Panama Papers: Debate with Yanis Varoufakis

joining me now to discuss this other former greek Finance Minister Yanis varoufakis Conservative MP Jesse Norman Diane Abbott the shadow international development secretary and Alexander Nekrasov a former Kremlin adviser Jesse Norman does any of this remotely surprised you tragically no not really it's been widely I think it's been a source of concern for many people who thought about the way in which capitalism's developed globalisation developed over the last few years that there would be large amounts of money sloshing around the international system and what this does is to Scherer is to share a fairly pitiless light on where some of it's being deployed you've written about it the Prime Minister said he's going to do something about it and more money is going to be given to HMRC but it's perfectly obvious that this does not get any smaller with the parkus passing of the years it gets worse well of course it's possible and what I think's actually happened is that the government actually quite a lot about it which is not action the moment getting the credit that's perhaps due it's past the Bribery Act which is the most stringent act of its kind in 2010 it's passed a general anti-avoidance room for taxation it's done a lot of work on preventing you know whether an idea that's not going to stop people evading or void no no absolutely not the reason for that is because the way in which the financial economy is expanded has dwarfed the effects of nation-states to control it and therefore what you need is international agreements and much better enforcement Diane Abbott are we going to get anywhere on this well not on the basis that David Cameron is still saying he doesn't think it's fair to call these overseas dependencies tax havens what else are they but Jesse's talking about this happened under labour why I know that gather shut down all the 13 sovereigns and we have sovereignty over 30 measures tariffs nothing you know we didn't do I'm not going to sit here and defend them but Jesse's talking about this as if it's an abstraction as if it's bits in this activity one of the consequences of this tax evasion is hundreds of billions of dollars flow out of some of the poorest consciousness in the world because of the tax evasion the tax avoidance and rigged tax treaties people suffer because we know that what we don't know is why you politicians weren't do anything about it because I think in the past it's not literature of our current leader before in all of financial services that ever people that make the money to this why are the four big for accountants based where Panama and British Virgin Islands because as lots of people want accountants there no because there's a centers a tax of it a tax evasion and tax avoidance well what do you make of this because obviously the fingers pointing at mr. Putin tonight and he's got a great number of colleagues around him that are named in these papers well I'm surprised that Putin actually came up because his name is not mentioned in any documents and to say that he has friends who have offshore accounts well doesn't really mean anything concerning Putin but I must tell you something I had I'm probably one of the first Russian businessman in Britain in the 90s and our Russian businessman were finding out about offshore accounts in the night end of the 90s while your Lord has been polishing its offshore skills for other hundred and fifty years so to say that the Russians are misusing offshore accounts when obviously here in Britain and and other Western countries is that part of the deal another thing I think that people miss is that if you make your money in the private sector you can minimize your tax liabilities by having an offshore account but if you are connected to the budget to the taxpayers money or if you're a criminal that's criminal so we have to distinguish who is the criminal and who is not you think that when we scratch the surface of Panama it'll all be legal well III don't think it'd all be legal because Panama is an old territory controlled by the CIA very closely I don't understand who actually opens offshore accounts in Panama I mean it's like going to Langley and say would you keep my money here it might be legal but it's still wrong and the fundamental problem is a lack of transparency and Cameron has not done enough to force these tax havens to be transparent about who are the beneficial owner of all this money Yanis I mean in the old days we used to look at Greeks and the ship owners and the rest of it who paid no tax and we used to think Greece was the capital of tax evasion and avoidance how are you viewing it tonight well firstly I'm exceptionally pleased that there are many of those who have enjoyed not so much tax evasion but toxemia who are having sleepless nights it was a wonderful whiff of transparency even though it may be short-lived fills me with joy but at the same time physically worried that we are focusing too much on fake sense of surprise the only thing that surprises that we get surprised by this and we also zoom too much into Panama the idea of some small island in the Caribbean when here in the middle of Europe we have a beggar-thy-neighbor policy of taxation states like island indeed London are competing unfairly with other parts of Europe we try to steal economic value from one another by offering the those with ill-gotten gains the opportunity to launder their money in London we have a president of the European Commission who's running attacks even in the center of Europe and it is important by Luxembourg of course but you see that the problem is London is so big so important in this whole financial services leaves quite a bit of used quite a bit which is very questionable it's an epidemic he's actually big too big not to have a relationship with and until you complain that Europe is he sort of fosters all this but they have no choice but I can't Britain as part of Europe don't you um well you see because we're not members of the euro and that's the because like you members of the European Union and you're as one with us in this race to the bottom in the beggar-thy-neighbor policies on tax it's about time with harmonized taxes especially if we want to have a single market well I do think there's something to be said for that it's also true that competition attacks can be beneficial because it can force governments to offer cost-effective tax terms to companies and that's not necessarily a bad thing you don't want a situation in which text is harmonized at a very high level you want to give competition might be beneficial there I think we really I think he had a couple of pops turn just on a person did you just allow us finish this party's finish the point before you interrupt you've had a couple of good on the party political side but the fact the matter is