Finance minister Yanis Varoufakis laid out his cards on the table in an interview with private Greek TV ANT1. Speaking to veteran presenter George Papadakis, he said that the government had committed itself to increasing VAT but assured that this would not threaten basic goods and services or harm islands that are privy to special tax laws. He said taxes would not increase for pharmaceutical supplies, for basic foodstuffs, books, in tourism, on islands and border areas. Asked where taxes would increase, Varoufakis said that he would search for a good of little use and increase VAT on it as a show of goodwill.
He said that the Greek government’s agreement with the Eurogroup was vague because that is what the EU partners wanted in order to ensure that they would be able to pass the program through their parliaments in order for it to be ratified.
Do we have a memorandum?
We have great success. We had a memorandum and the state always had one. We had elections. The people gave a mandate to go against the logic of the memorandum. We managed to align both. On my first meetings (abroad), I was told that the elections haven’t changed anything. It was not possible to abolish democracy for the sake of the Eurocrisis. This would be a gift to Golden Dawn and euroskeptics. Never before have we exploded two Eurogroups in the air, and this has not happened before, we combined political with financial discussion. We managed to have a third Eurogroup for Greece to change the relationships. We were alone but became the majority.
The bar for expectations was high, have you promised a lot and now it looks as though you’re backing down?
I was not and am not a member of the Radical Left Coalition (SYRIZA). I asked to become one but this has not occured. My convergence with SYRIZA and Alexis Tsipras happened over the last two years. I have said that simplistic moves don’t help. I said that the more we get installments, the more we reduce Greece’s negotiating strength. People knew exactly what they were doing in the last elections. They chose a government that would say ‘no’ to the policies of the past.
The Greek nation said ‘no’, but not you?
Is the memorandum over?
It’s over. Allow me to explain what memorandum means to me. Borrowed funs and austerity are permanent darkness. The terms of the memorandum undermine the concept of reform in Greek society. We hit pensioners and hairdressers while reforms were mishandled.
Is it full of vagueness?
It is. We are very proud of the level of vaguenessness. I use the term creative vagueness. I want to be the first finance minister to never refer to the numbers unless I am sure I can achieve them. I told the EU partners that if I give you an amount for revenue or revenue from tax evasion then I would be lying.
Will VAT increase?
It won’t increas on islands, tourism, pharmaceutical supplies, border regions, food and books. We will find a product and increase VAT there.
What did you achieve?
We put the humanitarian crisis on the agenda for the first time. I am here because there are kids starving out there.
How will you achieve this? You signed a deal that doesn’t allow you to act unilaterally? You would need the approval of institutions…
The gang of technocrats won’t be here. It won’t be the same. We have said that there will be no unilateral actions of negative fiscal consequence. For such activities as overdue debts we don’t need approval. We will also move in other directions as we don’t want honest taxpayers to feel duped.
Do you have a plan?
We will finalize it over the weekend. With the agreement we reached, the memorandum ended and unacceptable behavior has ended. We are in a Europe that has undermined itself. I had said earlier that at the Eurogroup there is not even discussion. We are changing Europe. I was in Frankfurt with five secret policemen. I asked to go to the toilet and one of them had to come with me. “I want to thank you because Europe needs to change for us Germans too,” he said.
Do you have secret police with you here too?
No. If I need it then it’s time to resign.