Media assumptions about austerity: Varoufakis on 'Newsnight'

By Simon Barrow

February 2, 2015

Greece's new finance minister, Dr Yanis Varoufakis, has made quite an impact during the first few days of the Syriza administration, as he tours both the television studios and (more importantly) the European finance ministers to seek a different approach to the Eurozone crisis.

His starting point is a democratic mandate and the belief, buttressed by a ream of facts, that austerity and debt-deflationary policies are failing. His own country's economy and productive capacity has shrunk hugely during a period of imposed cuts and unsustainable loans. The debt burden has grown. Poverty and social dislocation has increased. This is the path of madness for all but those who benefit from bailouts to reckless bankers.

The job he has in squaring the economic circle (while circling the political square) is an unenviable one. What he wants to do is to pay down debt by reviving the Greek economy and making sure that ordinary people are not made to suffer for the failures of a financial system and its economic determinants they had no part in.

Meanwhile, over at the BBC, austerity economics seems to be taken as received wisdom, and anything else written off as "far left" posturing, in spite of the fact that what Dr Varoufakis is saying, repeatedly, is gaining respect and recognition far and wide – even from those who might disagree with the detail of his proposals.

The climate of opinion is shifting discernibly. "The case for using public investment to boost growth in the Eurozone is overwhelming," says Harald Sander, Jean Monnet Chair and Professor of Economics at Cologne University of Applied Sciences and at Maastricht School of Management. "When this crisis began Greece's debt/GDP ration was 110 per cent. Now it is over 170 per cent. So the medicine [the Troika] gave was poisonous," declares Nobel Laureate Professor Joseph Stiglitz. "Angela Merkel must accept that her austerity policy is now in tatters", says Joschka Fischer, Germany's foreign minister and vice chancellor from 1998 to 2005.

These are not marginal or extreme voices. Nor is the one coming out of Greece following the recent general election.

Dr Varoufakis' recent interview on BBC2's Newsnight (31 January 2015) is an important document of the gulf in understanding that exists between Britain's public service broadcaster and the changing landscape of European political economy.

In response to an initial question about whether Greece would "take further bailout money or not", he spelled out, using a household analogy, why using unsecurable loans with volume interest to address an insolvency crisis was not a good idea, and added that dealing with this issue was not a question of 'take it or leave it' ultimatums. (The real problem is not Greece’s debt in isolation, it is the Eurozone’s bailout conditions, by the way).

Interviewer Emily Maitlis, nervously shuffling her questions, was impatient and clearly irritated with this response, since it appeared that in her mind the only legitimate answer was a simplistic 'yes' or 'no' – which would then have enabled her to make one of two sorts of further accusation about a 'one-sided' approach from the Greek government.

Dr Varoufakis, for this precise reason, did not accept the premise of the question and offered a perfectly coherent alternative perspective – time ("a few weeks") for a rational discussion among European partners to seek a proper solution aimed at minimising the cost of the Eurozone (not just Greek) crisis on ordinary people. In this setting, he had said earlier in the day, the terms of further loans and extensions need to be carefully considered.

This continued to be the pattern of the interview, with the BBC journalist asking binary, poorly researched questions (they had misconstrued and mistranslated an earlier comment in Greek from Varoufakis about dealings with the Troika) and expressing exasperation at considered, rounded responses when they did not buttress the fixed assumption of the question.

Is the run on bank deposits a problem? Of course, said Dr Varoufakis. But don't mistake the symptom for the root problem. For five years an insolvency problem has been treated as a liquidity problem, and going on doing that makes no sense for anyone.

Once more, the point seemed lost on Ms Maitlis.

But didn't Syriza want to reject structural reform? No. It wanted to deepen it, but in a credible way. "We have had enough in Greece of being in a country that desperately needs reforms but is not getting them," Varoufakis responded. "This has not been reforming over the past five years, it has been de-forming… not addressing all the malignancies of the Greek economy."

What followed was a solid explanation of the vital difference between inward investment that raises domestic productivity – like the plan to reinvigorate Greece's ports – and 'fire sale' privatisations in a deflationary crisis which leads to valuable assets being sold off for peanuts.

Maitlis was unimpressed. With the assumptions (and facts) behind her questions being shown to be partial or mistaken, she accused Dr Varoufakis of "ambiguity". Which appeared to mean that what he was saying was not what she had been told he was supposed to be saying. "Perhaps your reporter's report on what he thinks, or she thinks, we are saying is ambiguous?" the finance minister suggested.

There then followed equally sharp retorts on whether Dr Varoufakis "trusts" Germany ("Yes I do, actually", he said, citing a major article he had written only recently on its key role in solving the Eurozone crisis) and whether he endorsed bizarre statements by his Greek coalition partners ("Does Mr Cameron endorse everything Mr Clegg says?").

It was a masterclass in dealing with hostile, uncomprehending interviewing.

"I understand that journalists love the language of confrontation – I don't," Dr Varoufakis said early on. "Some journalists", he might have said.

There is a journalistic distinction between interrogation and haranguing; holding interviewees to account and basic lack of respect; drilling down to verifiable facts and asking for cast-iron quantification of variables. Newsnight is an important programme for opinion shapers and the public. Its producers and the BBC need to reflect more on those distinctions.

* BBC Newsnight interview with Greek finance minister Dr Yanis Varoufakis (YouTube): https://www.youtube.com/watch?v=BiIO4YciewU#t=841

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© Simon Barrow is co-director of Ekklesia. He has been involved in professional journalism for over 30 years and is an active member of the NUJ.