Yanis Varoufakis sounds EU alarm – warns bloc unity to shatter when Merkel replaced

Yanis Varoufakis addresses financial issues with the EU in 2018

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Speaking to the German and Hellenic Society of the London School of Economics, the former Greek finance minister warned the bloc’s economic recovery project to combat the effects of the coronavirus pandemic will be nothing less than another blow to poorer families in Germany.

Mr Varoufakis claimed the Recovery Fund, which aims with grants and loans to help member states recover from the economic slumps caused by Covid, will serve as a wake-up call for Angela Merkel’s successor on the inviability of the EU economic unity.

He said: “Poor Germans are going to be paying for Greek oligarchs or companies that operate in Greece.

“That is not an auspicious sign regarding political union.

“Very soon you’re going to have the next Chancellor in German saying ‘hang on a second, where is this money going?’.

“The idea that this is going to be a first Hamiltonian step for me is pie in the sky.”

It comes as European Commission President Ursula von der Leyen on Monday urged member states leaders to “make good use” of the EU’s Recovery Fund.

She said: “Seven European countries, including Portugal, have already ratified the Own Resources Decision – that is how we will fund NextGenerationEU.

“And I encourage all of you to do the same, as a matter of urgency. Because only with a ratified Own Resources Decision can we put fuel in the recovery. And the people of Europe cannot wait.

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“Our collective future is now entirely in your hands – the hands of the parliaments in Europe.”

She continued: “The next step will be to bring NextGenerationEU into life in each of your countries.

“Europe is providing every Member State with a unique opportunity to kind of restart its economy. It is up to you to seize this opportunity.”

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The Commission leader admitted “we are not yet where we would like to be in combating the virus”, adding that the EU’s new HERA Incubator will serve as an extra tool to come out of the pandemic.

She concluded: “I have no doubt that Europe will recover.

“All countries, big and small, at the four corners of our continent will recover from this health crisis together.

“And when all 27 will have ratified the Own Resources Decision, kind of new oxygen will flow into our economy. NextGenerationEU is for all of Europe. And all of Europe will share in its success.

“In every capital, in every government and parliament across our continent.

“In other words: Europe needs all of you, all of us. Europe will be what we want it to be.

“So let us all get to work.”

Mrs von der Leyen’s call to EU leaders followed a concerning warning coming from European Parliament President David Sassoli who claimed that under the current governance rules of the bloc, 25 out of 27 member states would be hit by sanctions next year.

Mr Sassoli said the crisis brought about by the pandemic was a direct result of an economic system based on the maximalist exploitation of resources.

He claimed the health and economic crisis crippling the bloc highlighted, more than ever, the unsustainability of the EU’s economic model.

He called for a rethink of the economic governance instruments to help the EU’s economic recovery and transformation.

He said: “Given the situation, 25 out of 27 member countries risk an excessive deficit procedure, which would be a negative sign.

“I believe that the opening of procedures would be a negative signal for the very credibility of our rules.”

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