0:00:01.200,0:00:02.400
Democracy.

0:00:02.960,0:00:04.296
In the West,

0:00:04.320,0:00:08.256
we make a colossal mistake[br]taking it for granted.

0:00:08.280,0:00:09.576
We see democracy

0:00:09.600,0:00:14.096
not as the most fragile[br]of flowers that it really is,

0:00:14.120,0:00:16.960
but we see it as part[br]of our society's furniture.

0:00:17.960,0:00:21.960
We tend to think of it[br]as an intransigent given.

0:00:22.680,0:00:27.896
We mistakenly believe that capitalism[br]begets inevitably democracy.

0:00:27.920,0:00:29.256
It doesn't.

0:00:29.280,0:00:33.656
Singapore's Lee Kuan Yew[br]and his great imitators in Beijing

0:00:33.680,0:00:36.616
have demonstrated beyond reasonable doubt

0:00:36.640,0:00:40.536
that it is perfectly possible[br]to have a flourishing capitalism,

0:00:40.560,0:00:42.160
spectacular growth,

0:00:42.960,0:00:46.016
while politics remains democracy-free.

0:00:46.040,0:00:50.456
Indeed, democracy is receding[br]in our neck of the woods,

0:00:50.480,0:00:52.056
here in Europe.

0:00:52.080,0:00:55.456
Earlier this year,[br]while I was representing Greece --

0:00:55.480,0:00:58.216
the newly elected Greek government --

0:00:58.240,0:01:00.936
in the Eurogroup as its Finance Minister,

0:01:00.960,0:01:05.896
I was told in no uncertain terms[br]that our nation's democratic process --

0:01:05.920,0:01:07.336
our elections --

0:01:07.360,0:01:09.136
could not be allowed to interfere

0:01:09.160,0:01:12.400
with economic policies[br]that were being implemented in Greece.

0:01:13.120,0:01:14.336
At that moment,

0:01:14.360,0:01:18.656
I felt that there could be no greater[br]vindication of Lee Kuan Yew,

0:01:18.680,0:01:20.216
or the Chinese Communist Party,

0:01:20.240,0:01:23.976
indeed of some recalcitrant[br]friends of mine who kept telling me

0:01:24.000,0:01:28.320
that democracy would be banned[br]if it ever threatened to change anything.

0:01:29.640,0:01:32.896
Tonight, here, I want to present to you

0:01:32.920,0:01:36.080
an economic case[br]for an authentic democracy.

0:01:36.600,0:01:41.456
I want to ask you[br]to join me in believing again

0:01:41.480,0:01:43.480
that Lee Kuan Yew,

0:01:44.480,0:01:45.856
the Chinese Communist Party

0:01:45.880,0:01:47.256
and indeed the Eurogroup

0:01:47.280,0:01:50.920
are wrong in believing[br]that we can dispense with democracy --

0:01:51.600,0:01:55.336
that we need an authentic,[br]boisterous democracy.

0:01:55.360,0:01:58.336
And without democracy,

0:01:58.360,0:02:01.216
our societies will be nastier,

0:02:01.240,0:02:03.376
our future bleak

0:02:03.400,0:02:06.216
and our great, new technologies wasted.

0:02:06.240,0:02:07.496
Speaking of waste,

0:02:07.520,0:02:10.295
allow me to point out[br]an interesting paradox

0:02:10.320,0:02:13.096
that is threatening[br]our economies as we speak.

0:02:13.120,0:02:15.416
I call it the twin peaks paradox.

0:02:15.440,0:02:16.736
One peak you understand --

0:02:16.760,0:02:18.376
you know it, you recognize it --

0:02:18.400,0:02:23.456
is the mountain of debts[br]that has been casting a long shadow

0:02:23.480,0:02:26.296
over the United States,[br]Europe, the whole world.

0:02:26.320,0:02:28.200
We all recognize the mountain of debts.

0:02:28.880,0:02:33.000
But few people discern its twin.

