Yanis Varoufakis | The Euro Has Never Been More Problematic | Oxford Union

[Music] it's so wonderful to be back at the Oxford Union thank you so much for the invitation thank you for being here well on the day when your Prime Minister is struggling to beat her cabinet into submission and to force them to acquiesce to what I've termed back in 2016 the most likely outcome of his brexit process the Hotel California doctrine where according to the last verse of the song you're too young to remember the Eagles own but let me remind you what the last verse was you can check out anytime you like but you can never leave well it may seem impertinent on a day like this to be talking about the euro and to be putting forward the proposition in sharp contrast to what mr. dubrovsky said in this chamber a few weeks ago that the euro has never been more problematic now I will also try to convince you that the question of the year is not as separate from that of brexit as it may seem but let me begin at the beginning with mr. de bras gives three main points I don't know how many of you were here to listen to him I wasn't I read his remarks the three points he made was that firstly Europeans who live in labor under the euro are better off as a result of the year the second point he made was that the euro was actually a very useful and helpful instrument for Europeans during the European crisis and thirdly that it is a success story that it is stronger than ever well my first task tonight is to counter every single one of those myths I shall argue that the euro was not Oh has not only not made the Europeans better off but it has inflicted a historic defeat upon European capitalism secondly that rather than proving helpful in the crisis that followed 2008 but the euro has done the euros architectural design amplified massively that tsunami that hits the continent of Europe initially from Wall Street through the City of London with the financial sector collapse and consequently led to the current political disintegration the disintegration of the political center whose only true beneficiaries are racist xenophobic ultra right-wingers that are coalescing now in a dystopian front which is a clear and present danger for civilization in Europe these are strong claims before supporting them let me point out a very interesting one might even call it a delicious paradox one may say well if you write Yanis that the euro has never been more problematic why to the money markets value the euro so highly compared to the pound do you know American dollar and so on well allow me to point out that there is no paradox here suppose you are a Singaporean Chinese American or indeed a German investor we have money yeah and for some reason you agree with me that the fragmentation of the eurozone is at an advanced stage and the euro has never been weaker or more problematic should you sell your euros no let me share a secret with you as to what you should do you should shift your euros to a German bank account why because if the euro breaks up how will it break up it will break up because Greece leaves the euro it won't break up because Italy leaves the euro the Euro will break up if it breaks up I'm not wishing that it does mind you I'm simply describing the future as I see it the way it will happen is Germany we live the euro once the Berlin political class has had enough of the riffraff you know us Greeks the Italians the French the Portuguese and so on the moment they start sniffing in the wind the possibility that they may have to bail out 2.7 trillion years of Italian debt believe you me the Buddhist Bank already has plans in the drawer for printing Deutsche marks now what will happen then immediately all German accounts will be the Donna Rida nominated from euros to Dutch bank immediately because Germany has a gigantic current that account surplus the Deutsche ba is going to go through the roof so if you happen to have euros in Deutsche Bank finance Bank in Frankfurt they will appreciate you are going to get a magnificent windfall so can you see how the paradox dissolves the nearer were getting to any potential fragmentation of the euro they higher the value of the German era of euros in Germany of course what will happen is euros will be shifted from Italian bank accounts to German bank accounts by the way do you know this is already happening we have about 200 billion in the last 18 months 200 billion that has shifted from Italian bank accounts to German bank accounts because of the risk of keeping your euros in a country that after the breakout the breakup of the euro zone will see its currency lit denominated downwards not upwards so therefore the fact that the euro is a strong currency it's a little bit you know back in the 1950s there was a magnificent Jaguars the cars I mean that way extremely strong cars extremely strong cars but if you had an accident in one of them you ended up dead the car didn't bend much did not crumble had no crumble zones it would be intact you'd be dead that's the euro for you the stronger it is the weaker the population labor and living under it the way that it has been designed now let me say move to the to to the second issue actually I won't move to the second issue I'm just going to table a question and then come back to it a bit later the second question is what if I'm right how can it be that smart bureaucrats people in the European Commission European Central Bank cannot see that and only I can see the truth leave this question in abeyance I'll come back to it my argument is that they of course they can see it the smart ones but you'll see why the design of the eurozone makes no difference as to whether they can see it or not now time some facts for some facts you heard the story that the euro eliminate the transaction costs some much much easier going from one country to the other that is of course true let me ask you a question if transaction costs were so important why is it that there is no monetary union between Australia and New Zealand why did have separate currencies why do they pay fees for transacting when they move into Korea from from Sydney to Christchurch why has there been no monetary union between no when Sweden such similar countries their next door to each other they trade a lot with one another why don't they create a monetary union what does in Canada unite monetarily