Good morning dear professor.

>> Just call me Janice. Good morning. Thank

you for having me.

>> Um Janice, it's an honor to welcome you

here in our studio.

And uh let me start with a brief

introduction. To begin with, you're the

professor at the University of Athens

and the former minister of finance in

Greece. But above all, you're mostly

famous for your outstanding work that

you did during the most consequential um

debt crisis in Europe, namely the Greek

crisis of 2015.

2026

has already started like quite a

turbulent year with a lot of shocks,

escalating military conflicts, uh the

resulting energy supply crisis, trade

routes, disruptions. Are there any risks

that we might be underestimating today?

And what is the single biggest one?

>> The greatest risk that we're facing at

the moment is the um convergence of many

different uh varieties of the same

crisis

um in a manner that will uh create a

depression in the west.

uh it's already happening across the

European Union that will uh uh snowball

into a crisis for the global south. But

allow me Julia to say that everything

you described, including my short stint

in government

10, 11 years ago, in the end stems to

what happened in New York City in uh the

fall of 2008.

That was when we had the great financial

collapse of Wall Street.

Now,

remember 1929?

>> I don't I wasn't born.

>> Well, no.

old enough

>> but almost old enough. No, but what I'm

trying to make, the point I'm trying to

make is in the same way that your

country, my country were devastated by

events that began in 1929 in New York's

city when Wall Street collapses and then

you have um a tsunami of um

repercussions,

>> right,

>> travel across the Atlantic hitting

Europe causing a great recession, a

great depression,

>> right?

uh the elites, the ruling classes

respond to this by saving themselves at

the expense of the majority of people.

That creates discontent that leads to

fascism as we had in the midwar period.

And then it's very very simple uh very

easy and very tragic for all these

developments to culminate into war into

um trade wars into all the things that

um uh caused such pain in Russia in

Greece in Germany in France. 2008 was

our gener my generations maybe you're

too young uh my generation is 1929 the

the reason why I got involved in

politics because you mentioned kindly

that I started life as a academic

professor and I never intended to go

into politics politics is just awful

it's really not recommended for people

>> we'll talk about it in detail a bit

later yeah your experience the only

reason why I did was because I could see

that we are having a repetition of the

mid 1920s is not mid mid 1930s I should

say. So what we see now I think is that

and speaking of risks

no separate um particular risk can be

assessed properly unless we understand

that we are in the vortex of the

repercussions of 2008 especially in the

way that they have affected the United

States economy. The manner in which uh

the mishandling of this crisis by the

Europeans has led to the fast and

furious de-industrialization of the

European Union of Germany that gives

rise to the fragmentation that you see

if Europe is turning towards militarism

towards military kenzianism as I call

it. Yeah. The only growth plan now in

Europe is to build more tanks. Uh

there's no other growth plan. I mean our

politicians have shown remarkable

incapacity

uh to focus on what matters. Uh and that

you know in order to have military

against you need to create enemies. You

need to continue the war in Ukraine. You

need new wars. Uh so that is what I

think we should always focus on that the

fundamentals are so bad of our western

economies that we are infecting the rest

of the world with crisis upon crisis

tension upon tension and wararmongering

therefore becomes the dominant paradigm.

So do you uh do I understand you

correctly that what we've seen in the

past 3 four years including the

beginning of 2026 and the um Iran war um

is basically the repercussions of the

2008 crisis and how it was handled.

>> I think so I think that we can

understand just like after 1929 you

couldn't understand the world without

understanding what happened in 1929. You

couldn't understand the trade wars that

uh the American government under

President Hoover started uh the huge

tariffs that reduced international trade

and created a beggar thy neighbor

mentality between Europe, Japan, the

United States and so on. You can't

understand the rise of fascism. You

can't understand the manner in which

Hitler and Mussolini took over and um

persuaded majorities in those countries

that militarism and fascism is the

solution. Uh you couldn't understand why

the second world war world war happened,

why the war economy happened, why the

Bretonwood system after 1944, 1945

started, why the cold war started.

Similarly, today there's we have zero

chances of understanding what went on if

we forget that this is the wake of the

events that began in 2008.

>> So, uh what is the single biggest risk

right now? Uh the militarism in the

western world.

It is the replacement of a rational

industrial and economic policy with

military kenzianism with the idea that

since we don't have an industry policy

in the west we might as well build tanks

because that you know creates firstly it

doesn't work uh there's no way that

Germany as we speak I'll give you just

the example of Germany uh Volkswagen

cannot compete with BYD or with Tesla

because they have invested it for 20

years due to the financial debt crisis

that started after 2008 and moved over

to Germany to Europe to Greece and so

on. So Volkswagen can't sell cars. So

they are shifting whole production lines

to rain metal to make leopard tanks that

nobody needs. Nobody needs those kinds.

Not even the Ukrainians need, right?

Because they're death traps. They're

obsolete. But we're building them. Why?

because it's the only way to keep those

factories going. But that doesn't help

Basque and uh Tissson Group all these

large companies that are shrinking now

uh to to stabilize the economy. So it's

not working fine in terms of preserving

jobs and once you start building up you

know military equipment at some point

you will have to use it otherwise you

know your warehouses will be full of

military equipment. This is why the

Americans have a war every year because

their model since the second world war

has been military. That's the industry

policy of the United States. You know

the military industrial complex as

Eisenhower, President Eisenhower warned

the American people. Um so you know when

this model of growth in commerce uh is

uh adopted in Europe then Europe becomes

a clear and present threat to the rest

of the world. I think you would agree

with me that the world today is going

through major geopolitical and economic

shifts. Uh the paradigm is changing. Um

so I wanted to ask your opinion who do

you think stands to lose and uh who

stands to win in terms of the um power

and resource game that is going on right

now.