0:02:33.640,0:02:35.840
A mountain of idle cash

0:02:36.840,0:02:40.200
belonging to rich savers[br]and to corporations,

0:02:41.120,0:02:43.696
too terrified to invest it

0:02:43.720,0:02:47.016
into the productive activities[br]that can generate the incomes

0:02:47.040,0:02:50.096
from which you can extinguish[br]the mountain of debts

0:02:50.120,0:02:54.096
and which can produce all those things[br]that humanity desperately needs,

0:02:54.120,0:02:55.776
like green energy.

0:02:55.800,0:02:58.136
Now let me give you two numbers.

0:02:58.160,0:02:59.496
Over the last three months,

0:02:59.520,0:03:02.296
in the United States,[br]in Britain and in the Eurozone,

0:03:02.320,0:03:06.736
we have invested, collectively,[br]3.4 trillion dollars

0:03:06.760,0:03:09.416
on all the wealth-producing goods --

0:03:09.440,0:03:12.456
things like industrial plants, machinery,

0:03:12.480,0:03:14.696
office blocks, schools,

0:03:14.720,0:03:17.856
roads, railways, machinery,[br]and so on and so forth.

0:03:17.880,0:03:20.616
$3.4 trillion sounds like a lot of money

0:03:20.640,0:03:24.496
until you compare it to the $5.1 trillion

0:03:24.520,0:03:27.216
that has been slushing around[br]in the same countries,

0:03:27.240,0:03:29.056
in our financial institutions,

0:03:29.080,0:03:32.280
doing absolutely nothing[br]during the same period

0:03:33.440,0:03:38.296
except inflating stock exchanges[br]and bidding up house prices.

0:03:38.320,0:03:43.576
So a mountain of debt[br]and a mountain of idle cash

0:03:43.600,0:03:47.296
form twin peaks, [br]failing to cancel each other out

0:03:47.320,0:03:50.136
through the normal[br]operation of the markets.

0:03:50.160,0:03:52.480
The result is stagnant wages,

0:03:53.360,0:03:59.016
more than a quarter of 25- to 54-year-olds[br]in America, in Japan and in Europe

0:03:59.040,0:04:00.536
out of work.

0:04:00.560,0:04:02.896
And consequently, low aggregate demand,

0:04:02.920,0:04:05.136
which in a never-ending cycle,

0:04:05.160,0:04:07.880
reinforces the pessimism of the investors,

0:04:08.880,0:04:12.696
who, fearing low demand,[br]reproduce it by not investing --

0:04:12.720,0:04:15.416
exactly like Oedipus' father,

0:04:15.440,0:04:17.935
who, terrified[br]by the prophecy of the oracle

0:04:17.959,0:04:20.696
that his son would grow up to kill him,

0:04:20.720,0:04:22.656
unwittingly engineered the conditions

0:04:22.680,0:04:25.680
that ensured that Oedipus,[br]his son, would kill him.

0:04:26.560,0:04:28.560
This is my quarrel with capitalism.

0:04:29.200,0:04:31.216
Its gross wastefulness,

0:04:31.240,0:04:32.856
all this idle cash,

0:04:32.880,0:04:36.976
should be energized to improve lives,

0:04:37.000,0:04:38.336
to develop human talents,

0:04:38.360,0:04:41.216
and indeed to finance[br]all these technologies,

0:04:41.240,0:04:42.496
green technologies,

0:04:42.520,0:04:45.280
which are absolutely essential[br]for saving planet Earth.

0:04:46.280,0:04:49.536
Am I right in believing[br]that democracy might be the answer?

0:04:49.560,0:04:50.776
I believe so,

0:04:50.800,0:04:52.016
but before we move on,

0:04:52.040,0:04:53.440
what do we mean by democracy?

0:04:54.520,0:04:56.936
Aristotle defined democracy

0:04:56.960,0:05:01.896
as the constitution[br]in which the free and the poor,

0:05:01.920,0:05:04.080
being in the majority, control government.