with the United States most of Canada Strait is with the United States there's I can't tell the difference between American and Canadian accents I know you can but these would be the obvious monetary unions the answer is that transaction costs are not important what matters is convergence of economies investment the way that supply chains are linked together and let me say that from that perspective the euro has not just been a failure it has been pointless allow me to compare and contrast two different countries the Czech Republic and my country the Czech Republic is in the EU but not in the eurozone Greece is in both in 1995 the Czech Republic's per capita Li per capita income was 18% of that of Germany 1995 in Greece it was 48 percent Greek per capita income in 1995 was 48 percent of German per capita what is it today the Czech Republic's per capita income is 48 percent of German per capita it can and the Greek one has gone down to 41 percent so it really didn't matter that the Czech Republic did not have the Europe and Greece did indeed if you look at the converges real economic convergence and convergence in prosperity within the eurozone we had divergence the opposite of convergence whereas between countries like Hungary Poland and the Czech Republic that did not have the euro and the rest of rich eurozone of the rich part of the euro zone like the Netherlands Austria and Germany you have converges so the euro was pointless from the perspective of economic integration bringing peoples together in terms of production in terms of consumption and in terms of prosperity but it was worse than pointless it was truly destructive I'm not saying this as the former finance minister of a bankrupt country I'm only saying this as a European consider this anyone who borrowed in 2008 anyone who borrowed in dollars to invest in Wall Street made by today from 2008 you today about 51% so for if you borrowed $100 and you invested it on average in Wall Street you end up today with 151 if you did this the same thing in South Korea you would break even if you invested $100 in Frankfurt or Paris European equities you would have lost 1/3 so there was a lot of wealth destruction it is not just a question of inequity within the eurozone it is also that the euro has created circumstances that destroyed a lot of wealth of a lot of rich people as well so it was both iniquitous and inefficient let me give you another example take Germany Germany is the greatest beneficiary of the euro zone between 2000 when the Europe began and now because effectively the euro is another form of the deutsche mark let's not fool ourselves the fact that the riffraff of Europe was part of the euro of the deutsche mark but it was our currency the kinds of Italians you know the Mediterraneans the grasshoppers of Europe it kept the value of the currency low and that was a great boon to German exporters so I just read the back of the envelope calculation calculation on the train here the total net export surplus of German industry between 2000 and 2018 was 2.2 trillion 2.23 2.2 trillion euros not bad now what do you do if you are constantly in surplus with somebody else if I'm constantly in service with you it means I keep selling more stuff to you but if I keep selling more stuff to you then I end up with your money and I don't have any thing to do with that money so the result was that there was a lake of euros accumulating in the banks of Frankfurt and you know the worst nightmare of a banker instead of money that they are not lending they don't sleep at night if they have money and they are sitting on it and there is not enough demand full of mine so what do they end up doing lending it to the Greeks lending into the Irish because why think about it Greece what did Greece and Ireland and Portugal bring into the eurozone they did not bring the fantastic cars we don't produce cars okay what what were pretty producing some oranges apples some olive oil but we brought one amazing asset into the eurozone 92% of houses were owned by the residents we didn't have mortgages we didn't have credit cards we're two really low levels of debt I know it sounds strange but the greatest asset that Greece brought into the eurozone was low levels of debt and collateral you know we had low incomes we were unproductive was like corrupt we were all those things but we owned the homes and we did not oh my you know what we were we were the Apple in the eye of German bankers a banker looks at you you do not owe money to anyone you own your own home and you're thirsty for washing machines German cars imports you are a wet dream for the German so what do they do they lend you and suddenly everything's fantastic from 2000 to 2008 the eurozone resembled a majestic riverboat that was launched on to a calm steel ocean it looked splendid because it was a riverboat was not an ocean faring vessel the moment we had the first crisis the first storm he started sinking why because the money that was lent by the German and the French banks but mainly the German banks to the periphery take Ireland for instance remember the huge bubbles which are now repeating themselves by the way that's another story they created a fantasy the delusion of prosperity people were getting credit cards I'm gonna I was receiving in Greece credit cards that had not applied for now seriously no I'm not I'm not joking there was a deluge of credit cards that people were receiving the mail all you had to do was to sign it and start spending and we had to tell you them up and burn them but some people use them so that created demand for imports everybody was happy it was vendor finance it's like me going into a car dealer a Ferrari car dealer saying I were the car and I want the money to bite and they were giving you so suddenly you know lots of sales so Ferrari cars I mean is worse than Ferrari cars was Porsches you know Greece had the highest percentage of poor SEC four-wheel drives in Europe it was not the oranges but purchase it was loans from German banks and nobody forced him to give it to us now I'm not blaming them I mean I'm blaming the Greeks for every irresponsible borrower ladies and gentlemen there is an irresponsible lender but this is a structure of a mana monetary union when that lacks the federal treasury what happens is there is a period of exuberant growth both in the surplus