The Greek economist urged people to take a stand against the bloc’s propaganda around the currency which was established in 1992 under the Maastricht Treaty. He said the euro has failed to live up to its architects’ aims to strengthen trade, ease potential financial crises, bring about a convergence of living standards, increase price stability and align productivity growth rates between countries.
His remarks came after the EU marked the 20th anniversary of the euro, which is used by more than 340 million people in 19 member states.
Mr Varoufakis, in a column for Project Syndicate part of which is published in Greece’s News 24/7 website, slammed a letter signed by Eurozone finance ministers which hailed the bloc’s “common currency” as a symbol of the unity that underpins the EU.
He wrote: “Without the slightest reference to the monstrous crisis of the euro! It is as if, all these years, we lived on another planet!”
“We all have an obligation to take a stand against this… regime propaganda.”
Greece led a group of countries unable to pay their national debts during the Eurozone crisis sparked by investor fears over sovereign debt in the wake of the 2008 financial crisis.
Athens was bailed out by the EU and International Monetary Fund until 2018 since when Greece has relied on the finance market to meet its needs.
Government sources told Reuters in November that the country plans to borrow £8-10 billion (€10-12bn) this year by issuing short and long-term debt as well as its first ever green bond.
Mr Varoufakis, a former academic who has served as Greece’s Minister of Finance, said none of the promises over the euro have been kept, adding that “maximum” convergence has been achieved between richer countries such as Germany and those EU countries which did not adopt the currency.
Secretary-General of MeRA25, a left-wing political party he founded in 2018, Mr Varoufakis pointed to Sweden-Norway, the US-Canada and Australia-New Zealand as countries which have converged economically by achieving huge investment and trade.
He said: “These countries have converged the most because they have avoided monetary unification.”
To explain why, he compared inflation which he described as being “more or less” the same in Australia and New Zealand, the US and Canada as well as Sweden and Norway.
He said: “And yet: their exchange rates, at the same time, fluctuated explosively. However, it is these fluctuations that acted as shock absorbers in times of crisis, dampening the vibrations, as a result of which they remain on a convergence path.
“The same thing happened between Poland and Germany: When the euro was created, the Polish zloty depreciated by 27 percent. After 2004 it appreciated by 50 percent and, with the 2008 Crash, it depreciated again by 30 percent.
“The result: Poland avoided both [Greece’s] period of fake development (2001-07) and the great collapse (2010) and thus converged more with the German economy.”
Mr Varoufakis concluded Greece requires a new national currency in order to be released from consolidating its debts through measures such as VAT at 15 percent and an energy exchange which rewards oligarchs.