CNBC Transcript: Interview with Yanis Varoufakis, former Greek Finance Minister

Following are excerpts from a CNBC interview with Geoff Cutmore and Hadley Gamble, and Yanis Varoufakis, former Greek Finance Minister.

GC: It does look very much as though Greece has now been left holding the baby, if you like. This move by other states to close their borders and force this problem on Greece, it's unacceptable, isn't it?

YV: It is and it's a manifestation of the disintegration of the European Union. When I heard prominent European leaders call upon President Erdogan of Turkey asking him, demanding that he opens the border of Turkey with Syria to let in the refugees from the war-torn Aleppo and, at the very same time…they were demanding Greece to close its borders with Turkey, or threatening Greece with the closure of its border with Macedonia and the rest of the Schengen area.

What? What exactly are we saying? That we are going to turn Turkey or Greece into what? A large concentration camp for hapless refugees? Is this what has happened to the…soul of the European Union and its spirit? And the fact that we're now spending some money on the refugees is a good thing but you cannot buy back the lost dignity of the European Union.

GC: What would your recommendation be at this point, in terms of how Brussels helps Athens, not only with this, but with getting its economy back on its feet, because as far as I understand, it was still mired in discussions between the EU and the IMF over whether Greece gets a third bailout program and whether it's met the obligations of the one that it's currently under.

YV: It is crucial that we keep the two separate. The refugee crisis, the humanitarian crisis. It's not a Greek crisis. It shouldn't be a Greek crisis. The EU should be a proper union with borders which we control in humane way. When someone knocks on your door, they've been shot at, their kids are dying of thirsty or hungry, you just open your door to them. Europe is rich enough to deal with this crisis. The reason why we're not dealing is because the economic crisis of the last 5/6 years has been causing centrifugal forces to tear us apart. And then, you add the refugee problem to this and you have this monstrous situation.

On the question of the Greek third bailout, the reason why I'm not a minister anymore is because I wouldn't sign it. And why wouldn't I sign it? Because it was not sustainable. We were asked to accept another extend and pretend loan on conditions that cannot be met. So, the fact that the IMF now is squabbling with the Commission, the Commission is squabbling with itself and with the German finance ministry. Everybody is squabbling with Athens and Paris. And you have this mess. This is just a reflection of the fact that we have been extending and pretending a crisis and there is huge denial at the centre of these discussions, of the fact that the Greek program needed a rebooting. A rebooting, however, which the Troika, the three institutions: the IMF, the Commission and the ECB, would not fathom. For political reasons. Because they didn't want to give a signal to the Spanish, the Irish, the Portuguese, that they can possibly, audaciously elect a government that can challenge the rationality of the program applied there. So, it's about time that we face up to reality.

GC: Just briefly on that, do you think Enda Kenny's election result is about the anger still, that the people of Europe – and in this case – the people of Ireland feel about the financial repression they were forced to endure?

YV: It's more than that. It's a rejection of the fake success story. And it's common in Portugal, in Spain, in Ireland. These were the 3 PIGS, if you remember. We were there for the forth. The 3 PIGS that were supposedly – through austerity – capable of extracting themselves from the mire. Those electors didn't buy that. They can see the slow baring recession everywhere. Ireland is a dual economy. There's the Apple/Facebook Ireland and then there's the Ireland of everyone else, those who lost young people to emigration, who are not coming back because their jobs are not there. And they just don't buy the story that through further cutbacks, you can service an unsustainable debt.

HG: Yanis we're here at the Global Financial Forum in Abu Dhabi and I want to ask you what you're up to these days. Are you advising Jeremy Corbyn and if so, who else are you advising?

YV: As I keep saying since September, I did not contest my parliamentary seat in Athens in the September election because I wanted to concentrate on politics. So I'm a full time active politician. As such, I could not be advising another politician. What I do is, I talk to anyone who wants to talk to me, and there are quite a few people. You asked about the British political scene, on both sides of politics, actually on all sides of politics -- the Green party, the Tories and the Labour party, because – we are, I'm convinced of this, I may be wrong, I hope I'm wrong, but I'm convinced of this – we are now at the post-modern 1930 moment, just before the disintegration of Europe. After the financial sector collapse in 1929, which was our generation's 2008.