in the deficit countries during that period gigantic bubbles are being built in the economies of the deficit countries and in the banking sectors of the surface countries and then something happens usually in Wall Street 1929 2008 the bubbles burst and then it's catastrophe we had that in Europe and Britain was part of that it was called the gold standard fixed exchange rates a currency union during the mid war period and John Maynard Keynes wrote a fantastic piece the economic consequences of mr. Churchill who was then the Chancellor of the Exchequer that brought Britain back into the Euro of the time the gold standard there is out being that Britain suffered massive recession as a result of that and then after 1929 thankfully you got out of it in 1931 by cutting the peg now the problem however is there is no peg to cut in the eurozone because we didn't keep our currencies we didn't just have fixed exchange rates in the mid war period you had a pound the French to the franc the Americans had the dollar and you just had fixed exchange rates and that was just a matter of an overnight decision by government to sever but we have the year everywhere and we have this remarkable situation where in our infinite wisdom this is an ironic phrase just in case we didn't get it we created think about you only have to state it to realize how observe the situation with the eurozone we created a central bank the largest central bank in the world in terms of the size of the economy that it handles the European economies the largest calm the world bigger than America bigger the China so we have a megalith of a central bank without a Treasury to have its back and we have 19 Treasuries that have to bail out national banking systems without the help of a trade a central bank why because the central bank of Europe was designed never to bail out the riff Raff's banks and States the italian ones the Greek ones own so the rule was the central bank does not print money even during moments of emergency in order to sustain the monetary union that we've created so think about it in 2008 when the bottom fell out of the eurozone the Fed the central bank of the United States of America started printing money as if there's no tomorrow to refloat the banking system the Bank of England was doing the same the Bank of Japan was doing the same the Bank of China the Chinese government did the most magnificent operation in salvaging global capitalism by boosting the rate of investment from 33% to 51 percent of GDP and this is what together with the Fed and the Bank of England kept capitalism alive let's be clear on this and what did Europe do they shifted the gigantic losses of the idiotic banks onto the shoulders of the taxpayers it's called austerity George Osborne and I had disagreements he believed in expansionary contraction that is expansionary monetary policy printing money to help the financial sector recover while at the same time doing some austerity which was a major error on behalf of Osborne but nevertheless that's another issue today we can have another debate on but at least it was the expansion apart and it contraction apart George thought this was a good mix wasn't what he thought was a good mix we can disagree about this but what we cannot disagree is that what the European Central Bank was doing was a crime against logic they were doing contractionary contraction in the middle of the worst crisis of capitalism they were shrinking the money supply and doing austerity shifting all the pain that the banks had created through their idiotic bets especially bets that they were taking out in the United States with dollars they were borrowing from Wall Street and they shifted all this pain onto the Greek taxpayers the Latvian taxpayers the german taxpayers now this is what you do if you want to poison the politics and the democracy of Europe and this is exactly what it's done now what has changed since then Europe continental Europe the euro zone has affected a number of changes each and every one of them is the minimum that was necessary in order to keep the Euro alive while at the same time maximizing that this content on the ground and the discontent not just Adam Greek the Greeks and the Portuguese and the Irish but of the Germans do you know that as we speak today 40 year olds in Germany are experiencing the worst level of inequality in the last 25 years do you know that half of the population of Germany today is worse off than they were 15 years ago and that is something that we really must note because Germany is swimming in money it's not grace okay we are goners but Germany has what you had two point two trillion surplus Canada can service it has copper corporations that are saving huge quantities of money they are in surplus families that are saving and the federal government that is in surplus they are in suppose so everybody's in surplus and yet 50 percent of the population are worse off today than they were 15 years ago why well it's really very simple ladies and gentlemen to be an economist to understand that if everybody's in surplus who isn't deficit because my service is delivered I cannot have a surplus without somebody owning a deficit the answer is of course they are exporting the capital to foreigners they are entrusting the savings of the German people and German industry huh to foreigners while within Germany because they're doing this there is the lowest level of investment since 1946 as compared in proportion of the savings and the liquidity available so the point I'm making again I made it before I will repeat it once again is that the euro has been a devilish design a design that was it was a little bit ok let's not be too scientific it's too late in the day it's my third speech today so it's a bit like removing the shock absorbers from your car and driving it into a pothole what do you expect will happen now and this is the time to return to the question that are left in abeyance before remember the question how can smart people not know that they do know it ladies and gentlemen this is my list by design this is designer idiocy why am I saying that well Francois Mitterrand very smart man understood very well that the monetary union that we now have in Europe is not sustainable he understood it the question is why did he do it the answer he gave in a private conversation with a very close