In dealing with Varoufakis, I am reminded of Sam Brown’s quip: “Never offend people with style when you can offend them with substance.” In other words, there is no need to talk about Varoufakis’ shirts, his motorcycle and helmet, his photo shoots, his constant interviewing, his escape to Aegina the night of a historic vote, etc. The substantive case against him is simple and consists of three charges.
First, his entire negotiating position was premised on the idea that the Eurozone would cave in order to avoid Grexit. Of course, Varoufakis has told us that German Finance Wolfgang Schäuble warned him that he would push for Grexit—which means that either Varoufakis did not believe him or did not think that Schäuble’s threat was credible. Any sensible observer of European politics understands that even though the Eurozone is willing to do a lot to preserve the currency union, it is not willing to capitulate to a member who is asking for money without any quid pro quo. In other words, the premise was, from the beginning, unrealistic, and in pursuit of his negotiating strategy, he did Greece enormous damage.
Second, Varoufakis did nothing to do strengthen Greece’s position during the negotiations. He confused lecturing other finance ministers with “diplomacy” and managed to turn every single Eurozone country against Greece. Nor did his public diplomacy do much good—it turned him into a rock star, but without any improvement in Greece’s diplomatic hand. I cannot think of a country that has squandered so much capital so quickly. Nor did he find other ways to boost Greece’s hands; his “Plan B,” for instance, could have helped Greece withstand pressure from the European Central Bank for a few days or weeks; but it is hard to see why the other side would blink first.
Third, Varoufakis was/is so consumed with the idea of debt relief that he seems unable to contemplate anything else. He was unable to discuss specifics on the budget, nor was he able to produce a realistic numeric plan that converted the proposed reforms into fiscal outcomes/targets. He was, in short, not a technocrat (technocracy assumes some competence) but an entertainer. His only ideas that we will remember are either the ludicrous (the under-cover tax collectors) or dangerous (IOUs, parallel banking system).
In short: he started with a false premise about how the Eurozone functions, he was unable to build coalitions or any momentum for his cause, and he was incapable of moving beyond “debt relief” as a strategy to help Greece exit the current crisis. It was these mistakes that history will note, together with the catastrophic consequences of his tenure for the Greek economy.