Yanis Varoufakis says Greece is being 'fiscally waterboarded' by a 'Global Minotaur'

An extract from Yanis Varoufakis' new book, published today by The Guardian, gives an idea of just how difficult Greece's former rock star finance minister can be to deal with.

Varoufakis sensationally and unexpectedly quit yesterday, blaming European creditors who apparently found him impossible to talk to, just hours after he won the "No" vote he sought in a national referendum on the bailout deal.

Even though he won the hearts and minds of the Greek electorate, Varoufakis' mere presence looked like an obstacle to Greece's further dealings with the EU, and prime minister Alexis Tsipras let him go. In an inflammatory resignation blog post, Varoufakis said "I shall wear the creditors' loathing with pride."

That statement turns out to be typical.

In the Guardian article, Varoufakis says the the German central bank "waterboarded" Greece; that the banking system is a "Global Minotaur" and that German chancellor Angela Merkel can solve the Greek crisis through the equivalent of choosing between a red button and a yellow button. (In Greek legend the Minotaur was a half-man, half-bull creature at the centre of a Labyrinth in Crete. Each year Athens was forced to send seven men and seven women as a tribute to be devoured by the beast.) Here is a taste:

Additionally, Americans were spared the need to contend with a central bank utterly shackled by inner divisions and the German central bank's penchant for treating the worst-hit parts of the union (the eurozone, that is) as alien lands that had to be fiscally waterboarded until they ceased to obey the laws of macroeconomics.

... Europe is disintegrating because its architecture was simply not sound enough to sustain the shockwaves caused by the death throes of what I call the Global Minotaur: the system of neoliberal capitalism centred on Wall Street, extracting tribute from the world after 1971.

It is quite obvious that the insolvency of Madrid and Rome had nothing to do with fiscal profligacy (recall that Spain had a lower debt than Germany in 2008 and Italy has consistently smaller budget deficits) and everything to do with the way in which the eurozone's macroeconomy relied significantly for the demand of its net exports on the Global Minotaur. Once the latter keeled over in 2008, and Wall Street's private cash disappeared, two effects brought Europe to its knees.

Varoufakis also boils Greece's current crisis down to a simple case of Merkel pushing a red or yellow button. In the case of red, "If you press it, chancellor, the euro crisis ends immediately." For yellow, "the situation in the eurozone remains more or less as it is for a decade" but Italy and France follow Greece into a state of semi-insolvency.

Merkel prefers the yellow button, Varoufakis says, because the ongoing crisis has the advantage of keeping interest rates low, making the euro cheap, and boosting German exports.

You can read the full extract from Varoufakis' new book, "The Global Minotaur: America, Europe and the Future of the Global Economy", on the Guardian's website.