friend of mine who used to be a member of parliament here in Britain was this I do not have speaking imperially you know like French presidents do I do not have the power the authority to bring about a federation but I can bring about with Helmut I would call the Chancellor of Germany at the time I can bring about a monetary union that is going to create a massive strike crisis and then the people who that will succeed us will have no alternative but to create the Federation but he was precisely wrong where he was wrong was that yes the currency union would create a gigantic crisis dissolving this monetary union would be extremely painful for everyone independent of whether you agree with the Euro or not and I make no bones about it it would be catastrophic for all of us even for people of Britain because you are too close to the the continent of Europe whether you are in via or not but the crisis that the monetary union is capable of producing poisons democracy if you go now to Germany if you go to Italy if you go to France even to Greece and you say to people of which I say because I believe in it what we need is a federal solution we need more of the same way more younger more merkel go away and they jump on the bandwagon of the disintegration list and in particular the disintegration is that offer them the simple answers that always flourish during periods of deflation it is the Jews fault the Syrians fault the Greeks fault the germans fault everybody agrees it's the French who are to blame okay these lazy answers always flourish during periods of defect deflation ladies and gentlemen was always going to be the result of this particular design of the euro and deflation baguettes monsters it was boo Cellini it was Hitler now it is salvini quartz zir Hoffer lepen all those people that Steve Bannon is organizing and putting together in a fascist International and this is something you should have in mind here when you welcome him to this chamber and I hope that you challenge him on this before we move to questions let me say that the URIs design is one thing but the politics should be another we are not playthings of historical forces beyond our control we have the power unlike molecules and unlike DNA through the power of reason and through dialogue in fora like this one to change the world we live in to change the institutions but for this we need democracy for this we need dialogue unfortunately the URIs design has created a vicious cycle between failed institutions that create failed policies that lead to this content and then the only way the powers-that-be in Brussels can clamp down and continue to impose their authority is through increasing degrees of authoritarianism so failed policies breed authoritarianism authoritarianism maintains faith policies those failed policies lead to even more authoritarianism which can either take the form of the Sylvanus the strongmen there are bands that want to effectively take us back to the 1930s all it takes the form of mr. doe broths gives because let me tell you I am here today I was invited by the good people of the Oxford Union during the summer it was maybe early summer to be here a few weeks ago to argue against mr. Dombrowski's but when mr. Dobrev skis office found out that I am going to be the one that opposes him he demanded of the cool people of the Oxford Union that I should be and I was disinvited it was not one of the union's finest hours that they disinvited me even though I appreciate the offer for me to come a few weeks later but it is a disservice to you that you didn't have with the Dabrowski's and me fighting this good strong in front of you so that he would have the right to reply to what I'm saying the quality of our democracy is of the utmost importance we must maintain dialogue I am NOT one of those who believe in not giving a platform to opponents however vile they might be but I am NOT going to accept what I am ladies and gentlemen I believe that the rift between levers and remainders in this country is the result of the ill-fated design of the euro if the euro had not been designed the way it was there would be no brexit now but it was designed that way and brexit triumphed in June of 2016 I fought against brick sir nobody can accuse me of being a lackey of Brussels but I hope it's a mistake at the same time I think that the idea that there is something called the people's vote is offensive to those who were voted for leave in the first referendum as if they were not people I believe that this rift has to be healed in this country I don't believe that mrs. Mae is capable of doing it but I think that the next generation and that is you have a golden opportunity and a moral duty to go ahead with this healing it is essential that we on the continent in you in prison independently of what happens with brexit maintain a commitment to uniting together as Democrats to deal with the four crises that are tearing our societies apart the private debt of too low investment in green technologies that will be the technologies that save our jobs in the future and the planet anti-poverty Drive and public debt these are like climate change you cannot solve these problems in Britain alone we cannot do it in Europe in Greece in France we need to do it together it doesn't matter whether we maintain this EU will change the you what kind of breaks it we need to coordinate along those lines and we must unite to fight the rising nationalist international that mr. Bannon utilizing the divisions in Europe caused by the European Union's terrible design is coming here because mr. Trump and mr. bannon care about one thing they want a divided reactionary Europe as being instrumental to their plans for the United States visa via the rest of the world and let me finish with an aside which is I think pertinent to the point I was making about the authoritarianism of the European Union and they are trying to escape giant dialog some time ago I was invited to another debate with a certain mr. Steve Bannon in Ireland he agree he agreed I agreed and then he pulled out so the honest isn't on you to challenge him whenever it is that he's coming to this fine chamber thank you very much thank you very much and I think that aside at the end is good advice myself and everyone else in this room as we considered events on Friday I want to begin by asking about the