Yanis Varoufakis argues that Europe’s centre-left has become so compromised by its pursuit of power and willingness to accommodate financial and political elites that it risks destroying the political alternative it was created to represent.
In an essay published by UnHerd on September 26, the former Greek finance minister reflects on his own experience in government and argues that the centre-left’s repeated compromises can eventually become a form of political surrender.
When does compromise become surrender?
Varoufakis begins with a question that, he says, troubled him when he entered government: how can a politician compromise in order to deliver tangible improvements without becoming “compromised” in the process?
Drawing on his experience as Greece’s finance minister in 2015, he recalls meetings with senior European politicians during the debt crisis. He contrasts Germany’s conservative finance minister Wolfgang Schäuble with centre-left figures including France’s Michel Sapin, Germany’s SPD leader Sigmar Gabriel and members of the German Greens.
According to Varoufakis, Schäuble’s positions were often harsh but at least openly expressed. By contrast, he describes his centre-left counterparts as politicians who privately expressed sympathy for his opposition to austerity but adopted very different positions when speaking publicly.
For Varoufakis, the problem was not simply that they disagreed with him. It was what he saw as a lack of conviction behind their positions.
How finance reshaped the centre-left
Varoufakis traces what he describes as the centre-left’s long decline back to the collapse of the Bretton Woods monetary system in the early 1970s.
He argues that European social democrats once acted as intermediaries between industrial businesses and organised labour, negotiating arrangements that helped finance welfare states while improving workers’ wages and conditions.
The end of Bretton Woods, he argues, shifted economic power away from industry and towards the financial sector. As trade unions weakened and traditional industries declined, politicians increasingly had to negotiate with banks and financial markets rather than industrial employers.
Varoufakis identifies Tony Blair in Britain, Jacques Delors in France and Brussels, and Gerhard Schröder in Germany as examples of politicians who, in his view, helped establish this new relationship between social democracy and finance.
He argues that the model survived until the 2008 financial crisis, when centre-left governments responded to the collapse of the banking system by rescuing financial institutions while imposing austerity on much of the population.
Varoufakis says the result was a political vacuum in which social democracy increasingly lost its credibility.
The lesson he says he learned from Thatcher
The essay then turns to an encounter Varoufakis says he had with a fellow student activist named Fiona at Essex University in the early 1980s.
At an anti-Margaret Thatcher gathering, Varoufakis recalls, Fiona argued that the Left should not merely defend the existing system against Thatcherism. Instead, it needed its own transformative political project.
Varoufakis says her argument stayed with him decades later. It helped explain why he sometimes found conversations with conservative politicians more meaningful than those with centre-left politicians who, in his view, had abandoned any clear ideological or political project.
He argues that an unambiguous conservative government can at least provide the Left with a clear opponent. A compromised centre-left government, by contrast, risks creating false expectations among voters before failing to deliver meaningful change.
That disappointment, Varoufakis argues, can ultimately strengthen populist and far-right movements by leaving voters distrustful of both mainstream political camps.
Varoufakis turns his argument on Andy Burnham
The argument is particularly relevant, he says, to Britain’s new government under Prime Minister Andy Burnham, who took office on July 20, 2026.
Varoufakis argues that Burnham’s government risks repeating the mistakes of previous centre-left administrations if it avoids confronting what he describes as the economic interests responsible for Britain’s stagnation.
He predicts that another failure to meet voters’ expectations could create further space for the radical Right. He names Reform and other potential successors or rivals on the Right as examples, while stressing that the eventual political outcome remains uncertain.
The British government, meanwhile, has presented Burnham’s agenda as a break with previous economic policies, including greater public control over essential services, reindustrialisation and a stronger role for regional government.
Why Varoufakis left Greece’s government
Varoufakis ultimately connects his argument to his resignation as Greece’s finance minister in 2015, six months after entering government.
He says the decisive moment came when he was effectively presented with a choice between preserving his political career and accepting a new austerity programme attached to further financial assistance for Greece.
He refused to sign.
Varoufakis argues that this was the point at which the abstract question of compromise became clear to him: there are circumstances in which retaining political power is less important than refusing an agreement that, in his assessment, would damage the country’s future.
He says the subsequent collapse of Syriza and the rise of the Right illustrate the dangers of a centre-left movement that loses its political identity.
For Varoufakis, the answer is not for the Left to abandon its ambition to govern. Instead, he argues that it should be prepared to remain in opposition until it has developed a credible programme capable of challenging established economic power without sacrificing its principles.
His central argument is that giving up power can sometimes be preferable to compromising on what he sees as the fundamental interests of the people a political movement claims to represent.
Be First to Comment