0:05:05.000,0:05:08.296
Now, of course Athenian democracy[br]excluded too many.

0:05:08.320,0:05:11.360
Women, migrants and,[br]of course, the slaves.

0:05:12.040,0:05:13.296
But it would be a mistake

0:05:13.320,0:05:16.896
to dismiss the significance[br]of ancient Athenian democracy

0:05:16.920,0:05:18.920
on the basis of whom it excluded.

0:05:19.680,0:05:20.936
What was more pertinent,

0:05:20.960,0:05:24.816
and continues to be so[br]about ancient Athenian democracy,

0:05:24.840,0:05:28.336
was the inclusion of the working poor,

0:05:28.360,0:05:33.056
who not only acquired[br]the right to free speech,

0:05:33.080,0:05:35.336
but more importantly, crucially,

0:05:35.360,0:05:37.976
they acquired the rights[br]to political judgments

0:05:38.000,0:05:40.376
that were afforded equal weight

0:05:40.400,0:05:44.056
in the decision-making[br]concerning matters of state.

0:05:44.080,0:05:47.136
Now, of course, Athenian[br]democracy didn't last long.

0:05:47.160,0:05:51.576
Like a candle that burns brightly,[br]it burned out quickly.

0:05:51.600,0:05:52.816
And indeed,

0:05:52.840,0:05:57.096
our liberal democracies today[br]do not have their roots in ancient Athens.

0:05:57.120,0:05:59.456
They have their roots in the Magna Carta,

0:05:59.480,0:06:02.736
in the 1688 Glorious Revolution,

0:06:02.760,0:06:04.976
indeed in the American constitution.

0:06:05.000,0:06:10.016
Whereas Athenian democracy[br]was focusing on the masterless citizen

0:06:10.040,0:06:12.320
and empowering the working poor,

0:06:13.240,0:06:17.416
our liberal democracies are founded[br]on the Magna Carta tradition,

0:06:17.440,0:06:20.536
which was, after all,[br]a charter for masters.

0:06:20.560,0:06:24.856
And indeed, liberal democracy[br]only surfaced when it was possible

0:06:24.880,0:06:28.736
to separate fully the political sphere[br]from the economic sphere,

0:06:28.760,0:06:33.816
so as to confine the democratic process[br]fully in the political sphere,

0:06:33.840,0:06:35.696
leaving the economic sphere --

0:06:35.720,0:06:37.656
the corporate world, if you want --

0:06:37.680,0:06:40.360
as a democracy-free zone.

0:06:41.720,0:06:44.696
Now, in our democracies today,

0:06:44.720,0:06:48.216
this separation of the economic[br]from the political sphere,

0:06:48.240,0:06:50.496
the moment it started happening,

0:06:50.520,0:06:54.816
it gave rise to an inexorable,[br]epic struggle between the two,

0:06:54.840,0:06:58.056
with the economic sphere[br]colonizing the political sphere,

0:06:58.080,0:06:59.600
eating into its power.

0:07:00.480,0:07:03.880
Have you wondered why politicians[br]are not what they used to be?

0:07:04.560,0:07:06.976
It's not because their DNA[br]has degenerated.

0:07:07.000,0:07:08.616
(Laughter)

0:07:08.640,0:07:13.256
It is rather because one can be[br]in government today and not in power,

0:07:13.280,0:07:16.576
because power has migrated[br]from the political to the economic sphere,

0:07:16.600,0:07:17.840
which is separate.

0:07:19.160,0:07:20.736
Indeed,

0:07:20.760,0:07:23.056
I spoke about my quarrel[br]with capitalism.

0:07:23.080,0:07:24.816
If you think about it,

0:07:24.840,0:07:28.160
it is a little bit like[br]a population of predators,

0:07:29.080,0:07:33.800
that are so successful in decimating[br]the prey that they must feed on,

0:07:34.560,0:07:36.696
that in the end they starve.

