FinMin Varoufakis: Τhe methods to provide European stability give the impression that they were not designed to be used

Finance Minister Yanis Varoufakis on Thursday said he is not satisfied with the eurozone’s institutions, during his speech at the annual conference of economists organised by the Institute for New Economic Thinking in cooperation with the Organisation for Economic Co-operation and Development (OECD) in Paris.

The minister raised the questions of how well the eurozone has been built, whether past mistakes have taught us and how satisfied we can be for the work of the institutions.

He said the eurozone’s architecture was designed on the basis of “completely independent debts and completely independent banking systems” and added: “Many of us had expressed serious doubts as to the correctness of this architectural design even from 1999. In essence, it is an architecture with which in order to operate, we must have the banking sectors separated, while at the same time we must have their abilities united, so that their services are recycled in what is a monetary union.”

Varoufakis said the crisis contributed in the re-design of some “very important sections” of the eurozone’s architectural design. “We created new institutions, we created methods of European stability…a banking union, we have a Central Bank which has the ability to face the negative forces expanding in the Continent. But are we satisfied from these institutions? As far as it concerns me, no,” he noted explaining that there’s “rigidity and inflexibility”.

The minister also noted that the methods to provide European stability give the impression that they were not designed to be used, or that they were designed with such institutional rigidity that, even if one wanted to, they couldn’t be used.

Turning his attention to the ongoing negotiations between Greece and its creditors, Varoufakis said the country is “in a tragic way” in the same situation it was in May and August of 2012, when it had to repay T-bills from an old European Central Bank (ECB) bill dating from the term of Jean-Claude Trichet.

The minister then described the complicated process involved in repaying debts towards the ECB and said: “As a finance minister during the current negotiations, in order to find the necessary liquidity, I will have to submit a request for the same procedure.”

During the afternoon meeting, Varoufakis participated in a discussion with economist and Nobel laureate Joseph Stiglitz, and spoke about the Greek government’s commitment not to return to primary deficits and its will to restart privatisations.

“The Greek prime minister has opposed the sale of certain assets, but he has promised he won’t cancel privatisations which have been completed and during the four months allowed by the February agreement he will only re-examine specific bids,” he explained, adding that Athens prefers public-private partnerships.

Asked on reforms, he reiterated Greece’s will to discuss a hierarchy in its reforms list with its partners and even the planning of draft bills which will be submitted to Parliament “so that we will know what we’re supposed to do in the next 4,3,2 years and not just for a short period of time.”