 2015 was a pivotal year for Greece as it battled with its European creditors. And one man was at the center of this drama, Yanis Varoufakis. He is the former finance minister of Greece and joins me now. And Yanis, you have a new book about your journey. It's called Adults in the Room. It's a fantastic read. Tell us briefly how did Greece get into this debt crisis? We were part of a monetary system, the European Monetary Union or the Euro, as you know which was never designed to sustain the financial collapse of 2008. So when the financial collapse happened, the whole thing started unraveling. The French and the German banks went bust. They were bailed out, like your banks here were bailed out. Except that in Europe we don't have a federal reserve that can help. The European Central Bank is prohibited from parking bad assets on its books. So when they failed again within a few months later on the hypothesis that the Greek state would not be able to repay Deutsche Bank, Societation Europe and so on, then suddenly a second bailout had to take place. But this time they disguised it as a solidarity with Greece. They gave the largest amount of money in human history in absolute terms to the most bankrupt of states on condition of austerity that shrunk 25% of national income. What else do you want to know? An ATM will tell you that that can't end well. That sums up the entire story essentially. So they basically were saying it was a bailout for Greece, but in reality it was just to help the German and maybe French banks that lent money. Deutsche Bank, Societé Generale and Ben Pepariba, let's put names to the story as well. But the book is not... this is the prelude to the book. The book is about a fascinating story of a small nation trying to escape. It's a prison break story, breaking out of debtor's prison and how that rebellion was crushed by the great and the good to the detriment of the whole of Europe. And I think also to the detriment of the global economy too. To your point that austerity reduces national income, your whole sort of mantra throughout the 2015 saga was that Greece's debt should be restructured and that Greece shouldn't be given more money, they shouldn't be given another credit card. Explain that line of thinking. General Motors, 2009. Imagine if the Obama administration tried to salvage General Motors by giving it a huge loan by which to pay off the unsustainable loans and did it on conditions of shrinking General Motors production. General Motors would cease to exist today. The only reason why General Motors is alive is because first you restructure an unsustainable debt, then you restructure the company, you bring it back to profitability and if new debt is necessary, it happens after the debt has become viable again. This is what I was proposing for Greece. Let's restructure the debt, have decent small surplus targets, but small, not huge and not deficit ones for the budget of the Greek government, restructure the economy and move on. But the bars that be simply refuse to go to their own parliament in Berlin, in Paris and so on and so forth and confess that they had lied to their own people. The first time they gave us a bailout and why didn't they lie because they wanted to give the money to their own bankers without saying that they were giving the money to their own bankers. So they would rather kick the can down the road than go back to their parliament and tell the truth. That's politicians for you, isn't it? They want to ensure that the bad news doesn't break out on their watch, that it's rolled over to the next administration, even if this means that a whole generation is lost in the process. Now, for those who remember the 2015 saga, it was the summer of 2015, Greece actually accepted further bailout money from the European Central Bank and the IMF. Over my dead body, literally, I had to resign first. Yeah, but why did that happen? Why were you not able to convince your leadership otherwise? Well, there are two points here. One is, let's be fair to my former prime minister, well, he's still prime minister but I'm not with him anymore. Alexis Tsipras. Alexis Tsipras. Let's be fair to him. The way by which the international creditors, particularly the European creditors, crushed him was by means of what I call a simple case of financial terrorism. They closed down our banks. Imagine if in this country, in the United States of America, a foreign power or a foreign creditor were to threaten your president or your Congress, whoever that your president or Congress might be, that every ATM on Monday morning, every single ATM on Monday morning in the United States of America would cease to function unless your government accepted terms that were actually very silly terms, imposed by the foreign power. I think your whole nation would be up in arms. Now, when you say, when you say, when you say, allow me to just say my thing. Well, where I do blame my prime minister is in that he accepted it and he surrendered. We should not have surrendered. We had the power to withstand this financial terrorism, to survive for a few weeks with closed banks as long as we were prepared to haircut the bonds of the Greek state that were still owned by the European Central Bank and to start our own digital IOU-based parallel payment system. We could have held our heads high for a few more weeks and then the European Union would have to come to its senses or allow us to leave the Euro and therefore to start recovering at the substantial cost, but short-term cost. Now, when you say financial terrorism, you're talking about the ECB's ability to pull emergency liquidity from your banks. They have the power to do that. That's what you mean? Absolutely. But it amounts to closing down your banking system. So if the Fed were to go to the state of Arizona or the state of Nevada in 2008, remember when the state of Nevada went almost bankrupt after the financial sector collapsed and say either you accept a huge loan at incredible interest rates from the IMF or we, the Federal Reserve, are going to close your banks down, the Nevada banks down, and the