>> I will answer in two ways. Firstly,

I

looking at the the larger picture,

imagining that we are now in the 23rd

century and we're looking back. Uh how

would our epoch era be remembered? I

think it will be remembered in two ways.

That's my twofold answer to your

question.

the the the first major and the most

significant one, the emergence of a new

form of capital. What lives in our

phones, in our tablets, big tech. Uh

this is not simply a new technology.

This is not simply uh

a new source of uncertainty of um

productivity. It's a new form of capital

for the first time in history in human

history. Not just in capitalist history,

we have machines that do not produce

commodities

except what they produce is raw power to

modify other people's behavior. Uh

that's what Amazon.com does. This is

what uh Google does, Meta and so on.

uh and that is a transformational change

which also contributes to the increasing

tensions between the United States and

China because these are the two main

centers of this capital I call it cloud

capital and that explains why from you

know around 2017 2018 under Donald Trump

1.0 we had the reemergence of the cold

war as a new cold war between the United

States and China. I think you know

future historians especially economic

historians will be looking at this

emergence of cloud capital as

particularly significant. The second

dimension which is related is the

bifurcation of the world the dissection

of the world. The world is becoming

increasingly divided

into um a n a US ccentric west

that increasingly falls into line with

uh the Trumpian vision of a petroate

fossil fuelbased economy uh which um

maintains uh an American

foundation as a result of the exorbitant

privilege of the US dollar which is

multiplied and reinforced by the

privatization of the dollar through what

I call cloud finance and in particular

stable coins. So the genius act of uh

Donald Trump last year I think it's

going to be remembered as significant

because essentially it was the beginning

of the privatization of the American

dollar. What do I mean by that? Up until

now it was a Federal Reserve, the

central bank of the United States that

ruled over the American dollar.

Increasingly now this is being passed on

to private companies like Tether and

Circle

uh which are issuing digital dollars

USDT, USDC and so on uh in a manner that

allows the American administration

government whichever is the government

not just Trump now but later on to

increase its debt because those

companies issue digital dollars using as

backup American treasuries. So this is

one world. The other world is bricks

bricks pass which um for me is um a

great source of hope that there can be a

different model a more rational model

because the americanoentric model is

fundamentally irrational. It is

>> probably the first economist to say this

in our interviews because uh often

economists are full of skepticism.

>> Oh I'm full of regret to bricks.

>> I I didn't say certainly. I said hope.

Yeah,

>> I look at the bricks plus um as a source

of hope.

>> Mhm.

>> No guarantees.

>> Yeah, I understand.

>> We can all go up and smoke tomorrow

morning. I don't know how India is going

to deal with China within the bricks.

There are tensions in there now the war

in Iran. Uh what is this? What will the

effect of that be on Saudi Arabia or the

United Arab Emirates? Um relationship

with the bricks. What about Pakistan

which is trying to play a go between

role the United States and but

nevertheless

uh if you if you look at the financial

uh machinery that the bricks have

created bricks pay it's a paragon of

stability and a paragon of rationality

when you compare it to the American

system.

>> Why?

>> Well, it's it's built beautifully. It is

built on a blockchain. It is a

distributed ledger. It is not owned by

China. It is not owned by Russia. It's

not owned by South Africa. It is I wish

we had that as part of the bread and

wood system since the 1950s and60s. Uh

whereas in the west you have a very

rickety, very inefficient

um payment system. Swift for instance is

a ridiculous system. I mean it

technologically is stone age. And the

only uh reason why it is so dominant is

because the United States can press a

button and stop it. So effectively it is

a a means by which Washington DC can

extort the rest of the world. So it's

inefficient and dictatorial.

Uh so yeah um

already uh you can see that in uh Africa

whole communities are being liberated

from fossil fuels by you know Chinese uh

investments into solar panels and

batteries. So villages that were never

linked to the electricity grid in Kenya,

in Uganda and so on now have autonomous

community-based and community-owned

electricity systems and mobile telefan

and so on. Now that is not part of the

imperialist American European system. It

is part of something that is much more

akin to the mentality of the bricks.

It's work in progress. I hope and pray

that uh it will maintain

um this hope and you know effectively

transform it into a reality.

>> Um speaking of the beneficiaries of the

current uh global transition um some

argue that Russia um is the country that

has gained from the recent instability

around Iran. Do you think that this um

short-term gain from the increasing oil

prices and uh the easing of some of the

sanctions that were previously imposed

on Russia could be a meaningful support

uh for the Russian economy more in the

long term or is just a temporary effect?

>> I think it's temporary but then the

temporary can last long enough. Uh I'm

going to be frank with you. Uh it is as

if Donald Trump uh wanted to um solidify

the position the position of Russia in

the in the war. I'm not saying he did,

but it is as if he did. Uh which is

remarkable.

>> That's like an externality of his

actions

>> indeed. Very well put, very well said.

