Greek game theorist Yanis Varoufakis to advise Corbyn's Labour Party

Marxist economist Yanis Varoufakis, who previously accused EU creditors of financial terrorism, will advise the Labour Party on how to challenge the Tories’ austerity policies, Jeremy Corbyn has revealed.

The former Greek minister for finance had resigned from Greece’s left-leaning Syriza party in 2015 over the terms of Athens’ third Troika (IMF-ECB-EC) bailout package.

The controversial deal demanded further austerity at the height of Greece’s financial turmoil, and was branded unsustainable by economists worldwide. Varoufakis, who is now a professor of economics theory at the University of Athens, accused EU creditors of ruthless manipulation at the time.

Anti-austerity advocate

Veteran socialist Jeremy Corbyn has sought to rekindle Labour’s founding ideals since taking the helm last year, much to the annoyance of the party’s center-right factions.

Speaking to the Islington Tribune on Sunday, the Labour leader said Varoufakis had already met with Shadow Chancellor John McDonnell.

“Varoufakis is interesting, because he has obviously been through all the negotiations [with ECB, European Commission and the International Monetary Fund],” he said.

“I realize we’re not in the Eurozone but it’s a question of understanding how we challenge the notion that you can cut your way to prosperity when in reality you have to grow your way to prosperity. I think the way Greece has been treated is terrible and we should reach out to them.”

Varoufakis is a leading anti-austerity voice on the European stage, and is at the forefront of a movement to democratize Europe dubbed DiEM25. The newly launched campaign is calling for an assembly to be created to roll out a new EU constitution that will replace all existing EU treaties by 2026.

'The EU is disintegrating'

Speaking to the London School of Economics (LSE) last week, Varoufakis said the European Union is unraveling.

“Schengen is being suspended. The Eurozone is in an advanced state of deconstruction. Eastern European governments are openly stating their opposition to the principle of solidarity. The British electorate has become alienated from Brussels and might only vote to stay in out of fear of what would happen if it left,” he said.

“The only thing that can put an end to this inexorable slide toward catastrophe is a surge of democracy that gives hope and stabilizes Europe.”

Varoufakis branded UK Prime Minister David Cameron’s recent deal with Brussels a failure, and called for a Europe characterized by transparency and progressive policy-building. 

However, he also criticized the Euroskeptic view that Britain is better off out of the EU, arguing that the UK cannot exit the bloc without exiting the single market.

“I have a lot of respect for Tory Euroskeptics with a Burkean view of the sovereignty of national parliaments,” he said.

“The problem is that they also support staying in the single market. This is an incoherent proposition: it’s impossible to stay in the single market and keep your sovereignty.”

Varoufakis called on Brits to vote strategically on June 23, the date of Britain’s ‘In/Out’ EU referendum.

“Neither withdrawing into the safe cocoon of the nation state, nor giving in to the disintegrating and anti-democratic EU, represent good options for Britain,” he said.

“So instead of seeing the referendum as a vote between these two options, and these two options alone, the UK needs a third option: to vote to stay in the European Union so that it can fight tooth and nail against the EU’s anti-democratic institutions.”

'Dead end policies'

Commenting on Friday's general election in Ireland, Varoufakis said that the Irish electorate had rejected the outgoing coalition’s “dead end policies.”

“The old regimes of ‘Bailoutistan’ that were put in place by the troika, or by their acceptance of the troika programmes, have collapsed in every country where we had an election during the last twelve months, beginning with Greece, then Portugal, Spain and now Ireland," he said.  

“The old regime is dead but the new regime is refusing, or struggling, to be born and a coherent alternative to this failed sequence of programmes has not emerged.”

Corbyn has long been concerned about the ECB’s power and influence on the European stage.

Speaking after a meeting with Greek PM and anti-austerity advocate Alexis Tspiras, the Labour leader said:“We both want to see an economic strategy around anti-austerity, and we’re both very concerned about the activities and power of the European Central Bank, although Britain is not in the Eurozone and isn’t likely to be.” 

News of Varoufakis’ advisory role with Labour surfaced as ex-Channel 4 journalist and anti-austerity campaigner Paul Mason announced plans to take part in the party’s economic lecture tour. The series of free public seminars, which kicked off in January, was orchestrated to challenge the pro-austerity narrative peddled by the Conservative Party and create a platform for alternative economic policies geared towards sustainability and social equity.