New Greek Prime Minister Appoints Radical Economist to Cabinet

Greek Prime Minister Alexis Tsipras, who now heads Europe's first anti-austerity government, named a left-wing economist who once described austerity programs as “fiscal waterboarding” which were doomed to fail as the country’s new finance minister. 

Yanis Varoufakis confirmed that he would accept the new position with the newly-elected Syriza government and become the country's key negotiator with international creditors. In pre-election interviews, he promised to end what he called Greece's humanitarian crisis and to destroy the country’s oligarchs who “viciously suck the energy and the economic power from everybody else.”

Varoufakis, a dual Greek-Australian citizen, left his post at the University of Texas to take up the position. He will be sworn in Tuesday with the rest of the new Greek administration. 

In an interview posted on his blog earlier this week, the economist said he saw “a small window of opportunity to get something done that would not have been done otherwise,” referring to Syriza’s sudden rise to power.  
 
At the core of his pledges during the election campaign was to rewrite Greece’s agreements with the European Union and the International Monetary Fund, who both imposed draconian conditions on the US$283 billion bailout deal that contributed to the economic crisis in the country. 

“We are going to put three or four things on the table: genuine reforms, ending tax ‘immunity’ and creating a rational plan for debt restructure. We want to bind our repayments to our growth,” he told BBC radio.

Varoufakis has long criticized the bailout packages, which were largely used to bailout the country's banking sector, as well as Europe's conservative economic approach that demands strict budget spending and market-friendly structural reforms.

“The problem with the bailout is that it wasn’t really a bailout,” Varoufakis said in a Bloomberg television interview. “It was an extend and pretend, it was a vicious cycle, a debt-deflationary trap, which not only destroyed our social economy but also showed that the cost of our so-called bailout for the average German, the average Italian, the average Slovak was maximized.” 

Despite his animosity toward Europe's handling of the economic crisis, Varoufakis said that Greece's exit from the eurozone – what is referred to as a “Grexit” –  was not in the cards. There is plenty of room for mutually beneficial solutions with Brussels, he said.  

Also see: Syriza Can Look to Latin America for Inspiration

And: Greek Elections

​