Um but

Russia's interests like our interests in

Europe lie in ending the war in Ukraine

>> of course

>> lie in um

creating that which we never had since

1944 1945 and that is um a comprehensive

peace and security Eurasian

act agenda

uh the expansion of NATO the creation of

NATO and then the expansion of NATO

after the collapse of the Soviet Union

uh have been detrimental to the

prospects of development both of Europe

and of Russia. Uh this war in Ukraine

for me is absolutely tragic. It needs to

end and it needs to end with a

comprehensive European Russian Ukrainian

treaty. Uh Julia, let me give you an

example from the Greek perspective to

see why I think that this is total

madness what we're doing. Recently,

Chevron and Exmo Mobile uh signed a deal

with the Greek government, a government

which by the way, so that our audience

knows, full disclosure, I'm completely

at odds with I lead a political party in

Greece. I'm in the opposition. So that

you know, I'm not speaking for the Greek

government. They are my political

enemies. But my political enemies signed

this agreement with Exon Mobile and

Chevron. Okay, part of it was to explore

for gas in the Ionian seas, which is

ridiculous because even if we find it

will destroy our tourism, but forget

that for a moment. When it comes to the

Adrian, they're building what they call

the perpendicular axis.

Now this perpendicular axis is a series

of pipelines that will connect Greece

with Bulgaria,

Romania, Muldova and Ukraine.

Why? Because they plan to bring LG

liqufied natural gas from New Mexico and

from Texas

across the Atlantic. Imagine the energy

wasted on cooling it down, bringing it

across the Atlantic through the states

of Gibraltar under Malta to Greece to

pump it

towards Ukraine.

I mean, if you were an extraterrestrial

and you were watching this, what would

you think? These people are mad. I mean,

it's so detrimental to our ecology. It's

so meaningless economically. I mean, you

only do this if I if if if you're trying

to squeeze some very short-term profits

out of sheer disaster for the rest of

the world. So, how can we have

rationality and prosperity in Europe if

our governments are banking on the

continuation of the war in Ukraine in

order to profit? And what kind of

profits are they going to make? Exon

Mobile is going to profit a lot from

this

>> military production. So at the same time

for Russia it is crucial that it's

brought back into

um a normalized set of circumstances

with the European Union. Europe has to

come to um

find its way of talking to Russia. But

do you think it's possible to restore

EUR Russian relationships or um the

trust and the relationship have been

fundamentally broken?

There must be the will of two parties,

right, to uh come back.

>> There's no such thing as the European

Union, Julia.

The European Union. What is the European

Union? Are you talking about Usura from

the lion? Of course, nobody can talk to

us from the lion. I mean, she's half

crazy and she should have been fired

yesterday. Utterly incompetent. She's

utterly incompetent now. I have no as a

Greek citizen, as a European citizen, I

have no trust in her. She needs to go,

you know, because she is a disaster in

the making.

>> But yet she stays.

>> Yet she stays. This is why I'm in

politics. Not me personally. That's this

is so don't take the current political

establishment, the European Union, as a

given. We need to work towards changing

Europe. uh finding our our capacity

again as Europeans uh to to to be

sovereign to to to to know to to to to

realign

the interests of Europeans with our

economic and diplomatic policies. And

part of that must be for Europe to be

sovereign to create a set of policies,

proposals from the US to put to Moscow

>> or from who?

>> Pardon?

>> Sovereign from who? From the US

>> from the United States.

>> But as you just said that it seems like

Trump is actually looking to solidify uh

Russia's position in the world. And now

we see

>> it's as if he's trying.

>> As if as if. Yes. And now we see that EU

actually seems to be more stubborn and a

bit more shortsighted in terms of the

relationship.

>> I don't think look even if the price of

oil trebles and the finances of the

Russian Federation improves sufficiently

um this war is detrimental to the

interests of Russia. This war must end

and it must end in a way that offers

Russia the respect and the security that

it was never offered in the last 50 60

years or at least since 1991.

>> So why would they offer it?

>> Oh, because it's in our interest. Europe

is dying as a result of being coped into

Washington DC's plan for dominating the

European Union. Now I remember some time

ago I was having dinner with some people

that was in Texas and I happened to be

sitting next to a gentleman who had just

been had just returned from Europe, an

American, a general who had been up

until then the chief of staff of of

NATO, the top dog in NATO. And I

remember saying to him, asking him, I

said, "Why do we need NATO?"

And he looked at me, he said, "You

don't." He meant Europeans. We do. And I

said, "Okay, why do you need NATO?" That

was many years ago. This was 2011.

He said, "Well, for three reasons. To

keep ourselves in Europe, the Americans,

to keep Russia out, and to keep Germany

down."

Now unless the Germans realize that

they're being kept down, I mean they're

industrialists, you see this is a

problem. The industrialists of Germany

have betrayed the German people because

they care about only one thing to

maintain their net exports to the United

States. So even when Nordstream has been

blown up by the Americans really the

Americans and the Ukrainians that's who

and then they blamed Russia and they

blew up Nordstream the costs of German

industry went through the roof.

So the question is why didn't the German

industrial say something about that? Why

didn't they complain? Well because they

depend on net exports in the United

States it's the source of their demand.

Okay. But that comes at the expense of

the German people.