people of Nevada have no access to their own money. That would be an act of financial terrorism. Of course, it would never happen to the United States of America because the Federal Reserve is the central bank of the Nevadans, the New Yorkers, the good people of Arizona. In Europe, we have created a common central bank without a common federal political system to govern it. This is like, we were asking for trouble, weren't we? But you must acknowledge the mistakes that previous governments in Greece made that they were people not paying their taxes. There was a lot of financial issues that made this whole crisis come to a head. The only reason why I was elected, I was a dissident, I spent all my life fighting against my government because every good patriot has a duty to disagree and fight against his government when he thinks that his government is wrong. We were elected because we promised the Greek people two things, firstly, to get them out of debtor's prison and secondly, to end the oligarchies hold over the good people of Greece and the tax evasion and the corruption and all that. But now what happened was our crashing led to a revival of the oligarchy. What do you make of Greece's situation now? Is it better or worse? Do you see their debt crisis getting any better because we don't hear about it in the headlines anymore? It's getting increasingly worse, as it would. We have a wholesale bankruptcy. We have a quadruple bankruptcy. We have a bankrupt state, have bankrupt banks, bankrupt companies and bankrupt families. Everybody owes to everyone. No one can pay back their debts. And we keep pretending under the imposition of the European Union that we will get out of this wholesale bankruptcy through more borrowing. It can't happen. It has never happened in the history of humanity. It's not going to happen in Greece. During your time as Greek finance minister, you worked, of course, with Christine Lagarde, Mario Draghi, Angela Merkel. All of these players are still in power right now. What is your message to them? My message to them is you've created, you've unleashed demonic forces that are now threatening you. Look at Marine Le Pen, the neo-fascist leader in France. You got 35% in the presidential election. Look at what's happening in Germany, the rise of the xenophobic alternative from Deutschland. Look at the way in which the IMF itself is now describing the great challenges to the global capitalism, following the diminution of the incomes of the poorer people in the West and the way that that undermines growth. So this is what this book is about. It's about the powerlessness of the powerful. The most powerful people that you mentioned in discussions mostly agreed with what we were saying. And then felt constrained in the public fora and in the organs of state and super-state organizations to actually do things consistent with what they believed. So when the powerful are not sufficiently powerful to do that which they think is right, that's when we know we're in serious trouble. Well, I think people would be surprised to know that you were actually for the United Kingdom staying in the European Union. You see, as I said before, all my life I was fighting against my own government. That's mean I'm a patriot. I don't want to see the dissolution of the government of the state of Greece. Similarly, I'm a committed Europeanist, but as a committed Democrat and Europeanist, I look at the way that the European Union establishment is wrecking the European Union and I have to oppose them. In the case of Britain, my argument with Britain was that you can't get out. I always recited to the Hotel California line, you can check out any time you'd like, but you can never leave. Just look at them now. In the name of leaving the European Union and sailing the seas and forming free trade packs with China and the United States and so on, they become so embroiled with the European Union that now they are so introverted and so Brussels-centric that this goes completely against the spirit of Brexit. Right after the Brexit vote, we saw a significant market reaction, but since then, a year and a half later, investors really don't care about this. They're not factoring this in. Are they making a mistake? And do you think this Brexit situation will come back to haunt the stock market? It's not just Brexit. You can see that the markets have become numb. They're not reacting to substantial news. I believe that after the 2008 financial catastrophe, the way in which central banks were forced to. I'm not criticizing them. I'm just describing the situation. The way they were forced to print mountains of money in order to reflow the global financial sector has worked a little bit like giving cortisone to a cancer patient. The patient picks up, becomes a bit anodyne and a bit numb, but the true cause of the disease has not been defeated. It's actually doing its catastrophic work under the surface. And I think this is what we're facing now and the markets better wake up to the fact that there is a great disparity between the official version and the reality when it comes to investment flows, when it comes to capital flows, trade flows, the news from the roots of our economy are no good. Before we let you go, what are you doing right now? Would you ever sort of go back into the government in Greece? Have you sort of given up in your quest to resolve Greece's debt crisis? Well, I don't believe that Greece's problems can be resolved without having a systematic approach to the European trials and tribulations. This is why I spent all my time working on something we call the Democracy in Europe Movement, DiEM25. We have put together a pan-European political movement. We are going to contest the European parliament elections in May 2019. We offered Europeans what we call the European New Deal inspired by Roosevelt, but also by events in Europe. And we will try to defeat the powers of idiocy. Which I reckon are Europe at the moment. Well, it's a fascinating conversation. Yanis Varoufakis, former finance minister of Greece, thank you for coming by. Thank you for having me.