0:07:36.720,0:07:37.936
Similarly,

0:07:37.960,0:07:41.656
the economic sphere has been colonizing[br]and cannibalizing the political sphere

0:07:41.680,0:07:45.056
to such an extent[br]that it is undermining itself,

0:07:45.080,0:07:46.816
causing economic crisis.

0:07:46.840,0:07:48.936
Corporate power is increasing,

0:07:48.960,0:07:51.176
political goods are devaluing,

0:07:51.200,0:07:53.016
inequality is rising,

0:07:53.040,0:07:54.616
aggregate demand is falling

0:07:54.640,0:08:00.760
and CEOs of corporations are too scared[br]to invest the cash of their corporations.

0:08:01.520,0:08:08.176
So the more capitalism succeeds[br]in taking the demos out of democracy,

0:08:08.200,0:08:09.536
the taller the twin peaks

0:08:09.560,0:08:13.096
and the greater the waste[br]of human resources

0:08:13.120,0:08:14.560
and humanity's wealth.

0:08:15.640,0:08:18.496
Clearly, if this is right,

0:08:18.520,0:08:21.576
we must reunite the political[br]and economic spheres

0:08:21.600,0:08:25.096
and better do it[br]with a demos being in control,

0:08:25.120,0:08:28.056
like in ancient Athens[br]except without the slaves

0:08:28.080,0:08:31.040
or the exclusion of women and migrants.

0:08:32.120,0:08:33.856
Now, this is not an original idea.

0:08:33.880,0:08:36.655
The Marxist left[br]had that idea 100 years ago

0:08:36.679,0:08:38.360
and it didn't go very well, did it?

0:08:38.840,0:08:42.256
The lesson that we learned[br]from the Soviet debacle

0:08:42.280,0:08:48.616
is that only by a miracle[br]will the working poor be reempowered,

0:08:48.640,0:08:50.616
as they were in ancient Athens,

0:08:50.640,0:08:54.400
without creating new forms[br]of brutality and waste.

0:08:54.960,0:08:56.200
But there is a solution:

0:08:56.880,0:08:58.720
eliminate the working poor.

0:08:59.360,0:09:00.616
Capitalism's doing it

0:09:00.640,0:09:05.520
by replacing low-wage workers[br]with automata, androids, robots.

0:09:07.080,0:09:08.296
The problem is

0:09:08.320,0:09:11.536
that as long as the economic[br]and the political spheres are separate,

0:09:11.560,0:09:15.880
automation makes the twin peaks taller,

0:09:16.640,0:09:18.376
the waste loftier

0:09:18.400,0:09:20.456
and the social conflicts deeper,

0:09:20.480,0:09:21.680
including --

0:09:22.320,0:09:23.856
soon, I believe --

0:09:23.880,0:09:25.480
in places like China.

0:09:26.720,0:09:29.136
So we need to reconfigure,

0:09:29.160,0:09:32.816
we need to reunite the economic[br]and the political spheres,

0:09:32.840,0:09:38.216
but we'd better do it[br]by democratizing the reunified sphere,

0:09:38.240,0:09:43.936
lest we end up with[br]a surveillance-mad hyperautocracy

0:09:43.960,0:09:47.976
that makes The Matrix, the movie,[br]look like a documentary.

0:09:48.000,0:09:49.576
(Laughter)

0:09:49.600,0:09:53.016
So the question is not[br]whether capitalism will survive

0:09:53.040,0:09:55.360
the technological innovations[br]it is spawning.

0:09:55.960,0:09:57.576
The more interesting question

0:09:57.600,0:10:03.336
is whether capitalism will be succeeded[br]by something resembling a Matrix dystopia

0:10:03.360,0:10:07.776
or something much closer[br]to a Star Trek-like society,

0:10:07.800,0:10:10.176
where machines serve the humans

0:10:10.200,0:10:14.616
and the humans expend their energies[br]exploring the universe

0:10:14.640,0:10:18.936
and indulging in long debates[br]about the meaning of life

0:10:18.960,0:10:22.960
in some ancient, Athenian-like,[br]high tech agora.

