A U.K. exit from the European Union would open the door to an “avalanche of requests for opt-outs” of the union, and a so-called Brexit would not leave the U.K. immune to the implications of a further deterioration of the EU, warned Yanis Varoufakis, former Greek finance minister.
Speaking at the Pensions and Lifetime Savings Association investment conference Friday in Edinburgh, Mr. Varoufakis said both sides of the Brexit debate need to “stop thinking of the European Union as a given.” He said the problem is “both sides of this political debate in Europe are assuming that Europe is a constant. … The European Union is disintegrating, ladies and gentlemen, as we speak. My problem with Brexit is that it would speed up the disintegration, and that disintegration would cause a vortex in the heart of the Continent, from which Britain cannot escape, whether it is in or out.”
He said an exit by the U.K. would trigger “an avalanche of requests for opt-outs … that may make sense individually, but are collectively catastrophic.”
Mr. Varoufakis also shared his views on the euro.
"No one understands or believes more fiercely that the euro was a very bad idea than I do. And yet I am not driven to the conclusion that we should do away with it. I believe in the 'Hotel California' dictum — that you can check out any time you like, but you can NEVER leave. Or you cannot leave without catastrophic consequences.”
A disintegration of the euro, deciding to “do away with it,” would cause a “huge fault line” leaving Germany, Holland, Austria, Finland, the Baltics, and probably Hungary, the Czech Republic and Poland, to join a new “deutsche mark zone,” whose currency would appreciate and many of those on low wages would become unemployed, former workers, Mr. Varoufakis said. “This is a terrible development for Europe, especially when, on the other side of the fault line, what you are going to end up with is a stagflationary” union — “or disunion” — with high inflation and unemployment. “Does Britain want to live in that environment? You cannot escape that, no one can escape this post-modern version of the 1930s,” he said.