufakis’ argument throughout is that the economic policies adopted by the Troika towards Greece did not make sense because they were not intended to. Despite his best efforts as Minister of Finance to find modest ways of restructuring Greek debt so that the Greek state might meet its obligations and move out of bankruptcy, Varoufakis finds himself frustrated at every turn. By his account, the reasons for this were that prior to 2015 the EU in particular, and the Troika more generally, had wanted to carve up Greek assets and impose upon the Greek people economic reforms more favourable to international capital. After 2015, with the Syriza movement’s high point having come in the January election of that year, the EU had further reason to use debt as a lever against the Greek government – to show the populations of other countries that electing politicians who promised to extract deals from the EU would lead only to hardship. It worked. By the end of the year, Syriza was divided while in Spain Podemos was also denied at the polls despite the enthusiasm with which it had first been greeted.
At times, Varoufakis’ account is both illuminating and frustrating. For example, he found himself confounded to have a discussion with Troika economists over value-added tax (VAT). The Troika’s models assumed that increasing VAT had no effect on demand, thus when Varoufakis asked for a prediction as to what would happen to government revenue if VAT was increased to 233% the answer was ‘a massive increase in revenues’ (p. 417). Such a prediction is, of course, nothing short of silly. Varoufakis goes on to provide his own models in which he has supreme confidence, but it niggles that there is not some consideration of how such inappropriate assumptions can be accepted unproblematically by governments and supra-national organisations. One suspects that the reason for this is that to do so would force him into a more radical position than he wishes to adopt.
Varoufakis’ account of his dealings with the Troika has attracted the allegation that he is labouring under something akin to either a hero or a persecution complex. To my mind, this is unfair. Rather, Adults in the Room reminded me of Tony Benn’s diaries – you know he’s right, and that the proposals are not as outrageous as they are portrayed by his enemies. But you also know – even if he does not – that the establishment will not let him have his way. Nevertheless, this book will be an essential resource for future analyses of the Great Recession and its ongoing aftermath. One can imagine future history students reading Varoufakis’ account and answering gobbet questions about it for their finals. Those students, and all scholars, will struggle with the questions which accounts such as these raise – are they a complete account, are they reliable, were they written in close proximity to the events described, did the author have a mind to posterity, what evidence supports the account given? As other accounts are published, these questions will be turned over and the use of audio and video evidence will amplify such questions too. For now, what Varoufakis has provided is an essential testimony as to his part in Greece’s struggle with the Troika and in the operation of international finance and economics more broadly. And if one wants to make a prediction based on this experience, the obvious one would be that if a skilled, eloquent and popular person such as Varoufakis could not obtain concessions from the EU, then lesser people in the current UK government have no chance.