political impetus you mentioned crisis ranging from personal to national debt or climate change at a time in which seems that the left and a particular population is reasserting national identity how are you optimistic that your movement can bring about a European identity that encourages European solutions these problems my only source of optimism is when I talk to people it's not the media it's not opinion polls it's dialogue with people on the street in chambers like this across Europe so our democracy in Europe movement the m25 is mobilizing everywhere wherever we go we find the contradictions of today's world we have the best and the worst we have people even the worst are okay most people who support for cystic parties they're not fascists they are just angry they feel disenfranchised they feel like cattle whose market value has tanked and who are being treated as such by the establishment I think that it the the progressives the so-called you know Liberal Democratic establishment its so-called they are neither liberal nor democratic they are making a crucial error in demonizing those people so look at you know the hardcore remainders the way they demonize BRICS it is the column racist the column lists that Ania in the United States you have the ridiculous situation where the Democratic Party is going to the people who voted for Trump and saying you were duped by Putin Putin stole the election through Facebook my goodness I mean what an insult to people who by the way most of those people who vote for Trump had vote for Obama in 2008 how can you say to them there that they are racist and that they were duped by Putin I mean the put in try to influence the election the United States I'm sure you did but I did too I did I really did I did my best to influence the election and failed spectacularly and put in head I'm sure about the same impact that I had okay so this is the I think this is really very important we do not sacrifice good people to the ultra-right by treating them like morons and by demonizing them this is crucial we have to win the battle of ideas by treating people with respect independently of whether they agree or even like us or not given that the whole structure of the European Union reinforces national divisions and politics particularly in the parliamentary elections how difficult is it to build a political movement that has genuine impacted all of those countries when you have such clear divisions and toys of domestic political parties to the representation in Europe it's really very hard but all good things in life are very hard to achieve otherwise it wouldn't feel good look I have no idea what they will succeed or not I think what your president is referring to is the fact that diem25 is the first attempt to have a pan-european unitary movement so we don't have you know a branch in France and a branch in Germany and the Germans decide amongst themselves what they want for Germany are the French what they want to France let me give you a very simple example we set up a new political party in March we call it Mara Mara 25 Mara mean means day or deem in Latin so our electoral program what we are proposing regarding fiscal policy social policy climate change banking everything was debated by all our members including Germans Portuguese British members we don't give a damn whether you are in the you or not Europe is one thing independent and we do not conflate Europe with the European Union and then we all voted for the final version of the Greek political party we're doing this the same thing on the 24th and 25th of November for our German party democracy or OPA so we are trying a different kind of transnational progressive politics that is a new model is it going to succeed probably not but so what as I keep telling my friends I know that I'm going to die and I'm sure you will also die I hope not for a very long time but this is not a reason not to wake up in the morning optimistic so we shouldn't really care so much about the outcome of what we do we should care about what we do I want to ask that about your your time as finance minister and it was widely reported that you considered readapting the drachma and I was wondering how true that was her genuine of upon securement that was I'm guilty and what led you to look for a3 relaxation I'm guilty I'm guilty absolutely guilty but you know so is dr. trebla the finance minister of Germany and every other finance minister worth their salt the euro is a fragile construct every bank in the world not just in Europe has a plan for grexit a plan for it'll exit yeah I you know I plan for Germany it's what I was saying before reassuring the Dutchman everybody if they don't they are amiss they they have not fulfilled their duties to their shareholders as bankers so every bank has a plan for exit the European Central Bank I know he had a plan I read it it's called plan Z so I called mine plan net clinics I had run out of London letters yeah and it's important doesn't mean that you want to activate it but the moment I became Finance Minister I was immediately first day I was Finance Minister I was told in no uncertain terms if you don't sign on the dotted line of cutting pensions forever of selling your railways for pittance to bankrupt company you know I'm just amazing requirements that dissolve any sense of national sovereignty or common sense unless you do all that we will close down your banks what yeah that's a coup d'etat this is what you know even the CIA was not doing that to banana republics in the 1950s and it was happening in Europe in 2015 so the only way of saying to them listen I have a I have an outside option if you push me too much I will yeah we'll go to the drachma I had steps planned before going to the drachma because I didn't want to go to the drachma so I my plan was for a parallel payment system that was euro denominated that would act as a buffer and as it would bias time so that the powers that be in Europe would get their senses back and be able to pull back from the brink if necessary but that parallel payment system could at the touch of a button become the foundation of a new currency I I should be just sized if I didn't have that plan but like you know your mo D they have I'm sure in the drawers plans for responding to a French army invasion in Kent right I mean that's what armies do doesn't mean