Podcast Summary:

UnHerd with Freddie Sayers
Episode: "Should Europe seize Russian assets? Is a crypto crisis looming?"
Release Date: October 29, 2025
Guests: Yanis Varoufakis (economist, former Greek finance minister), Wolfgang Münchau (journalist, Director of Euro Intelligence)
Host: Freddie Sayers

Main Theme and Purpose

This episode brings together economist Yanis Varoufakis and journalist Wolfgang Münchau to scrutinize two prevailing orthodoxies:

1. The European Union's move to seize Russian state assets to fund Ukraine’s war and recovery.
2. The belief that cryptocurrency (crypto) democratizes money and protects it from abuse by central banks and big finance.

Both guests debunk conventional wisdom in these areas, highlighting the legal, economic, and geopolitical risks of Europe’s new financial strategies and the mythologies and dangers of the crypto universe.

Key Discussion Points and Insights

1. Seizing Russian Assets: The Legal and Political Gamble

(Segment: 02:12–23:47)

Background

• The EU is considering using ~€200 billion of frozen Russian central bank assets, held in Euroclear in Brussels, to finance support for Ukraine.
• The U.S. has scaled back Ukraine funding, leaving Europe searching for new sources.

Legal and Economic Risks

• Wolfgang Münchau (03:12): Asserts that using these assets is "legally questionable, but economically and geopolitically self-defeating."
• Governments are seeking ways to make this legal (e.g., through special purpose vehicles to issue eurobonds using the Russian money as collateral), but the underlying risks will likely fall to European taxpayers.
• Quote, Wolfgang Münchau (06:18):
  "What appears to be a solution to a financial problem will ultimately come to haunt the Europeans, both politically and economically... the European taxpayer is ultimately liable."
• The arrangement masks true liabilities, similar to the 2008 subprime crisis, and could destabilize faith in EU financial guarantees.

Political Dynamics & Peace Prospects

• Yanis Varoufakis (07:12): Points out that reparations typically follow military defeat; seizing assets without a Russian surrender undermines future negotiations.
  • Quote (07:37): "By insisting on reparations when there is no prospect of forcing him into a bunker, Europe is essentially working against any realistic peace plan."
• If a peace deal is eventually reached, the EU may have to return the assets or compensate for them—thus, taxpayers pay.
• Wolfgang Münchau (11:29): Special Purpose Vehicles disguise the reality: "If Ukraine doesn't repay... This is a loan that will default, like a subprime loan."

Wider Geopolitical Implications

• The move could weaken EU credibility in diplomatic negotiations.
• Europe is not willing to fund Ukraine's defense "properly" through real debt or shifted budgets, relying instead on questionable financial mechanisms.
• Analysis that ongoing support for Ukraine may falter on these unstable financial grounds.

Strategic and Economic Blind Spots

• Both guests criticize Europe’s lack of strategic foresight—particularly in underestimating Russia’s economy and military-industrial capacity.
• Wolfgang Münchau (19:06): Warns that Russian military spending is more effective due to purchasing power, and that EU leaders’ policies often lack strategic direction.

Democracy, Sovereignty, and NATO

• Yanis argues Ukraine’s right to join NATO is not absolute; draws an analogy with hypothetical Chinese missiles in Mexico (16:02).
• Neutral states can be liberal and democratic; conflating NATO membership with democracy/sovereignty is fallacious.

Memorable Quotes

• Varoufakis (15:08): "NATO and the European Union are not helping Ukraine. They are leading it down the garden path."
• Münchau (21:31): "The sequestering of the assets is one of these short-sighted moves. It's not going to help, it's not going to solve the conflict."

2. Crypto and Stablecoins: Democracy or New Oligarchy?

(Segment: 26:11–51:09)

Crypto’s Founding Ideals and Dystopian Reality

• Yanis Varoufakis (26:11): Crypto promised to "empower individuals to wrest power away from the big banks and central banks."
• Reality: Big Finance has instead captured crypto, transforming it into a "weapon for extracting rents."
• The innovation of blockchain is lauded, but its monetary application is critiqued.

Stablecoins: The Real Danger

• Stablecoins (crypto tokens pegged to fiat currencies like the US dollar) are identified as particularly threatening.
• Varoufakis (28:53): "Stablecoins are to the original crypto mission what Napoleon was to the French Revolution: a despotism hiding behind beautiful cries for liberty, equality and fraternity."
• Recent U.S. legislation (GENIUS Act, Clarity Act, anti-CBDC Surveillance State Act) turbocharges risk: stablecoins become tools of U.S. deficit spending, but with no rescue mechanisms from central banks when they fail.