So this is why politics, which I

described as a very nasty and unpleasant

business before, something I never

wanted to get involved in. But you know,

it's a dirty job, we need to do it

because we need to reconstitute Europe

so that Europe can actually serve it own

interest. So it's a gross mistake to

think that there is a a European

interest and a Russian interest and that

the two are clashing. No, there's no

such thing as a European interest. At

least there is not. what is pre

presented as a European interest is the

interest of a tiny minority of Europeans

that goes against the interests of the

majority of Europeans. So the interest

of the Russian people and the interest

of the European people are aligned. What

we need to do is we need to create the

politics that would lead to this

alignment going from the grassroots to

the top. One of the most significant

shocks in the recent months has been the

war in Iran and the uh ripple effects

that it costs on the economy as you've

already mentioned. Um the energy crisis,

the disrupted trade routes that affect

the transportation of fertilizers and uh

a lot of economists are actually warning

us about the new inflationary wave. For

decades, the previous inflationary

crisis were often managed by governments

by actually um increasing the national

debts. Um and it seems likely that the

policy makers will resort to this kind

of measures again. um since you've been

at the center of negotiating the um

Greek debt restructuring and actually

how long do you seem is left before u

this elastic band that was stretched

without seemingly no consequences will

actually um snap.

>> Well, let me preface this. Um you've

been too kind about me. Uh the one thing

that characterizes my tenure is failure.

I failed entirely. What I was trying to

do was the right thing I believe. But we

were snuffed out by the parts that you

read about this. But you still put a lot

of effort in

>> of course and I still believe I'm very

proud that I tried but I'm I need to be

very clear for our viewers that I failed

and the result of that failure the

result of the obstinency with which the

powers that be in the European

Commission in the European Central Bank

in the international monary fund for

that matter uh the obstin obstinency

with which they you know impose their

will is the reason why Germany is

de-industrializing

now you know by you see what they did

and that's

I think a useful preface to answering

your question about now what they did

come to think of it is there was a

banking crisis that starts in 2008 in in

New York very soon after that the German

and the French banks go bankrupt all of

them simultaneously deeply they go

bankrupt they are bailed out through

debt by Germany Angela the chancellor at

the time you Yes.

>> Then 580 billion euros to the German and

the French banks afloat. Then after a

while countries, states, not countries

but governments in Greece, in Portugal,

in Ireland had serious difficulty

rolling over their debt because the

banks were bankrupt and they would not

roll over their debt because governments

never repay their debt. They just roll

over their debt. And so

there was a serious danger that the

Greek state would not be able to repay a

large chunk of its debt to Deutsche Bank

finance bank associate general var. So a

huge loan was forced upon the Greek

government at the time to go to those

French and German banks. effectively it

was a bailout for the banks not for the

for the Greek state and

the condition for that was a massive

recession in our countries

essentially

a reduction of 40% of pensions of wages

and so on which

come to think of it if you reduce

pensions and wages by this much you're

reducing demand if you're reducing

demand investment collapses because why

would an industrial invest when the

people out there don't have any money to

spend.

>> So you austerity principle.

>> Okay. So they destroyed investment.

>> Yeah.

>> And printed 6 trillion to give to big

business which of course Ulia you

realize that big business are not

stupid. They look at the people out

there. They see that there's no money.

You give them 6 trillion. Do you know

what they will do with it? They will go

to the stock exchange and buy back their

own shares. That's not investment. Share

prices go through the roof. inequality

gets much worse. The little people get

nothing. The ruling class gets

everything. House prices in Berlin and

so on go through the roof. Uh inter uh

rate um rents go up. So there is

discontent. Now I so coming to to the

here and now and to your question

>> now the interest rates are higher and

actually the deficits are widening. You

see what really worries me is that uh

this time because the debt is already

where it is

and the European Union has no capacity

anymore to fund anything anything. If if

if you recall there was this big plan

for the green deal the green transition

was talking about€1 trillion e

>> we haven't heard about it for quite some

time. Yeah,

>> they don't have the money. Even the the

money for the for the defense

procurement for buying weaponry, they

don't even have that. They're talking

about borrowing it um when already they

are hitting the buffers of their debt

limits. So my fear, and this is my

answer to your question, is that instead

central banks are going to respond to

inflation by raising interest rates.

And this is a catastrophic error because

there are times when it is important to

raise interest rates when inflation is

coming through the system but not when

it's cost push inflation. M

>> if there is inflation because there is

um um because the economy is overheating

because there's too much economic

activity there are too many investment

projects happening then it makes sense

to increase in in uh in the interest

rate in order to cool down the economy

but when prices are coming up because

LNG doubles in price the interest rate

is not going to change that so all

you're doing when you're increasing

interest rates when you have cost

pushing inflation is you're destroying

the economy. Effectively, you're pushing

it into a major recession. And of

course, a major recession is um yeah is

is going to reduce inflation, but only

by killing what is left of the

socioeconomic fabric of your economy.

So, you're destroying productive

capacity in order to keep it's a bit

like, you know, uh trying to kill a

virus by killing the patient. It's not a

good idea.

Do you think Europe is at risk of facing

another major sovereign debt crisis or

maybe even a default?

>> Uh, no. No. But you see, I am of the

view and I think I've already made it

clear that this is not a new crisis. We

are experiencing the same crisis since

2008 because we have treated it uh so

badly

in such an inefficient and destructive

way. The same crisis is

metamorphosizing. It's not a different

crisis. It is simply morphing. It is

changing shape, form, but it is the same

crisis which is getting deeper.