they want it does not mean that they are war mongers who want war against France it means that you should have a back-up plan so the being confronted with these sort of horrible bargains upon your entrance to the government to that change of views of the European Union or they just confirm your worst nightmares were you'd really shocked by the way it was government now it it currently simply confirmed that which I already knew I had no illusions I knew that I would be facing a wall of you know what I refer to my in my that's in their own book the Swedish national anthem routine that tourism a knows very well you walk in there you are very well prepared you put forward your case and you expect people to shoot it down to tell you what why your proposals are wrong and they don't and they say things about completely independent of what you've said it is as if you just sung the Swedish national anthem and I'm sure Terry's ma has experienced that I knew it was going to happen but I had a major weapon people say oh you walked in there with a I had a weapon I you know I owed 320 billion and I was not going to take another loan to pretend that I'm repaying it until and unless we had a sensible conversation and I didn't mind because you see if you owe a thousand quid to your bank Barclays then you're in trouble but if you owe three hundred and twenty billion they are in trouble I think with that we'll move to some questions from the audience I think you put your hand up and wait for a microphone to come to you we can never recognize you let's go first to the gentleman on the front row right here thank you can I stop saying thank you for such a wonderful talk and I thoroughly enjoyed it and from a personal perspective can I say you're one of the few people who manages to unite both my Thatcherite father and socialist uncle and their enjoyments of your appearances and but I just wondered since you've now launched this pan-european movement and at least in all of our lifetimes will a united Europe always remain a romantic ideal or can it ever be a reality look the answer is I have no idea really anybody wants is these questions is either lying to himself or to everybody else or the both yeah I have no idea what will happen what I know is that the alternative to a united Europe is a dystopia let's say for a moment just for a moment okay suppose we are all now brick cities yeah not just bricks it ears exit ears everybody should exit right what would happen what's going to happen in Europe now if the Euro however terrible it may be dissolves well I'll tell you what's gonna happen there's going to be a tectonic shift that divides Europe down the River Rhine and across the Alps what will happen is Germany will recreate the deutsche mark and Austria Holland Poland Hungary Czech Republic Slovakia and the Baltics will join that the deutsche mark zone they're not going to create their own currencies they are too integrated with German heavy industry folks were again I gave group and although that chunk of Europe North East Europe Calvinist Europe call it what everyone it's going to have a gigantic current current account surplus really in relation to the rest of the world so the deutsche mark is going to go through the roof as I was saying before that will mean experts will fall and there will be a substantial increase in unemployment in Germany Poland in those countries so you're going to have falling prices because the price of the currents goes up deflation with unemployment in Germany not good the only people who will benefit from that is the alternative Rhode Island and the various folks who are thinking of the 1930s with glee if you know what I mean the rest of Europe what's going to happen the currencies the rest of Europe will depreciate that will create inflationary pressures and you can have a combination of inflation and unemployment in France Italy Spain and so on is this a Europe we want to live in you think that too through brexit you are insulating yourself from that catastrophe now you are not going to be able to set sail for you know the Indian Ocean it's a beautiful island but it's a moveable you're going to remain very close to this kind of Europe so a united Europe is something we must fight for it doesn't matter exactly how it happens but at least there has to be very very close coordination of economic policy of monetary policy of investment policy and we need free movement the idea that you are going to elect big borders around Britain and you're going to have barbed wire fences and you will Electrify them and you will be safe this is absurd you're going to simply become very sad and very miserable if you do that okay and and the quality of the food is going to deteriorate as well so oh by the way you mentioned that yeah one of the great joys and concerns I have in this country is that I'm very good friends with Tory cabinet ministers and members of the House of Lords of the Conservative Party and Jeremy Corbyn and John MacDonald and I get on with them and I say the same thing to all of them and we all agree there must be something wrong in this world this is an indication you know the fact that both your socialist uncle and your torie father like me is a sure sign I enjoyed it but it's a sure sign that we live in a completely topsy-turvy world fantastic let's move to the next question and let's go to the women in the green jumper on the end of the right here hi thank you um I study populism and anti-democratic attitudes and you talked about how democracy was so important moving forward but Europe and the rest of the world are going through a crisis of political trust and when there's low political trust democracy and democratic institutions fail so what do you propose to rebuild that trust following failed programs and failed institutions thank you well the populism is a symptom the fragmentation the political center has not held in Europe but how could it hold when you're telling teenagers in the majority of countries in Europe that there will be no life prospects in their lifetime would you expect them to do do you expect them to take it what do you expect them to be vulnerable to the sirens of xenophobia who say to them it's a bloody Germans or the Jews or the Greeks or the Brits or the French or this it would those narratives of populist xenophobia always rise up to the surface when