The interview of “Varoufakis’s shadow”: Deputy Minister of Foreign Affairs, Euclid Tsakalotos

Greek finance minister Varoufakis in Germany
The dream team of Tsakalotos and Varoufakis, ready for action.

Euclid Tsakalotos, Deputy Minister of Foreign Affairs and responsible for the international economic relations of SYRIZA, is one of the key figures in the ongoing negotiations between the Greek government and its partners. A Sussex- and Oxford-trained Economist, he is a Professor at the University of Athens (currently on leave?), and has been a member of SYRIZA for more than ten years (in its earliest form, of course).

Interestingly, Tsakalotos and Yanis Varoufakis, the Greek Finance Minister, have spent a number of years as colleagues in the same department of Economics at the University of Athens. Now, I am not familiar of their personal relationship, but given how closely they have been working since the 25th of January and the election of the SYRIZA-led coalition, it should be quite good. Tsakalotos has accompanied Varoufakis to most (if not all?) meetings with ‘TIFKAT’ (The Institutions Formerly Known as Troika) and Ministers of other Eurozone countries. In a sense, he has been the shadow of Varoufakis for the past 6 weeks, following him reverently and quietly.

This past Sunday, Tsakalotos gave an interview to SYRIZA’s “unofficial” newspaper, Avgi (it translates as “Dawn” in Greek). While the interview is nothing like Varoufakis’s spicy ones, it nevertheless gives a good understanding of someone really high up on the ranks of SYRIZA, other than Varoufakis, who is not a very vocal representative of the hardcore Left platform (albeit a heterodox economist). I believe that Tsakalotos makes some very interesting remarks in the interview, and as such, decided once again to translate the whole thing. Thankfully, it is quite short this time.


The interview of E. Tsakalotos. The agreement that we achieved brings politics back in the equation (Interview given to Foivos Klavdianos. Avgi, 2 March 2015)

Summary: Neither excitement, nor disappointment should be created by the interim agreement, since everything still lies ahead of us, notes Euclid Tsakalotos and believes that time can essentially strengthen the government’s position. He stresses that the government will not stay with arms crossed until the final agreement is made, but will swiftly proceed in moves that have as a target both the development and the content [of the agreement], since the society must constitute the propulsive momentum that will help make the ongoing negotiation successful.

Q. Why does Varoufakis’s letter differ from Hardouvelis’s e-mail? 

Tsakalotos: The e-mail of Hardouvelis contained measures that amounted to 1bn euros from tax increases and pension cuts. Provided that these measures would not succeed, [the former government] would take additional measures, such as the increase of the solidarity levy. It contained the continuation of reforms that were compatible with the neoliberal spirit of the memorandum.

The list submitted by the government does not provide new measures, it ensures the macroeconomic easing via the re-definition of primary surpluses, and consequently, it does not contribute in the continuation of this recessionary course. It also does not accept the TROIKA, and replaces it with the European “institutions” – the Commission, the ECB, and separately the IMF – a fact that provides the new government with the possibility of tactical alliances and greater flexibility compared to the former status quo of monitoring through non-political entities. As such, it brings politics in the equation. 

At the same time, the agreement proposes a series of reforms that are taken to be opposed to those of the Memoranda: the safeguarding of the weak by addressing the humanitarian crisis, the protection of jobs through the restoration of collective agreements, the redistribution of income through a fairer taxation system, and the socially efficient public sector via its restructuring. There are also some things in the list we submitted that do not really satisfy us, especially pertaining to the issue of privatizations. Unfortunately, these emerged as a result of compromises that occurred in an unfavorable political association and in the absence of political time.

In any case, all these constitute a framework that will be mediated politically, which will unfold in practice. This will show what will be implemented, and the way it will be implemented, and we must be ready for a battle with several episodes.

In reality, the only – theoretically – common point of this government with the previous ones is the combatting of tax evasion and corruption. However, it is also well known that the former governments did not have the will to hit on the privileges of the elite. In fact, in many cases, these elites were their last embankment. In this area, as in others, it will be shown whether the government has the ability to transform its policy into concrete measures and actions, and to take advantage of the opportunities given by the new agreement. It is up to us whether or not we can change the example, mobilizing the society and continuously expanding the international solidarity.

Q. How can the Thessaloniki Program be implemented on top of the agreement that exists?

Tsakalotos: The Thessaloniki program was not our ultimate goal, but it constituted the beginning of an applied policy on the basis of the hierarchy of social needs. Therefore, we try to implement it in its entirety, as we have pledged pre-electorally. If we encounter difficulties in its enforcement, we will be forced to make corresponding hierarchies time-wise. The difficulties might either arise from the agreement, or the economic situation that was created by the previous government after November, not only through the revenue shortfall, but also because of the uncertainty that itself promulgated in terms of the liquidity and stability of the banking system.