>> So, do you think we've never been out of

it since 2008?

>> Not for a m for a moment. beginning with

uh the collapse of uh uh the Wall Street

banks, all the Europe that European uh

leaders and policy makers did was to

try to plug holes.

But every time they plugged a hole,

another hole opened up because of the

the system was simply um riven with

contradictions.

Julia, think about it. We created a

central bank for 20 countries more or

less

without having a treasury to stand next

to that central bank. That has never

happened in human history before. And we

have therefore 20 treasuries that don't

have a central bank because that central

bank was created on the assumption that

it cannot help those treasuries.

Now this is a monster that we created

which works quite well during the good

times but because it is so badly

constructed it builds up bubbles and

then when the bubbles burst for any

reason the reason why they burst said

this again is because of New York uh the

Wall Street collapse it could have been

some other reason but you once you've

created those bubbles and they burst and

you have no mechanism

for recycling the deficits into

investment

and you print trillions and trillions.

It's like again I will give you a

medical parallel. It's like giving a

cancer patient a huge cortisone

injection, right? They feel much better

but the cancer is still doing the the

ugly deed under the skin. This is what

Europe has been like. And you know the

if if if you want to see in full

technical the problem in Europe just

notice that in the last 16 years 17

years we've had zero net investment in

Europe. Think about it almost two

decades of zero net investment in

productive things not buildings you know

and paper. I'm talking about machines.

I'm talking about schools. I'm talking

about things that are actually

productive. Zero net investment for

almost two decades. That's why Europe is

becoming irrelevant. That is why it's

fragmenting. We used to have a north

south divide. Now we have an east west

divide as well. We have fragmentation.

This is why our leaders resemble um

liipatians running around in a state of

panic. Uh Donald Trump is humiliating

them and they can't articulate a common

position. They have no peace plan for

Ukraine. They have no war plan for

Ukraine. They have no plan for anything

really. But that is not because somehow

stupidity has become the order of the

day in Europe. It's because the

political economy of Europe, our

financial system, our industry is

fragmenting as a result of a very poor

monetary design which was never meant to

sustain a substantial world crisis.

So do you actually think that the

uh individual European countries would

benefit more from um having their own

currency and monetary policies rather

than being united by the euro currency?

So is the euro more of a constraint or

actually a facilitator for the economic

development of the European Union? My

answer to this question has always been

that there are two logical options, two

options that make sense, that are

coherent.

One is

to keep the euro

and add to this architecture the missing

link which is a federal treasury.

So either we move from just a monetary

union to a fiscal and a political union

to create a federal Europe.

>> Do you think it is at all possible to

have a single fiscal uh institution for

all the European countries?

>> I think it is possible. I don't think it

is feasible politically now. But you

know the reason is that they created

federal money first.

When you do that first then you are

creating the circumstances for a massive

crisis which which effectively results

in huge centrifugal forces. So if we had

this discussion in the 1990s and we said

okay look why don't we create a common

central bank and a common treasury we

could have done it

but when you create a central bank that

gives rise to these huge tensions to the

massive recession that hit us as a

result of not having a federal treasury

to create a system of recycling debts

and deficits um across Europe. The

result is that you go to the Germans

now, you go to the Dutch, you go to the

Greeks, and you say, "Would you like a

little bit more Europe?" And they say,

"No, no, no. We've had enough." So, I

think you're right that we can no longer

do it because uh of the manner in which

the whole

monetary union was mishandled. But

logically speaking, it would make sense.

If we want the euro, we if we want the

monetary union, we need the fiscal and

the political union. If this is not

physible, then let's go back to our own

individual currencies.

Tragically, we're doing neither.

We are

maintaining course as if we have learned

nothing and we've forgotten nothing. Uh

we are trying to keep the monetary union

without the fiscal union. The result is

zero net investment.

>> Can actually zero net investment be

overcome? what would be the mechanism

for overcoming this or um what you are

predicting for Europe to experience is

basically inevitable because all the

mistakes have already been made.

>> Oh, nothing is inevitable. The great

thing about humanity is that we could do

things differently. You know, it's up to

us. We're not AI. We're not algorithms.

We have a capacity to reason and work

out solutions. So I'm going going to

answer your question by conveying for

our audience what I was saying when I

was in Brussels when I was in Frankfurt

and as a minister I was making those uh

proposals.

So we know that we have an investment

deficit

a huge invest not fiscal deficit and in

that's the greatest problem of Europe is

that we are not investing enough we

haven't been investing since 2008.

uh there is a lot of money but it's not

being invested in anything that is

productive.

If you go to a small African country

where there's very low investment

because there's no money it's

understandable but it is tragic for

Europe that is swimming in money not

invest the money. So there's a prison

dilemma. There's a trap there which

stops from from doing this. The private

sector would like to invest but no

privateeer will invest when they think

that nobody else thinks that nobody else

thinks that somebody's going to invest.

Right? So they are caught up in a trap

of their own making.

