Europe - the 'laughingstock of the world’

Greece finds itself at yet another standstill, with a mass strike underway as IMF inspectors pay another debt-settling visit to Athens. But “resorting to the IMF” is not a productive method of settling the crisis, economist Yanis Varoufakis told RT.

­Some 12,000 people took to the streets in central Athens in two rallies organized by the Greek Communist Party and the General Confederation of Greek Workers, marching peacefully to the parliament and then dispersing.

A team of EU and IMF inspectors resumed negotiations with Greek officials over what steps Athens needs to take in order to secure another bailout payment – and avoid default on an $18.6 billion bond repayment due March 20.

To reduce its debt, Greece also attempted to negotiate an extended-repayment bond issue deal with private investors, but the talks stalled over a disagreement on interest rates.

Investors, however, reiterated their commitment to an agreement on a voluntary debt exchange, and confirmed that they would return to Athens on Wednesday to resume discussions.

Meanwhile, the International Monetary Fund estimated that countries around the world will need about $1 trillion in loans in the coming years. The IMF said it aims to raise up to $500 billion for new loans, including $200 billion already promised by European countries.

Yanis Varoufakis, a professor of economics at Athens University, told RT that Greece is holding talks with private investors as a part of a deal with the EU and IMF.

“The idea was to write down part of the debt through this PSI [private sector investors] haircut in order to allow Germany and the EU in general to bring themselves to paying the money necessary for Greece to meet its obligations,” Varoufakis said.

“Nothing that happens in Greece makes any difference, because all the important decisions are reached in Brussels, in Frankfurt, in Paris, in Berlin,” he added. “Whether Greece will default depends ultimately on the official sector – the European Union and the IMF.”

Varoufakis says any money Greece receives “will only be used in order to repay banks.” So instead of racking up new Greek debt, he says, it would make much more sense to let Greece default within the Eurozone.

“And then the official sector could directly recapitalize the banks, which would make much more sense,” he explained. “But sense is not the drawing card these days – for the last two years – in the European Union.”

“The Europeans have failed to put their house in order,” Varoufakis added. “They have failed to come up with a plan to deal with the cohabiting crisis with the banking sector on the one hand, and the member states of the Eurozone. We have resorted to the IMF. This is a tragedy.”

“We, Europeans, turned ourselves into the laughingstock of the world,” he concluded.