that when the oligarchs of Russia was starting to repatriate their money in the 1990s the Labour government did virtually nothing to prevent that from happening it did not set any norms or control Peter Mandelson was famously intensely relaxed I people getting filthy rich the tax cap got very large the tax cops are steadily smaller the amount of taxes collected always the hard calculation to make has got steadily smaller does it need to go further absolutely one of the things okay let's just get clear this part of a little pointer because it's basically made the point I tried to make you earlier which is none of the parties that have ever been in power in our lifetime anyways ever done anything about this unfortunately too many people in the British political establishment have been in all financial services what jesse calls cost-effective taxation comes at a price and the price is paid by ordinary people and people in the global south who are losing all this money to tax avoidance but you see that there's another point here a lot of people don't like the way government's spend taxpayers money a lot of this money is spent on wars on vanity projects it's wasted so there is a certain protest in this all of this because people are saying why should I give that money aleksander with resumes with respect with respect surely what what a lot of people worry about is what did the Russians do in the 1990s when they started shipping these vast quantities of what belonged to Russia out of the country into the sea I'll tell you what thereby perverting much I was going on in I witnessed that the problem was that Western bankers and big consultancies came to Russia and said to these oligarchs you know what you can hide your money in the West and they helped them to do that banks closed them the ice Western banks oh please how dare you move Jesse I think this is a high degree of truth about I like high degree why not just say it's true because it's always so a more complex fiction as described it's not just about the banks they were undoubtedly bidding for custom from that pot of gold so what about the regulation regulation was very sloppy and weak at the time and that's a government responsibility but it's a shared now is there's a shared responsibility good sorry you know the notion that since 2008 2009 we have really strengthened the regulation is other vak use we have done nothing more than cosmetic changes not to hide the reality that the political system in throught Europe not just in Britain this is not a party political party has utterly miserably failed to do to deal with the situation and there's nobody you meet that doesn't believe the crisis will dawn again and we'll have another crash and part of it is about the whole failure to regulate what's coming into London what's coming into this country I think there's a lot of truth in that I you know have been very prominent in pushing for your readiness train so on and crony capitalism and this is a form of cranial cavity it's not just about tax evasion so what's about money laundering so it's about corruption but you only know the Treasury select committee what happened there did they ever talk about it well if you noticed what's happened in the last few years we've had a completely regulation of the City of London the Prime Minister's actually I think worked very well and hard to get this up the international agenda it was the first thing on the agenda of the summit in 2013 tax and transparency but there is a lack of international consensus and that does limit the extent to which government of any kind can make a difference very very important point the russians invest money into britain because it's not in the euro you must understand that you are a victim of your own success if you were in the euro zone you would see nothing on it that's the point and yannis should think about that last one we don't need international cooperation to regulate our own overseas terraces and Crown Dependencies and that's where Cameron is so wrong he could have done so much more about transparency I got to thank you all for very warm indeed for coming in and well Yanis will be back with us with Jesse more Norman later in the program when we pick over what is wrong with Europe and how can it be solved well Europe isn't just struggling to deal with migration the region is facing the risk of yet more debt crises the rise of the far-right the chance of brexit and with it the breakup of the EU itself and crucially our Europe's leaders even able to cope just some of the issues raised by a former greek Finance Minister Yanis varoufakis in his new book and the weak suffer what they must is its title he joins us again along with the Conservative MP Jesse Norman his book addresses compassionate conservatism what it is why we needed Janos Farah Park is the migration crisis now today of course no Syrian refugees left they were mainly Pakistani and people not from that particular conflict but do you justify what's happening well the problem with this European Union fudge Oh Agreement call it what you might is that firstly it's inefficient secondly it's illegal it violates basic principles of the United Nations of international law we don't have the right to deport refugees or people who are seeking refuge without processing without looking at their cases finding out and especially not to deport them to a country that has not subscribed to basic international law on refugees and human rights where does this fit into your extraordinary and and revealing I think deconstruction of exactly what is wrong with Europe the refugee crisis and the migration crisis came to sit on top of an economic collapse and economic disintegration which is the result of the hubris of past decades when we try to create an economic system that was simply not fit to purpose it was not never designed to sustain the the shock waves of the earthquake of 2008 from 2008 onwards there's been a comedy of errors every time the European Union great leaders meet in Council meetings in Euro group meetings icon fing meetings one error follows the other and the only thing that really concentrates the mind of our leaders is how can they be in denial how can they pretend that the rules which are cannot be enforced are being enforced so there is always terrible economic outcomes which have created centrifugal forces within Europe we see toxic political powers gained prominence we see the Greeks hating the the Germans the Germans hating the Greeks everybody hating the French the British wanting to leave this is the result of a post more than 1930s kind of disintegration and then you add the refugees on top of that and what could be a manageable problem is becoming unmanageable and leads to this kind of organised misanthropy well that that takes us to another thing they're basically the project failed this aspect of it