In this context, addressing the humanitarian crisis will be our absolute priority, and this priority will be covered by all costs, through the lower surpluses, and in any case, by finding the funds from those [people] that have them. As long as it is in our hand, we will not allow people to vegetate any further. The implementation of the remaining announcements at DETH [of Thessaloniki] will take place gradually, without this to mean that it has been lost from the horizon. Let us always have in our minds that we are fighting in order to escape from a status-quo of Memoranda that is not based on paper, but on the suffocating economic conditions and the existing sociopolitical associations, on interests inside and outside of the country. Each choice, then, will carry its risks and its benefits. We try, we evaluate, and we keep going.

Q. Time factor. How does it affect the balance of power between Greece and the proponents of austerity? How will it work in forging the relationship of SYRIZA with the society en-large? At the end of the four-month period, when the time of the most crucial decisions arises, can’t the same setting of pressures be repeated, since we would still have in front of u the repayments of the ECB loans, etc.?

Tsakalotos: As put quite well by Mp. Georgoulas in last Sunday’s “Epochi,” one of the questions that we need to answer is not only where we are going to find the money, but also where are we going to find the time. We operate under much pressure in terms of the cash flows. This was the weapon of our opponents, both domestically and abroad. They sought for us to crack due to the pressure, and this is why the former government did not accept the 6-month extension that was proposed. And it did so, not for the sake of the Greek society, not for the sake of democracy, but for narrow partisan reasons. They wanted, therefore, to entrap us either to accept the 5th assessment of the Memorandum, or to sign into a new Memorandum. We avoided these, and we have achieved the four-month bridge-agreement that does not include any new measures.

The time we have gained can be used in our advantage for four reasons. Firstly, since it will provide us with the ability to assess the actual economic situation of the state. Secondly, since even the most skeptical of people will be persuaded that SYRIZA’s government does not equal to automatic destruction, as New Democracy claimed. Thirdly, because we will be able to exert pressure more actively in creating a pan-European climate against austerity, causing cracks in the dominant narrative. Fourthly, because with the first actions that we will take at a legislative level, we will empower the already heightened feeling of acceptance by society. This is the most important, but also the most fragile part of the dimension “time.” We must not lose the society. On the contrary, it should play the role of our propulsive momentum in order to succeed in the ongoing negotiation. This we can achieve only by having a vision, an honest stance, a coordinated and effective government, and a structured and organized party. If we can manage to maintain the correct lacing between society and government, with the mediation of the party-web – our party is the sensor of social processes, the receiver, the organizer, and the political influence in social affairs – the proper way out of the pressures will be found. It is very difficult for anyone to entrap a determined people who seek to stand on its feet.

Q. What is the plan of the economic team in order to speed up the recovery process of the economy, starting from the first half of the year? As you yourself have warned, how will the danger of a continuous stagnation be avoided, and how will the dynamism of the compressed spring work?

Tsakalotos: There is not doubt that, so far, additional resources for growth have not been secured. Of course, we will continue to negotiate the terms that will ensure a healthy recovery of the economy. The fact that no recessionary measures are expected is a positive sign. The fact that we are moving towards lower primary surpluses is also positive. But we will not remain with our hands tied until the final agreement. Soon, there will be reinforcing actions, such as the regulations for the red loans and the arrears. The remediation of a system of soaring debts can only act positively in stimulating the economy.

Of course, the previous governments too stressed the need for growth. We, however, have different criteria, different principles in defining growth. Growth, under our own measures, will be accompanied with job openings, with an improvement of the position of the people who work, with a new model of productive reconstruction. We seek the economic growth that will function for the benefit of the many, and not for the benefit of the already favored up to now.

Many now recognize that there must be an end to austerity, that through recessionary policies and mass unemployment the structural changes cannot be successful. We must, however, move also to the next – more difficult – level in terms of the content of the changes. Economic reforms cannot be solely based – or mainly, I would say – in the liberalizations and the deregulations. On the contrary, there need to be new growth-inducing tools, new social and productive entities for a new model to emerge, where growth and sharing of the pie go together, and where its increase does not precede its distribution.

Q. You took active part in a very difficult negotiation. How would you summarize your experience to one of your normal Comrades?

Tsakalotos: The talks up to now have showed the tough face of our lenders. This was expected. I will not hide from you that this it is very depressing – especially for an academic that moved into politics – to see that arguments are often not met with arguments, but by them saying that they do not care about arguments, telling us that “rules are rules.” Therefore, our resistance to the core of this neoliberal policy has caused reactions. There were, however, also cracks within Europe. Cracks that deepen the more the Greek problem becomes highlighted, and the more the European debt crisis is escalating. Cracks that deepen as a result of the necessity that Europe must address the problem it pretends doesn’t exist, but knows that requires a solution.

The support from the people we meet, not only in Greece, but in all other countries, shows that we should not back down, at least in the predominant things. Nobody should be happy with the agreement thus far, but nobody should be disappointed either. We are at a point where everything is ahead of us. Mistakes will be happening, reversals might potentially happen, but each time we will have the maturity to judge, to assess, to anticipate, to plan, to unite, and to inspire. We are getting judged as the Left example for an alternative organizational model of the society. In defeat, we will not be the only ones to lose – an entire society and an entire people will be invaded as well. A people who has stopped being scared after decades. The Left has no right to be scared anymore.

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