0:10:24.360,0:10:27.800
I think we can afford to be optimistic.

0:10:29.400,0:10:30.696
But what would it take,

0:10:30.720,0:10:32.696
what would it look like

0:10:32.720,0:10:37.600
to have this Star Trek-like utopia,[br]instead of the Matrix-like dystopia?

0:10:38.240,0:10:39.496
In practical terms,

0:10:39.520,0:10:41.256
allow me to share just briefly,

0:10:41.280,0:10:42.480
a couple of examples.

0:10:43.080,0:10:44.856
At the level of the enterprise,

0:10:44.880,0:10:47.216
imagine a capital market,

0:10:47.240,0:10:49.920
where you earn capital as you work,

0:10:50.880,0:10:56.216
and where your capital follows you[br]from one job to another,

0:10:56.240,0:10:57.736
from one company to another,

0:10:57.760,0:10:59.016
and the company --

0:10:59.040,0:11:02.496
whichever one you happen[br]to work at at that time --

0:11:02.520,0:11:06.840
is solely owned by those who happen[br]to work in it at that moment.

0:11:07.400,0:11:12.096
Then all income stems[br]from capital, from profits,

0:11:12.120,0:11:16.496
and the very concept[br]of wage labor becomes obsolete.

0:11:16.520,0:11:23.136
No more separation between those[br]who own but do not work in the company

0:11:23.160,0:11:26.416
and those who work[br]but do not own the company;

0:11:26.440,0:11:29.640
no more tug-of-war[br]between capital and labor;

0:11:30.440,0:11:34.576
no great gap between[br]investment and saving;

0:11:34.600,0:11:37.840
indeed, no towering twin peaks.

0:11:38.600,0:11:40.976
At the level of the global[br]political economy,

0:11:41.000,0:11:42.936
imagine for a moment

0:11:42.960,0:11:47.936
that our national currencies[br]have a free-floating exchange rate,

0:11:47.960,0:11:51.736
with a universal,[br]global, digital currency,

0:11:51.760,0:11:55.776
one that is issued[br]by the International Monetary Fund,

0:11:55.800,0:11:57.016
the G-20,

0:11:57.040,0:11:59.576
on behalf of all humanity.

0:11:59.600,0:12:00.816
And imagine further

0:12:00.840,0:12:05.176
that all international trade[br]is denominated in this currency --

0:12:05.200,0:12:07.016
let's call it "the cosmos,"

0:12:07.040,0:12:08.440
in units of cosmos --

0:12:09.720,0:12:14.096
with every government agreeing[br]to be paying into a common fund

0:12:14.120,0:12:19.656
a sum of cosmos units proportional[br]to the country's trade deficit,

0:12:19.680,0:12:23.080
or indeed to a country's trade surplus.

0:12:23.720,0:12:28.936
And imagine that that fund is utilized[br]to invest in green technologies,

0:12:28.960,0:12:34.280
especially in parts of the world[br]where investment funding is scarce.

0:12:34.840,0:12:36.416
This is not a new idea.

0:12:36.440,0:12:39.776
It's what, effectively,[br]John Maynard Keynes proposed

0:12:39.800,0:12:43.120
in 1944 at the Bretton Woods Conference.

0:12:44.080,0:12:45.296
The problem is

0:12:45.320,0:12:48.616
that back then, they didn't have[br]the technology to implement it.

0:12:48.640,0:12:49.856
Now we do,

0:12:49.880,0:12:55.800
especially in the context[br]of a reunified political-economic sphere.