>> So in those circumstances what you need

is something like a new deal. What you

need is a public investment program that

crowds in private investments. So

practically what would that mean? What I

was proposing in 2015 was this. We have

a common investment bank. It's called

the European Investment Bank. It's in

Luxembourg and also it's federal in the

sense that it belongs to all the member

states of the European Union. Now, it

works really very well, but it's a very

small player because it's forced to be

small by the political system. Now

imagine if the European Investment Bank

were to announce in a press conference

together with the European Central Bank,

the other federal institution we have

the Central Bank of the European Union

that the European Investment Bank is

going to issue bonds worth 600 billion

every year. 600 billion every year bonds

and the central bank announces that if

there is a need,

it will buy those bonds in the secondary

market to prop up their value and keep

the interest rates down. If it makes

that announcement, it will not need to

buy anything because people will be

buying those bonds as if they are hot

cakes. And then you have 600 billion

every year for common investment.

Investment into what? How about energy?

You know, we are energy dependent. We

used to be on Russia, now we're on

America and Qatar, right? So there you

are. We don't have an energy union,

which which is mindboggling. So Germany

has its own energy plans. Greece its

own. This is not a European Union. This

is European this union. So imagine if we

spent all this money on transport, on

energy, that would be the solution to

the problem. um that on on a personal

basis, let me tell you that when I was

saying these things to the president of

the European Investment Bank, to the

president of the European Central Bank,

none of them told me that this is not a

good idea. They all agreed it's a good

idea.

>> Then why didn't they implement that?

Because by the time we moved into the

big room where all the boys and girls

were uh you know the council in which

the decisions were made the decisions

had already been made before and the

decisions were no we are moving towards

money printing for the very few and

austerity for the many. It was a

political decision about that. This is

the this is the problem when you have a

European Union which is neither

democratic

nor nor a dictatorship.

We are we've fallen in between democracy

and the dictatorship. It's completely

undemocratic. But we don't also have

somebody

you know like Zin Ping right who says

okay this is what we're going to do. So

the result is uh the lowest common

denominate. It's it's a it's a

structural problem that the one we're

facing in Europe. But unfortunately that

has repercussions for the rest of the

world.

So as uh you mentioned already, you were

at the center of the negotiations uh to

restructure um Greek debt at the height

of the crisis when it was uh 175% of

GDP. Um since I have you here in the

studio, I cannot not ask um how do these

negotiations actually unfold and what

were the main challenges and did you

change your perspective on how actually

the European um union and their

consensus um system work after these

negotiations?

Well,

a couple of different uh answers in

order to give you the the feel of uh the

place.

>> What surprised me? I tell what surprised

me. The first thing that surprised me

was that when I walked into these rooms

with uh very serious people like

Christine Lagard who was then she was

not at the ACB, she was the managing

director of the International Monagi.

uh with these functionaries, right? And

I laid down my position and I explained

what I we were proposing and so on. I

was dumbfounded that in private they

agreed with me. I wasn't expecting that.

I was expecting them to say that their

policies were the right ones and my

policies were the wrong ones. So at

first I felt this is easy.

But then as I intimated before, you go

into the council and they say exactly

opposite.

>> Why?

>> Well, the explanation that Christine

Lagard gave me on a personal basis on a

in private was um Yian is look what

you're saying is completely right. Those

policies cannot work. But you have to

understand that we have put so much

political capital into these solutions

that we cannot go back.

And then you think okay

>> but isn't it some cost?

uh not for them because for them

at least for the polit political parties

in the Buddhist tag in Germany and in

the national assembly in France and so

on to agree with me in public that that

was the wrong policy. it wouldn't be a s

cost because you know what they had lied

to their own people uh when they were

bail out bailing out Greece for instance

they had told the members of parliament

that tu members the esped members that

look we're doing this out of solidarity

to Greece when in reality they were

doing it out of solidarity for Deutsche

Bank they had lied to their own members

of parliament so to agree with me they

would have to go to their own members of

parliament and admit that they had lied.

>> Mhm.

>> That is not a sign cost anymore. So

that's one.

>> The other thing that I was very

>> struck by,

I hope our audience doesn't consider

this to be arrogant on my part, but I'm

going to be honest with you, the very

low level of technical expertise of

their functionaries.

I was expecting to go in there and meet

extremely competent people you know

finances people who actually understand

the debt markets who understand uh

finance who understand economics they

didn't

>> so you talk about the functionaries of

the international monetary fund for

example

>> they were the actually better ones but

even they had some very I mean at some

point they were

proposing that we increase VAT 20 value

added tax, sales tax to 24%. Which they

did after I resigned and I left. Um, and

I was saying to them, but this is

catastrophic. You know, we have a

recession. You're going to increase VA

to 24%. Right? And

yeah, what are you doing? You are

shrinking. You It's like killing the cow

whose milk you want in order to repair

that. That's makes no sense. They said,

"No, no, no. It's going to I said can I

can I look at your econometric model on

which you're basing your facts your

facts your projections they didn't want

to give it to me if in the end I

insisted that they gave it to me and you

know I'm now speaking as an economics

professor when I looked inside that this

is the the one thing I can do I can look

inside the mathematical model and

understand what's how it works if this

was written by a first year student of

my university I would have failed them

because they had zero price elasticities

is do you know what this means? It means

that it assume it assumed that if you

double the price of something

>> the demand will remain

>> the demand will be the same. Okay. Now

this was motivated stupidity. They

wanted to push our VA up there to punish

us to you know to to show to the Greek

people that if you elect somebody like

me you get punished. But I wasn't

expecting to see that low level of

expertise and indeed

>> maybe all the expertisees in the private

sector.

