What the hell happened to Europe? Reflections on Varoufakis’ rant and the reality we face

Yanis Varoufakis is one of Europe’s most recognizable political provocateurs. An economist, former Greek finance minister, and co-founder of the Democracy in Europe Movement (DiEM25). He rose to international prominence during the Greek debt crisis in 2015, when he challenged the European Union’s austerity agenda head-on and became, for many, a symbol of resistance against technocratic control. Since then, he has positioned himself as a fierce critic of both neoliberal capitalism and the failure of the European left to offer a coherent alternative. As a matter of fact, in a fiery and theatrical speech, Yanis Varoufakis declared the European dream officially dead. Once imagined as a union of shared prosperity, peace, and dignity, Europe, he argues has decayed into something unrecognizable: a technocratic, authoritarian war machine, hijacked by elites and abandoned by the people. His tone was both accusatory and self-critical, offering not just condemnation of the establishment but also an admission of his own political movement’s failures.

For Varoufakis, the core of Europe’s unraveling lies in its refusal to democratize. Austerity policies have devastated working people, while quantitative easing has inflated the wealth of the few. Inequality has surged, and democracy has been hollowed out. Across the continent, he sees a dangerous convergence between radical neofascists and authoritarian centrists, two camps feeding off the same crises, reinforcing each other while squeezing out genuine democratic space. The result, in his eyes, is a continent lurching toward totalitarianism, where dissent is criminalized, media is censored, and power is concentrated in the hands of a detached elite.

He is equally unsparing toward the left, including his own organization, DiEM25. Varoufakis admits that they focused too heavily on abstract symbols like allowing people to choose pronouns on their website, while failing to build real alliances with workers, nurses, and the precariously employed. Their ambitious Green New Deal was watered down, co-opted, and ultimately rendered meaningless. The movement missed the moment, and in doing so, left a vacuum that has been filled by the far right.

Despite the bleak diagnosis, Varoufakis offers a sweeping alternative vision. He calls for Europe to exit NATO immediately, arguing that the alliance no longer serves the continent’s interests. Instead, he envisions a non-aligned, but never neutral Europe, one that can engage in diplomatic negotiations with both Russia and China. Ukraine, in his plan, should become a neutral buffer state akin to Cold War Austria; sovereign, democratic, and free of external military alliances.

He advocates for a green transformation of the economy that rejects military Keynesianism in favor of public investment in sustainability and degrowth. In terms of economic justice, Varoufakis proposes what he calls a “monetary commons”, a public infrastructure for creating and distributing money, bypassing private banks and replacing debt-driven growth with shared prosperity. At the heart of this vision is a universal dividend, a kind of basic income for every citizen, funded not through taxes or borrowing, but through the public issuance of new digital money. The logic is simple but radical: if private banks can create money out of thin air when issuing loans, why should not democratic institutions be able to do the same, this time for people, not profit?

But this idea, while thought-provoking, raises urgent and difficult questions. Who, exactly, decides how much money is created, and on what basis? Should it be parliaments, citizens’ assemblies, or a new kind of public monetary authority? Should distribution be equal and universal, or targeted to need? And how do we ensure that such a system remains accountable, stable, and resistant to corruption or short-term populism?

Supporters of the monetary commons argue that inflation and misallocation are not unique to public money creation; our current system already creates money irresponsibly, just through banks and markets. They propose tying new money creation to real economic needs: green infrastructure, housing, education, care work. Some even suggest using algorithmic tools or smart contracts to enforce transparent rules and limits. But critics point out that putting the printing press in the hands of public institutions, no matter how well-intentioned, risks repeating the same mistakes under a different guise. If money is treated as a commons, then governance becomes the linchpin, and history offers few models of monetary governance that are both democratic and durable.

The idea of a monetary commons forces a deeper reckoning: not just with how money works, but with who gets to decide. That makes it one of the most provocative and perilous proposals in Varoufakis’ speech.