0:12:56.640,0:12:59.056
The world that I am describing to you

0:12:59.080,0:13:01.536
is simultaneously libertarian,

0:13:01.560,0:13:06.136
in that it prioritizes[br]empowered individuals,

0:13:06.160,0:13:07.376
Marxist,

0:13:07.400,0:13:10.616
since it will have confined[br]to the dustbin of history

0:13:10.640,0:13:13.096
the division between capital and labor,

0:13:13.120,0:13:14.680
and Keynesian,

0:13:15.320,0:13:16.800
global Keynesian.

0:13:18.320,0:13:19.896
But above all else,

0:13:19.920,0:13:24.840
it is a world in which we will be able[br]to imagine an authentic democracy.

0:13:25.760,0:13:27.520
Will such a world dawn?

0:13:28.400,0:13:32.896
Or shall we descend[br]into a Matrix-like dystopia?

0:13:32.920,0:13:37.040
The answer lies in the political choice[br]that we shall be making collectively.

0:13:37.720,0:13:39.336
It is our choice,

0:13:39.360,0:13:41.680
and we'd better make it democratically.

0:13:42.280,0:13:43.536
Thank you.

0:13:43.560,0:13:46.920
(Applause)

0:13:49.480,0:13:50.680
Bruno Giussani: Yanis ...

0:13:51.880,0:13:56.320
It was you who described yourself[br]in your bios as a libertarian Marxist.

0:13:58.400,0:14:00.920
What is the relevance[br]of Marx's analysis today?

0:14:02.000,0:14:05.336
Yanis Varoufakis: Well, if there was[br]any relevance in what I just said,

0:14:05.360,0:14:06.576
then Marx is relevant.

0:14:06.600,0:14:10.096
Because the whole point of reunifying[br]the political and economic is --

0:14:10.120,0:14:11.336
if we don't do it,

0:14:11.360,0:14:13.616
then technological innovation[br]is going to create

0:14:13.640,0:14:15.936
such a massive fall in aggregate demand,

0:14:15.960,0:14:20.736
what Larry Summers[br]refers to as secular stagnation.

0:14:20.760,0:14:23.616
With this crisis migrating[br]from one part of the world,

0:14:23.640,0:14:25.176
as it is now,

0:14:25.200,0:14:27.896
it will destabilize[br]not only our democracies,

0:14:27.920,0:14:32.136
but even the emerging world that is not[br]that keen on liberal democracy.

0:14:32.160,0:14:35.976
So if this analysis holds water,[br]then Marx is absolutely relevant.

0:14:36.000,0:14:37.736
But so is Hayek,

0:14:37.760,0:14:39.576
that's why I'm a libertarian Marxist,

0:14:39.600,0:14:40.816
and so is Keynes,

0:14:40.840,0:14:42.736
so that's why I'm totally confused.

0:14:42.760,0:14:43.976
(Laughter)

0:14:44.000,0:14:46.056
BG: Indeed, and possibly we are too, now.

0:14:46.080,0:14:47.376
(Laughter)

0:14:47.400,0:14:49.376
(Applause)

0:14:49.400,0:14:52.176
YV: If you are not confused,[br]you are not thinking, OK?

0:14:52.200,0:14:55.296
BG: That's a very, very Greek[br]philosopher kind of thing to say --

0:14:55.320,0:14:56.976
YV: That was Einstein, actually --

0:14:57.000,0:14:59.616
BG: During your talk[br]you mentioned Singapore and China,

0:14:59.640,0:15:01.696
and last night at the speaker dinner,

0:15:01.720,0:15:06.896
you expressed a pretty strong opinion[br]about how the West looks at China.

0:15:06.920,0:15:08.496
Would you like to share that?

0:15:08.520,0:15:10.680
YV: Well, there's a great[br]degree of hypocrisy.

0:15:11.400,0:15:15.696
In our liberal democracies,[br]we have a semblance of democracy.

0:15:15.720,0:15:18.456
It's because we have confined,[br]as I was saying in my talk,

0:15:18.480,0:15:20.136
democracy to the political sphere,

0:15:20.160,0:15:23.616
while leaving the one sphere[br]where all the action is --

0:15:23.640,0:15:24.856
the economic sphere --

0:15:24.880,0:15:26.720
a completely democracy-free zone.