there is a massive crisis of capitalism and in particular when the crisis is deflationary not inflationary inflation is not a good thing it eats into people's incomes savings and so on but it is deflation as I was saying during my talk that baguettes political monsters people make a mistake even some historians in thinking that out of Hitler was the child of the hyperinflation not true if you look at the rate of inflation in mid-war Germany and you plot it against the electoral success the votes of the Nazi of the National Socialist Party you'll see that while inflation was positive in River even high the nationalist Socialist Party was getting minuscule proportions it was after 1930 when herb ruining the treasurer of Germany then introduced austerity after 1929 and inflation turned into falling prices that the Nazis skyrocket it is not an accident that we are having exactly the same thing now with deflationary forces that are a result of the imbalance between savings and investment I speak like an economist now for a minute we have a very major imbalance between savings and investment and if you think about it you don't need to be an economist think of savings as the supply of money to be invested to be borrowed and investment the demand for investment funding when supply exceeds demand whether it's apples or money the price Falls what is the price of money it's the interest rate the problem with the interest rates that once it falls below zero the pension funds of the German hives wife the pension fund starts shrinking and then she stops supporting Angela Merkel and she turns to populism to the eye of death this is what has happened so what how do we deal with it we're not going to deal with it simply by good you know with nice rhetoric we need to change the circumstances of people's lives so we need investments we need to push investment up because investment is what we need to create the good quality jobs that will create the incomes that will stop deflation the markets won't do it on their own the markets have stuck in those who all the money are too scared to invest it because they fear in a never-ending cycle of reinforcement of belief that others are not going to invest their investment is not going to be profitable they don't invest the result is demand is low sales are low they say I you see we were right not invest so it's self-perpetuating the only way to do it is by for instance having a large scale investment program like the New Deal that FDR Franklin Roosevelt had in 1933 at the European level you can have invest banks collaborating Britain should have an investment bank it doesn't you should create one we have the European Investment Bank we have the KfW in Germany they should issue bonds there our central bank should buy those bonds the money should go into a green transition green energy green transport fund to create the jobs that will return optimism and that on its own will see populism away we are time for one final question so let's go to the hand at the back I can only see a red sort of jumper sticking up but that's it yes yeah you there yeah yep thank you very much for your talk it was very interesting especially coming from Germany I agree so you said with reason that given the political state and fragmentation federalism and joined economic and fiscal policies is not the way forward in sustaining the Euro but yet on the other hand you said that stopping the Europe exiting and then creating this northeast and southwest split is also not the way to go so do you have any proposal of how to do it better oh please do not get me wrong I'm a federalist I want to see a federation at Democratic Federation what I'm saying as a realist at the same time is that this crisis has poisoned our politics look at your country you had a federal election what a year and a half ago and it Europe owes don't even never really discussed in your own country your country depends on Europe and Europe depends on your country and it was not really a serious issue even mr. Schultz running as the head of the Opposition as per day rejected everything that McLean had said as necessary and minimum prerequisites for saving the euro zone Merkel did what Merkel does which is you know being mercurial and simply winning one election after the other without ever having a vision about anything even though she's a very she's a fine woman as a personal level and I'm I thoroughly approved the two-week epiphany she had to let the Syrians in but then she reversed policy on this event but anyway so the point I'm making is that the politics is not allowing us before we stabilize the political economy of Germany before we give the half of the 50% of the Germans who are feeling worse off today than they were before the hearts fear reforms unless we give them a sense that Europe is good for them and that the solutions come from Europe not the problems come from Europe then the German public is not going to be interested in the federal moves which are necessary so we need two phases the first phase is something like the investment program that I was advocating which does not need any federal moves we have the institutions we have the European Investment Bank we have the European Centre Bank but we can use them in a way that have never been used before to stabilize Europe to create hope again amongst the people of Germany the people of Greece to see Europe as a realm of shared prosperity not a realm of individualized problems and then we can have a discussion about the kind of democratic constitution that we must write together the Germans and the Greeks one of the greatest tragedies of the euro crisis is that it was portrayed as a clash between Germany and Greece between the Netherlands in Italy between north and south this is analytically false and politically toxic in my view what happened was that the Grasshoppers of the of the north the bankers like Deutsche Bank and the grasshoppers of the south the Greek oligarchy the Italian ology bind it together before the crisis to create a gigantic bubble the bubble burst then they shifted all the pain to the German hard-working people to the Greek hard-working people and portrayed it as a north-south divide in a north-south clash we need to overcome this great well thank you very much that question that concludes our event today so thank you very much for joining us you