>> Well, there were some people there who

were smart. Not many. Not that many. You

know what they had in common? I realized

this later.

>> Tell me.

>> They had all worked for Goldman Sachs.

What were the main lessons that you've

learned maybe about the limits of

economic uh policy and the distribution

of power within the system?

I think that the best answer to your

question is to refer to the late Vulfkan

who was at the time the federal finance

minister, the German finance minister um

who answered your question to me because

at some point I was trying to have a

conversation about him based on economic

reality. He was pushing down my throat a

program that I I analyzed it would be

catastrophic for both us and for them.

And at some point I I tried to make

sense of what he was saying and try to

bring him on my side by means of some

rationality. So I said look the manner

in which you want you want us to

eliminate our deficit. You want us to

have a a a primary surplus. But if that

is to happen with uh a balance of

payments deficit, we are going to have

to reverse the relationship between

savings and investment basic

macroeconomic stuff. And how are we

going to do that? I said and then he

said to me and

I think that that's the answer to your

question. He said, "Yanis,

I don't know economics.

I don't understand economics. And that

is my greatest strength. I do not want

to understand economics cuz I'm here in

order to impose a political will within

this Euro zone on economic matters." He

said, "You're right, but I need to bring

order, political order."

>> So political reason overrides the

economic rationale.

>> That's right. And the result is the

de-industrialization of Germany.

>> I see. Um actually recently in the past

few years we've seen uh quite a few

examples of major disagreement within

the European Union. Um be it the

negotiation of the um distribution of a

90 billion loan um to Ukraine or

complete ban on Russian um energy

sources. When we speak about the uh 90

billion loan to Ukraine, uh the European

Union um discussed that they would be

willing to bypass the veto of a key

member player. And that leaves the

following question open. Um is then the

European Union uh consensus framework

necessary at all if it's willing to

ignore some of its member states?

Uh there is no such thing as a

consensusbased European Union. That is a

figment of uh Europeans imagination. It

is a it's a nice story.

>> What is there instead?

>> Oh, there is brute force. Brute force.

Remember um I resigned the finance

ministry on the night of a majestic

referendum when the Greek people voted

by 62% to say no to this particular

bailout.

>> And what happened that night? The Greek

people were overthrown. Yes. Yes.

>> So, um, and it's not just Greece.

Remember back in the 2000s when the

Irish were asked to vote for the

so-called,

uh, constitution of the European Union,

and they voted no. And remember what

they were told, vote again until you get

it right. Right. So, um, people say to

me that Europe is suffering from a

democratic deficit. I said, no, no. It's

like saying that uh on on the moon there

is an oxygen deficit. There is no oxygen

deficit of on the moon. There's just no

oxygen. So similarly there's no

democracy in Europe. It's uh u it's a

very clever system of presenting

an oligarchy as a cartelbased

institution as a democracy. But it is

that's just the the wrapping paper. The

reality the reality was told me when I

walked into the council of ministers

because I I went in there with the idea

that we are here to build up a

consensus. So I said I'm here

representing a new government. We have a

new mandate. Now that doesn't mean that

our mandate takes precedent over your

priorities. I'm here to find a way as

Democrats should do of blending together

our mandate with your mandate. And you

know what the answer was? The answer was

elections cannot be allowed to change

the European Union's economic policy.

Okay. So the idea that um we are a

consensusbased

union and uh there is mutual respect.

Now this is um propaganda. The real

reality is that you have a very brutal

force driving these discussions. Uh and

I'll come to the example of the Russian

assets and so on

independent of whether you agree or

disagree with this. Think of what they

did to what they tried to do to Belgium.

Now the Russian assets what something

like 190 billion u euros the also from

the lion the president of European

commission and Germany and France were

insisting that uh this money this

capital is used as a collateral for a

loan that will go to Ukraine

>> which is of course you know in itself

it's um it's a huge lie because you know

that Ukraine will not be able to pay

this. So effectively what you're saying

is you're going to take this money and

give it to Ukraine.

>> Yeah. You're covering your cost.

>> Okay. If you want to do that, just say

so.

Don't try to use financialization that

you use as collateral to borrow money

and so on. Okay. Set this aside for a

moment.

>> Exactly.

>> Um essentially the Belgian prime

minister said, "Guys, you know what? If

we do this then there are all sorts of

ways that people who are companies

countries that are owed money by Russia

can litigate against Belgium and win

their litigation and demand that money

from us in Belgium. Now all the Belgian

prime minister didn't say let's not do

that. What he said was can we share the

risk please? Can we share the risk? And

they said, "No, you take this risk." And

they bullied him and they kept bullying

him for months, right? And to his

credit, he stood his ground. But that is

not the behavior of a consensusbased

European Union.

>> I would ask you some more questions

about this, but unfortunately, we have

uh a time limit. Um I would like to talk

with you actually about your work and

your critique of capitalism. You've said

repeatedly that capitalism has been

failing people and uh personally I

cannot help but agree with it because

many of my acquaintances and highly

skilled professionals who are employed

in the global multinationals cannot

afford such a basic thing as owning a

home be it in Russia, Europe or in the

US. So is it a failure in the system of

capitalism itself or in the way it has

been managed?