0:15:27.280,0:15:28.536
In a sense,

0:15:28.560,0:15:30.760
if I am allowed to be provocative,

0:15:31.880,0:15:36.296
China today is closer to Britain[br]in the 19th century.

0:15:36.320,0:15:37.576
Because remember,

0:15:37.600,0:15:39.936
we tend to associate[br]liberalism with democracy --

0:15:39.960,0:15:41.456
that's a mistake, historically.

0:15:41.480,0:15:44.016
Liberalism, liberal,[br]it's like John Stuart Mill.

0:15:44.040,0:15:48.736
John Stuart Mill was particularly[br]skeptical about the democratic process.

0:15:48.760,0:15:54.136
So what you are seeing now in China[br]is a very similar process

0:15:54.160,0:15:57.336
to the one that we had in Britain[br]during the Industrial Revolution,

0:15:57.360,0:16:00.336
especially the transition[br]from the first to the second.

0:16:00.360,0:16:03.656
And to be castigating China

0:16:03.680,0:16:06.816
for doing that which the West did[br]in the 19th century,

0:16:06.840,0:16:08.160
smacks of hypocrisy.

0:16:09.520,0:16:13.176
BG: I am sure that many people here[br]are wondering about your experience

0:16:13.200,0:16:15.936
as the Finance Minister of Greece[br]earlier this year.

0:16:15.960,0:16:17.341
YV: I knew this was coming.

0:16:17.365,0:16:18.616
BG: Yes.

0:16:18.640,0:16:19.976
BG: Six months after,

0:16:20.000,0:16:22.400
how do you look back[br]at the first half of the year?

0:16:23.920,0:16:26.536
YV: Extremely exciting,[br]from a personal point of view,

0:16:26.560,0:16:27.816
and very disappointing,

0:16:27.840,0:16:31.736
because we had an opportunity[br]to reboot the Eurozone.

0:16:31.760,0:16:33.856
Not just Greece, the Eurozone.

0:16:33.880,0:16:36.816
To move away from the complacency

0:16:36.840,0:16:39.296
and the constant denial[br]that there was a massive --

0:16:39.320,0:16:42.176
and there is a massive[br]architectural fault line

0:16:42.200,0:16:44.376
going through the Eurozone,

0:16:44.400,0:16:48.816
which is threatening, massively,[br]the whole of the European Union process.

0:16:48.840,0:16:52.016
We had an opportunity[br]on the basis of the Greek program --

0:16:52.040,0:16:53.376
which by the way,

0:16:53.400,0:16:57.776
was the first program[br]to manifest that denial --

0:16:57.800,0:16:59.016
to put it right.

0:16:59.040,0:17:00.256
And, unfortunately,

0:17:00.280,0:17:02.096
the powers in the Eurozone,

0:17:02.120,0:17:03.320
in the Eurogroup,

0:17:04.079,0:17:06.056
chose to maintain denial.

0:17:06.079,0:17:07.336
But you know what happens.

0:17:07.359,0:17:09.415
This is the experience[br]of the Soviet Union.

0:17:09.440,0:17:11.935
When you try to keep alive

0:17:11.960,0:17:15.839
an economic system[br]that architecturally cannot survive,

0:17:16.520,0:17:19.175
through political will[br]and through authoritarianism,

0:17:19.200,0:17:20.856
you may succeed in prolonging it,

0:17:20.880,0:17:22.455
but when change happens

0:17:22.480,0:17:24.976
it happens very abruptly[br]and catastrophically.

0:17:25.000,0:17:27.007
BG: What kind of change[br]are you foreseeing?

0:17:27.031,0:17:28.285
YV: Well, there's no doubt

0:17:28.309,0:17:30.976
that if we don't change[br]the architecture of the Eurozone,

0:17:31.001,0:17:32.895
the Eurozone has no future.

