Galbraith: Varoufakis and the recent negotiations

James Galbraith spent eight days in February traipsing around Europe with Yanis Varoufakis.[1]

“I stayed with the tech teams, from the 11th to the 17th, including the Brussels meeting,” says Galbraith. “I was in the boiler room with the Greek guys, the working stiffs.”


He’s shared the experience via an article in Fortune. The frequent lack of professionalism and coordination on the European side shocked him.

At the Eurogroup conclave, Pierre Moscovici, the EU commissioner for economic and financial affairs, presented Varoufakis with a draft communiqué that allowed Greece to apply for an extension of its loan agreement while granting time to discuss a new growth program for Greece. As Varoufakis stated at the press conference after the meeting, he was poised to sign the Moscovici communiqué, which he praised as a “splendid document” and a “genuine breakthrough.”

But the chief of the Eurogroup, Jeroen Dijsselbloem, was working on his own document. “Yanis said, ‘I have a text,’ and Dijesselbloem said, ‘No, this is the text.’”

Galbraith and the Greek team then attempted to combine portions of the two drafts into a document acceptable to both sides. “My day from that point, along with some other people, was taken up with trying to turn either of those texts into something that could be signed. In another half hour, we could have done it.”

Then, according to Galbraith, German finance minister Wolfgang Schaeuble closed the meeting. “He was saying ‘no’” to fashioning a joint statement as a prelude to a compromise, says Galbraith.

Nor was this the only occasion when the European negotiating side seemed to have their wires crossed.

On February 18, Varoufakis presented a formal request for an extension of Greece’s loan agreement with the Eurogroup. Once again, the divergent responses left Galbraith confounded.

“Jean-Claude Juncker [president of the European Commission] said it was a good start,” says Galbraith. He also notes that Germany’s vice chancellor, Sigmar Gabriel, said that the loan extension letter was a “starting point” for negotiations. But Schaeuble contradicted Gabriel, dismissing the request as “not a substantial position.”

“My eyes are bugging out watching this,” says Galbraith. “This is Germany, the most powerful government in Europe!”

We only have his word for it, of course. Still, lying about such critical matters for someone with such a high professional profile would seem suicidal.

He certainly has the highest regard for Varoufakis, seeing him as a bracing, iconoclastic truth teller let loose in enclaves where such behaviour is somewhere between rare and unknown. One comment was particularly interesting.

As an example of Varoufakis’ unvarnished honesty, he cites his friend’s statement that among those with whom he’s negotiated, Schaeuble, a staunch opponent, is “the only one whom I have found to have intellectual substance.”

Nor does he think his friend is for turning.

“That’s impossible,” says Galbraith. “He’d get on his motorcycle and drive off. He gnashed his teeth to take the job. He wanted to put his ideas into practice.”

Whether he’s right or wrong,[2] it seems this most unlikely match will be played out to the end.

♦   ♦   ♦

1 He and Varoufakis met as colleagues at the University of Texas, hit it off and became “intellectual soul mates”. With Stuart Holland they authored a treatise on resolving Greece’s problems within the Eurozone entitled “A Modest Proposal“.

2 Despite hailing from somewhere near the other end of the ideological spectrum I think Varoufakis has considerable logic, and justice, on his side.



10 thoughts on “Galbraith: Varoufakis and the recent negotiations

  1. “logic, and justice” My impression of the EU is that, their bureaucracies obsession with harmonization, has resulted in the opposite of logic, and justice. am also struck by their inability to hold a well run meeting- after all ‘meetings’ is what they mostly do,no?

    • Here’s my take. By not resolving matters properly back when it would have been comparatively straightforward to do so, the EU et al put themselves in an impossible road. Now that the room for manoeuvre is almost gone, they’re deathly afraid of doing anything that could put generalised concessions on the table. If they “give in” to Greece, a long line will soon form: Portugal, Spain, Italy, Ireland, perhaps France.

      As for their apparent clumsiness running meetings, maybe it’s tied into the above. Perhaps they quite simply don’t know what to do; some probably recognise the illogicality of their position, others are still putting their fingers in their ears and humming the same old tune, just more loudly.

      It will be interesting.

      • ingolf
        hopefully not, too interesting.

        Re management ‘style’ , I read your piece and was struck by a sense of familiarity- The EU’s European Patent Office EPO ( important in economic terms) has for sometime been descending into serious breakdown. Speaking as an outsider, the by now apparently intractable, mess seems to be made up of a mix of equal parts of, a old style employment culture that was expensive, slow and rusty, and a new ‘CEO’ who seems to have less finesse than Gengis Khan, when it comes to meetings.

  2. Thanks Ingolf – I’ve come to similar conclusions. It’s quite thrilling to respect someone’s intellect and integrity when they come from a very different place to oneself. We’re actually having a clash of ideas rather than debate as ideological positioning.

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