>> Both

the

failure is embedded in the system that

is capitalism from the very beginning

and then there are ways in which the

repercussions of the failure can be

handled or managed. So there are

efficient management techniques and

there are inefficient techniques. But

the serious the serious the kernel of a

problem lies in the organization of

capitalist uh production and

distribution and yeah I have again I as

I always try to do you've seen that I

try to be honest with our audience so

that people know folks

>> that is very valuable actually. Thank

you.

>> I'm a Marxist. Okay. So you can dismiss

me right now. Stop watching. Uh and but

why am I a Marxist? I'm a very peculiar

kind of Marxist.

>> Yeah. You call yourself a uh libertarian

Marxist.

>> A libertarian erratic Marxist. But I

think that Marx was also libertarian and

erratic. You know, Marx himself said he

wants to see the state wither. Um it was

all about freedom for him. It wasn't

about equality. It was all about

freedom. And his criticism of capitalism

that makes everybody unfree and in the

end fails. It's inefficient. You see the

social democrats in Europe uh have made

a very huge mistake for 100 years now.

They've been saying that oh capital is

very efficient but unjust. So it

produces a lot of stuff. It's really

very good at production at efficiently

managing uh the uh production process

but the income that it creates is very

unequal. So we need to bring justice by

through the tax system and through

subsidies and through shifting some

money from the rich to the poor. They

are wrong. The problem with capitalism

is that it is grossly inefficient and

this is why it is unjust. Uh and why is

why why is this? Well, think about the

whole point of capitalism is that you

have a very small minority who own the

means of production.

uh and the ones who own the means of

production do not work with the means of

production and those who work with the

means of production do not own them. So

this in congruity is really very

interesting because it means that it's a

question of control and the owners will

always choose production techniques that

far more geared not towards maximizing

production but towards controlling the

ones who get exploited. Capitalism is a

system that

initially when it came around it

liberated us from the uh norms of

feudalism.

It gave us liberties we never had. It

allows us to you know

the the right to choose but also it

condemned us to having choices the

majority of having choices between

different kinds of kinds of laws.

uh and in the end it is a system that

generates gigantic productive capacities

which can never be used in the common

interest and the financialization that

comes on top is the way in which the

system can equilibrate itself. But this

financialization creates debt crisis

that then periodically

submerge whole populations into massive

misery. And from that you have fascism,

you have racism, you have misogyny, you

have the discontent that you now see

across the west. So that was always my

view about capitalism. But in the last

five, six, eight years, my criticisms

has also taken another turn because of

what I mentioned before, what I detected

or defense was going on, which is the

the the emergence of a new form of

capital, which is now turbocharging the

crisis of our capitalist system uh and

is, I would say, transforming it into

something that resembles feudal ism a

lot more than the original idea of free

market capitalism.

>> Do you think that the younger millennial

population and Gen Z are actually at no

luck of living in economic prosperity

um and uh affording a decent living um

as their parents could do?

>> Oh, clearly not. And I think everybody

knows that now.

>> So, are they doomed?

>> Nobody's doomed. Nobody's doing because

I I I maintain my you know my hope in in

human capacity to change course. I'm not

saying that I am predicting that it will

but we have a capacity in the same way

that you know the humans have a capacity

for beautiful music or you know

beautiful acts of kindness. They don't

have an offen

>> but if most music is rubbish but you

know you can have beautiful music and

you can have kind acts. So you know we

can surprise ourselves by you know good

deeds and revolutionary moments. You see

you remember what Hannaren said once

that every revolution seems impossible

before it happens and inevitable after

it does happen. So I'm not going to say

that they're doing but if we continue as

we are doing now there's no doubt they

can see it. The reason why people are

turning towards the ultraright in

Europe, in America and so on, the reason

why Trump won. What was the reason why

Trump won? That the American dream was

dead. Dead dead in the water. The idea

that Americans had that, you know, our

children are going to live better than

us. Uh and that, you know, if we work

hard and we save and we do good things,

good things will happen to us. That

died. The moment that idea dies, then

you have discontent and you have malice

and you have somebody like Trump being

elected.

>> So today we've talked extensively about

the current shifts that are going on in

the world, the global economy crisis and

uh instability.

Uh but in the end the question for most

people is simple. How do you protect

what you've earned from this

instability? Is there a safe heaven for

people's savings? right now. And um how

do you personally protect your capital?

>> I'm extremely risk averse. You see, I

know enough to know that I know nothing.

Um anybody who tells you that I have a

good answer to this question is lying to

you.

It is the nature of the beast that um

you know there's no safe haven

except for cash of course but then of

course you get no returns. So I'm as I

said I always go for the least amount of

risk when it comes to money that I need.

Now I'm not rich enough to have money

that I don't need. So if I had money

that I didn't need, maybe I would have

taken the risks and so on. But my my

answer to your question is please avoid

advisors who tell you that they know

something that it is impossible for them

to know and the only reason why they are

pretending to know is because this is

their business model. Uh when it comes

to actually investment, I'm not talking

about just putting your money here or

there. For me the the the answer is

really very simple. What are the

technologies of the future? What will

humanity be relying on? It will be

electricity, clean energy uh and what I

call cloud capital.

Now everything else everything else is

um an unknown factor. It is a stoastic

variable that um it is by definition

impossible to to pin down.

>> Thank you Janice so much. Thank you

>> for all the expertise that you have

shared today.

>> My pleasure.

>> I hope to see you again.

>> Absolutely.