0:17:32.920,0:17:35.816
BG: Did you make any mistakes[br]when you were Finance Minister?

0:17:35.840,0:17:37.056
YV: Every day.

0:17:37.080,0:17:39.616
BG: For example?[br]YV: Anybody who looks back --

0:17:39.640,0:17:41.720
(Applause)

0:17:44.120,0:17:45.496
No, but seriously.

0:17:45.520,0:17:49.096
If there's any Minister of Finance,[br]or of anything else for that matter,

0:17:49.120,0:17:51.336
who tells you after six months in a job,

0:17:51.360,0:17:55.056
especially in such a stressful situation,

0:17:55.080,0:17:57.776
that they have made no mistake,[br]they're dangerous people.

0:17:57.800,0:17:59.096
Of course I made mistakes.

0:17:59.120,0:18:01.936
The greatest mistake[br]was to sign the application

0:18:01.960,0:18:04.056
for the extension of a loan agreement

0:18:04.080,0:18:05.696
in the end of February.

0:18:05.720,0:18:06.936
I was imagining

0:18:06.960,0:18:09.936
that there was a genuine interest[br]on the side of the creditors

0:18:09.960,0:18:11.216
to find common ground.

0:18:11.240,0:18:12.456
And there wasn't.

0:18:12.480,0:18:15.096
They were simply interested[br]in crushing our government,

0:18:15.120,0:18:16.576
just because they did not want

0:18:16.600,0:18:19.736
to have to deal with[br]the architectural fault lines

0:18:19.760,0:18:21.776
that were running through the Eurozone.

0:18:21.800,0:18:23.616
And because they didn't want to admit

0:18:23.640,0:18:27.256
that for five years they were implementing[br]a catastrophic program in Greece.

0:18:27.280,0:18:30.176
We lost one-third of our nominal GDP.

0:18:30.200,0:18:32.136
This is worse than the Great Depression.

0:18:32.160,0:18:33.416
And no one has come clean

0:18:33.440,0:18:36.376
from the troika of lenders[br]that have been imposing this policy

0:18:36.400,0:18:39.376
to say, "This was a colossal mistake."

0:18:39.400,0:18:40.616
BG: Despite all this,

0:18:40.640,0:18:42.976
and despite the aggressiveness[br]of the discussion,

0:18:43.000,0:18:45.416
you seem to be remaining[br]quite pro-European.

0:18:45.440,0:18:46.656
YV: Absolutely.

0:18:46.680,0:18:50.816
Look, my criticism[br]of the European Union and the Eurozone

0:18:50.840,0:18:54.880
comes from a person[br]who lives and breathes Europe.

0:18:55.680,0:18:59.256
My greatest fear is that[br]the Eurozone will not survive.

0:18:59.280,0:19:00.736
Because if it doesn't,

0:19:00.760,0:19:03.616
the centrifugal forces[br]that will be unleashed

0:19:03.640,0:19:05.336
will be demonic,

0:19:05.360,0:19:07.336
and they will destroy the European Union.

0:19:07.360,0:19:09.776
And that will be catastrophic[br]not just for Europe

0:19:09.800,0:19:11.416
but for the whole global economy.

0:19:11.440,0:19:15.536
We are probably the largest[br]economy in the world.

0:19:15.560,0:19:17.296
And if we allow ourselves

0:19:17.320,0:19:20.136
to fall into a route[br]of the postmodern 1930's,

0:19:20.160,0:19:22.816
which seems to me to be what we are doing,

0:19:22.840,0:19:24.656
then that will be detrimental

0:19:24.680,0:19:28.096
to the future of Europeans[br]and non-Europeans alike.

0:19:28.120,0:19:30.536
BG: We definitely hope[br]you are wrong on that point.

0:19:30.560,0:19:32.256
Yanis, thank you for coming to TED.

0:19:32.280,0:19:33.496
YV: Thank you.

0:19:33.520,0:19:38.343
(Applause)