The Greek economist urged people to take a stand against the bloc’s propaganda around the currency which was established in 1992 under the Maastricht Treaty. He said the euro has failed to live up to its architects’ goals of strengthening trade, mitigating potential financial crises, converging living standards, increasing price stability and align productivity growth rates between countries.
His remarks came after the EU celebrated the 20th anniversary of the euro, which is used by more than 340 million people in 19 member states.
Mr Varoufakis, in a column for Project Syndicate, part of which is published on the Greek website News 24/7, criticized a letter signed by eurozone finance ministers which hailed the bloc’s “common currency” as a symbol of the unity that underpins the EU.
He writes: “Without the slightest reference to the monstrous euro crisis! It’s as if, all these years, we were living on another planet!”
“We all have an obligation to take a stand against this…regime propaganda.”
Greece led a group of countries unable to pay their national debts during the eurozone crisis triggered by investor fears over sovereign debt following the 2008 financial crisis.
Athens was bailed out by the EU and the International Monetary Fund until 2018, when Greece relied on the financial market to meet its needs.
Government sources told Reuters in November that the country planned to borrow £8-10 billion (€10-12 billion) this year by issuing short and long-term debt as well as its first-ever green bond.
Mr Varoufakis, a former academic who served as Greece’s finance minister, said none of the promises regarding the euro had been kept, adding that “maximum” convergence had been achieved between wealthy countries like the EU. Germany and EU countries that had not adopted the currency.
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General secretary of MeRA25, a left-wing political party he founded in 2018, Varoufakis singled out Sweden-Norway, the United States-Canada and Australia-New Zealand as countries that have converged economically in making huge investments and trade.
He said: “These countries converged the most because they avoided monetary unification.”
To explain why, he compared inflation which he described as being “more or less” the same in Australia and New Zealand, the United States and Canada as well as Sweden and Norway.
He said: “And yet: their exchange rates, at the same time, fluctuated explosively. However, it was these fluctuations that acted as shock absorbers in times of crisis, dampening vibrations, as a result of which they remain on a convergence path.
“The same thing happened between Poland and Germany: when the euro was created, the Polish zloty depreciated by 27%. After 2004, it appreciated by 50% and, with the crash of 2008, it again depreciated by 30%.
“The result: Poland avoided both [Greece’s] period of false development (2001-07) and the great collapse (2010) and therefore converged more with the German economy.”
Mr Varoufakis concluded that Greece needed a new national currency to be freed from consolidating its debts thanks to measures such as the 15% VAT and an energy exchange that rewards the oligarchs.