Channel: OxfordUnion

Views: 492,743

Rating: 4.6172576 out of 5

Keywords: Oxford, Union, Oxford Union, Oxford Union Society, debate, debating, The Oxford Union, Oxford University

Id: rhSg9X3q2gc

Length: 55min 41sec (3341 seconds)

Published: Sun Dec 23 2018

Reddit Comments

[u/K-Rose-ED]

I’ve always respected Yanis,. There was a great interview with him when the referendum was on about how we should remain but work to change the EU from the inside.

I think it was this:

https://www.theguardian.com/politics/commentisfree/2016/may/28/brexit-empire-era-trick-radical-case-for-europe-lucas-mcdonnell-democracy-eu?CMP=Share_iOSApp_Other

[u/renderingpcupgrade]

Man i fucking hate economics, its impossible to know what is wrong and what is right because the experts all have unreliable divergent opinions and laymen opinions are just trash.

It makes forming a non-shit opinion on anything economically related very hard because of all the research needed into the varying points of view.

[u/Maven_Politic]

I watched this earlier, well worth a watch for anyone interested in economics.

[u/MrPuddington2]

Nobody made Greece fudge the numbers and join the Euro.

[u/[deleted]]

Really interesting thanks for posting!

EDIT: Genuinely surprised people are downvoting this video, has Remainerism on this sub got so dogmatic you can't bare the idea of criticism? Yanis is pro-Federal Europe, ffs.

[u/steepleton]

pft, the greeks lied about their waist size then blamed the shop when their jeans split