anything is really doubt that the combination of the eurozone crisis and the tremendous catastrophe of the center of the European economy has pushed the capacity of governments to bear and the European Commission to manage events to the limit and to have this on top has pushed it beyond and that's why we're seeing so much difficulty going on on both sides I think what's so interesting is that you know they had the opportunity in some respects to crack the Greek issue when the analyst was the Minister of Finance and they're backed off and that I think it was a crucial moment because it now feels to me and has done for a year or so that the results and you must comment on this Genesis is going to be another bailout of Greece another round of extend and pretend and I just wonder if that's really doable and whether or not when it the whole thing comes down if it does come down it won't bring down not just the Greek economy but the eurozone and possibly a large chunk of the German economy but but I think there the other point that you make is that actually if we left let's forget Greece from him if Britain left it would so profoundly change Europe that it might himself implode well Greece is the canary in the mine it's not responsible for the methane gas explosion but it is a early warning and it should be used as an early warning system instead Europe is in denial of the problem that Greece manifests just manifests on the question of Britain I think that the great error that both sides in this referendum debate make is they assume the European Union is something out there a constant a given and then the question that the British public is asked to decide upon is whether you want to be part of it or not it's not so the European Union is an evolving enterprise and a disintegrating one breaks it would profoundly affect this disintegration process I think it will accelerate it and simply by hiding behind reconstituted sovereignty here in Britain you're not going to be able to escape this vortex which will be great the center of the continent if let's say the Euro splits the European Union disintegrates completely as a result of BRICS it breaks it speeds it up you're going to end up with huge dividing lining you barely wall this time between France and Germany running down the Rhine and across the Alps the germanic lands anything east of the Rhine are going to become deflationary because of the new deutsche mark that will appreciate the rest of Europe is going to be stagflation airy with a combination of high inflation and hybrid where do you think that Britain is going to be an affected by this that you'll be able to sail across the Atlantic into some wonderful alliance with United which casein to be dragged into this both of you critics of the great enterprise what wants to be done about it because your fundamental issue of the fundamental in this book is that actually the structures of Europe just don't work yes but the difficulties been that as Janice is eloquently pointed out at every moment when the canary has been singing about the methane gas it's about to engulf the whole thing people have just ignored it and therefore have failed to deal with it and I suppose one of the things that people who support brexit as you know I've been scrupulously neutral on this issue because I'm looking after my constituents I'm first neutral I've met well that's because I think my constituents deserve impartial advice and information but um I still have to cast a vote in it and that's a private matter for me thank you John but I'll leave that to my constituents um the question is not that the question is how we as a country can whether or not breaks it is itself then the action that forces the eurozone and the other European countries to take a group of the situation that's the other way of thinking about it it'll be catastrophic for us how can promote yes and no to Britain but if there's great agitation true water what would you have to see to make this thing work make Europe work well the first thing that we need is a large dose of transparency in Brussels I have a very simple view we agreed on that were friend if we livestream European Union Council meetings just just don't kill their cameras or connect them to the internet so that people can actually see what David Cameron argues on their behalf what tsipras Merkel Orland argue on behalf of their people do you know what difference that will make I haven't have I've had this traumatic experience for five months Europe's I can assure you John Jessie that if you could see live what was going on in there the conversations would become far more rational and the outcomes would be far better for everyone so that's just one step the second thing we need we need some seriously thing of economic policy the level of the European Central Bank we need more and better coordination between the central bank of Europe and the Bank of England we need to have an investment bank like the European Investment Bank having branches here in Britain with quantitative easing that purchases investment bank bonds that go straight into new technologies in Britain in France in Greece and so on too crowded in private investments we need to rethink the way in which we manage welfare social welfare throughout Europe without any federal moves just in order to increase the sovereign or national barrels by we are specifies a yes/no question yes if you were British would you vote to stay or to leave to stay in order to fight brussels from within which is which do you think there will be another bailout of Greece as matters presently stand there is every every second month or is what happens when you have an unsustainable debt you need more unsustainable debt to pretend that this the previous debt which is very practical will never close this tab but thank you very much new coming up Jesse Norman too you

Channel: Channel 4 News

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Length: 19min 3sec (1143 seconds)

Published: Mon Apr 04 2016

Reddit Comments

[u/unsilviu]

Every time I hear Varoufakis speak, I can't help but think how things would be different if he had real authority in EU matters. One of the few people who actually have concrete, well argued ideas for change, rather than the vague suggestions and promises politicians throw around.

[u/HashPram]

That was easily the best thing I've heard on the EU question so far.

Why aren't our lead politicians talking like this?

Are they scared of discussing this matter with that degree of candour? And if so why are they allowing that fear to prevent them from doing it anyway?

This is the kind of debate that's missing from UK politics.

And now all the grandstanding and posh mooing at PMQs just irritates me more. It's like going from a library full of earnest academics into a primary school classroom full of kids hyped up on sugar.