His criticism of Europe’s energy policy also lands with force, though it points to a different kind of failure than he emphasizes. Europe is almost uniquely resource-poor. Unlike the United States, which is energy-rich with oil and gas, or Russia with its vast fossil fuel reserves, or China with its control of coal and rare earths, the European Union relies heavily on imports. The grand talk of energy sovereignty rings hollow when Europe continues to import oil and gas from overseas, having abandoned nuclear power and failed to build alternatives at scale. A true green transition must involve investment in advanced technologies, including nuclear fission, if the continent is serious about energy independence. The EU was founded as the European Coal and Steel Community, its very origin was tied to resource control. That strategic logic has been lost.

Where Varoufakis sees “military Keynesianism” as a dangerous turn, the deeper issue may be that Europe has long neglected military investment altogether. For decades, it relied on the United States for its defense under the NATO umbrella, convinced that global markets and shared prosperity would make war obsolete. Now, as geopolitical tensions mount, Europe finds itself underpowered and overexposed.

His critique of identity politics also reflects a growing frustration. While other powers were building tanks, tech infrastructure, and energy security, Europe often retreated into debates that felt increasingly detached from material concerns. There is, of course, value in fighting for social inclusion and dignity, but the imbalance became stark. While the world grew more volatile, Europe’s elites often seemed more concerned with woke culture than strategic readiness.

On migration, Varoufakis argues that Europe must abandon its fortress mentality and instead welcome newcomers not just out of solidarity, but out of self-interest, insisting that Europe will “die” without mass migration. But this, too, veers into oversimplification. It is true that Europe faces a looming demographic crisis. Aging populations, low birth rates, and shrinking workforces pose real long-term risks. However, uncontrolled migration without a viable integration plan is not a solution, it is a recipe for social and political backlash. Accepting large numbers of people without the ability to offer them meaningful employment, education, or cultural inclusion is not compassionate but rather reckless. Migration policy must be rooted in realism: it requires labor market alignment, language support, urban infrastructure, and a functioning civic framework. Otherwise, the very idea of “welcoming” newcomers risks producing instability, resentment, and marginalization for all involved.

Varoufakis also takes aim at Big Tech, calling for aggressive action against what he sees as the rise of “technofeudalism.” In his view, corporations like Amazon, Google, Uber, and Airbnb have entrenched themselves in the European economy while avoiding taxes, undermining labor protections, and capturing markets. He proposes immediate sanctions on figures like Elon Musk, Jeff Bezos, and Peter Thiel, along with blocking these companies’ access to European markets unless they submit to local regulation and taxation. He even suggests that Europe should develop its own socialized alternatives to cloud infrastructure and impose interoperability standards to break their monopolistic control.

Here, for once, his provocation aligns with policy sense. Europe has become deeply dependent on non-EU tech giants, many of which pay minimal taxes while extracting enormous value from European users and infrastructure. It is entirely reasonable to demand that these companies contribute fairly to the societies in which they operate. Taxing non-EU digital platforms is not just a question of fairness, it is a matter of sovereignty. Just as importantly, Europe must invest in developing its own digital champions: competitive, innovative tech firms that can anchor a homegrown ecosystem. The goal should not be digital protectionism, but digital independence, reclaiming control over infrastructure, data, and innovation capacity. This will require coordinated policy, patient capital, and a long-term industrial strategy. It is one of the few areas where Varoufakis' rhetoric, when filtered through a pragmatic lens, points in the right direction.

One proposal in particular deserves clear rejection: the idea of dissolving NATO. It is not just unrealistic, it is geopolitically dangerous. With Russia actively invading a neighboring country and the United States’ commitment to European security growing less certain, NATO remains one of the few structures preserving deterrence. If anything, Europe should be working toward greater self-reliance within NATO. A European army, coordinated, funded, and interoperable with NATO forces, offers a serious alternative to full dependency on Washington without abandoning collective defense. This path strengthens Europe’s autonomy without isolating it from its democratic allies.

Europe needs reinvention. But it must be grounded in strategic realism. That means investing in nuclear power, domestic manufacturing, and digital sovereignty. It means preparing for a future where UBI is not an ideal but a necessity. It means defending free speech and civil liberties while also rebuilding economic and military resilience. These are not contradictions, they are the foundation for a Europe that can survive and lead.

Utopian dreams alone will not save Europe. But realism without vision will not inspire it either. The challenge ahead is to strike the balance: to defend democratic values while rearming Europe's capacity to act. Only then can the dream be revived, not as nostalgia, but as a future worth building.