Financial Instability Risks

• Wolfgang Münchau (30:22): Stablecoins are "another way of borrowing money," hiding credit risks like the subprime crisis.
• Collapse of major stablecoins could trigger major financial disruptions, with central banks denied the tools to respond (due to anti-CBDC laws).

Separating Blockchain from Crypto Mania

• Both guests agree blockchain can empower communities when used outside of money.
• Bitcoin and similar cryptocurrencies seen as speculative "bets on debasement," not macroeconomically significant unless used as collateral for wider lending.
• Varoufakis (32:51): Blockchain is "one of the great successes of the human spirit," but speculative cryptocurrencies should not expect bailouts.

The U.S. Hegemony via Stablecoins

• The U.S. administration is using stablecoins to offload debt to foreign holders (e.g., Japan, Germany), keeping the dollar dominant and lowering Treasury yields.
• Varoufakis (36:12): "It is a system designed to enhance and turbocharge financial instability... like taking the shock absorbers out of your car and driving into a pothole."

Europe’s Weak (and Self-Sabotaging) Response

• The EU lags in providing a digital euro due to commercial banks’ lobbying power, which blocks effective digital solutions.
• Münchau (39:03): "Dependency is a political choice... We could have created the euro as a rival to the dollar."
• Varoufakis (43:41): Even the ECB wants a digital euro but is blocked by Frankfurt and Paris banks who fear deposit competition and lobby hard to cripple the project.

Regulatory and Structural Hurdles

• European Parliament’s opposition is viewed as secondary to bank influence.
• Regulatory constraints will make the digital euro less competitive than US stablecoins; banks seek to protect their rent-extracting power.

Personal Anecdote: Greek Blockchain Plan

• Varoufakis recounts his attempt to use blockchain for Greece’s fiscal crisis to create transparent mutual debt cancellation accounts—blocked by Brussels and Frankfurt to maintain external leverage over Greece.

Systemic Oligarchy and Blocked Reform

• Both see the EU as fundamentally structured to serve big banks and industry, not consumers or the common good.
• Münchau (48:53): "The EU was created as a lobbying organization for companies... There is very little lobby for the common interest."
• Missed opportunities noted, such as failure to make the euro a true global currency; strategic thinking is continually lacking.

Memorable Quotes and Moments

• Varoufakis (07:37): "By insisting on reparations when there is no prospect of forcing him into a bunker, Europe is essentially working against any realistic peace plan."
• Varoufakis (28:53) compares stablecoins to Napoleon co-opting the French Revolution.
• Münchau (39:03): "Dependency is a political choice. We could have created the euro as a rival to the dollar."
• Varoufakis (46:49): "It is not just irrationality that springs out of a bureaucratic mindset. The bureaucracy works in the interests of the big banks. So it’s motivated irrationality."

Important Timestamps

• 02:12 – Wolfgang lays out his case against seizing Russian assets.
• 07:12 – Yanis critiques the reparations position and highlights negotiation pitfalls.
• 11:29 – The mechanics and risks of the EU's special purpose vehicles.
• 15:08 – Yanis: Europe leads Ukraine "down the garden path."
• 26:11 – Transition to crypto: the myth of democratization.
• 28:53 – Powerful metaphor: Stablecoins as "Napoleon" to revolution.
• 32:51 – Differentiating blockchain, crypto assets, and stablecoins.
• 36:12 – How stablecoins fuel US deficit and global instability.
• 39:03 – Why Europe is vulnerable: dependency and the euro’s lost potential.
• 46:49 – Varoufakis personal anecdote: blockchain proposal for Greece’s fiscal crisis.

Tone and Style

The speakers’ tone is incisive, skeptical, and occasionally wry. Varoufakis is polemical and metaphorical, Münchau is analytical and pragmatic but equally critical of policy orthodoxy. The discussion is lively and sharply critical of both EU and US monetary strategies, with a marked dismissal of technocratic and financialist "sleights of hand."

Conclusion

Varoufakis and Münchau take aim at two modern financial orthodoxies, exposing the illusory and dangerous nature of using Russian money to fund Ukraine and the myth of crypto liberating society from financial oligarchy. Their consensus: both the current banking system and the crypto sector are distorted by entrenched interests and wishful thinking—Europe in particular is undermined by strategic weakness, captured institutions, and a dangerous reliance on financial tricks.

(51:09)
Yanis Varoufakis closes:
“Our mission as econoclass: debunk the idea that crypto is democratizing money, and that the current banking system serves the many. Both need to be shattered.”