We need to do that, which we failed as Europeans to do in 1930. And what is that? Democrats, independently of whether they were left wing, right wing, liberal, Marxist, whatever… Greens, we have to bind together and find common solutions to our common predicament. So, I am talking to Jeremy Corbyn because he talks to me, I talk to Norman Lamont from the Conservatives, to Caroline Lucas from the Green Party. This is what we're doing in Europe now: we have this movement that we've started for the purpose of having, at last, a conversation amongst democrats, the purpose of which ought to be to consolidate and to find common program for arresting this slide into an abyss. And we're sliding in to an abyss in Europe.

Just look at what happened in…we used to have a division between the core and the periphery, now there's a division between eastern, former communist countries and western ones, we have divisions within our countries, we have ultra-nationalism, we have fascists. It's about time that we pull together and stop playing little political games with one another.

GC: Let me just nail this down for a moment. Can you confirm, are you receiving any money from the Labour Party for advising Jeremy Corbyn or John McDonnell?

YV: No

GC: Is there a contract, in a business sense, where you give advice to them in return for something else?

YV: Well let me generalise my answer…

GC: No don't generalise, be very specific…

YV: I have no such contract with anyone. Let alone Jeremy Corbyn or the Labour Party.

GC: Ok, so when George Osborne says, "You were recruited because Chairman Mao was dead and Micky Mouse was busy." Or, Cameron says in Prime Minister's Question Time, "Your recruitment means it's, what did he say, Acropolis Now", I think, to paraphrase Apocalypse Now, that movie. And then Tom Blenkinsop says, "Beware of Greeks baring gifts". How do you react to this onslaught because it doesn't seem very polite to you does it?

YV: I don't' mind that. Two things upset me. Firstly, that the country that has given us Monty Python and some of the best comedy in the world is being subject to such low level, un-funny jokes. But more seriously now. It intrigues me that George Osborne should have this foot-in-mouth disease demonstrating in the House of Commons. Think about it, he is facing, he and David Cameron, are facing a referendum. Who is their worst enemy in this referendum? People from their own party. People like Boris Johnson, like Michael Gove, like Michael Howard. They have a very strong intellectual case against the European Union, in favour of Brexit. And, when Boris Johnson, for instance, declared he's going with Brexit, he said quite correctly that Brussels is suffering from a serious lack of democratic controls – he was utterly right.

I am campaigning in favour of Britain staying in. But the intellectual strength of the Johnson, Gove – opposition is very good. Now when George Osborne comes out and pokes fun at me, obviously trying to luxuriate in the fact that I am a defeated finance minister - yes I am a defeated finance minister, but in the hands of whom? Of an arm-clad European Union that decided to asphyxiate us using bank closures, in order to do what? To impose upon us another extend and pretend bailouts. The British people know that.

Does George Osborne really seriously believe that by mocking me, he is doing himself any favours in his intellectual clash with people that have sounder intellect than his? Like Boris Johnson and Michael Gove? I don't think he is doing himself any favours. Two weeks ago, he had another such incident which was more fun when he said that, I believe, that John McDonald and me, we share, we have a similarity -- we've lost our marbles. And I responded to that with a tweet saying that saying, our marbles were stolen George. So he seems to be unable to prevent own goals being scored all the time.

GC: So are you concerned, though, that this bad-mouthing that's taking place and this connecting of Jeremy Corbyn and the Labour Party with you, because you are a controversial character, that this could potentially lose Jeremy Corbyn the next election? Would that concern you?

YV: No, not at all. Whether Jeremy Corbyn will win or not depends on his team's capacity to impress upon the British people that Labour offers them an answer to the greatest problem of the British Isles at the moment, which is very low investment and very low investment in the things that Britain needs. All these austerity campaigns, the fact that most Brits feel that they have been left behind by developments since the great credit crunch. This is only going to be overcome, and Labour is going to ride on the coat tails of optimism that it will be overcome, if the Labour Party can put forward the programme that can convincingly promise a shift of idle savings, and there is a lot of that in Britain, into productive investments. That is where the game is. It has got nothing to do with me. All this banter in the House of Commons is simply diminishing the quality of the debate. And doing those who are arguing in favour of staying in the European Union a great deal of damage. Unfortunately.