Athens, Greece – When Yanis Varoufakis launched the “Democracy in Europe Movement 2025”, or DiEM25, two years ago, he said Europe’s democratic deficit needed to be tackled as a continental problem.

His six-month tenure as Greece‘s finance minister the previous year had convinced him that national governments lacked either the willpower or the clout to change Europe.

“The sovereignty of national parliaments has been dissolved by the eurozone and the Eurogroup,” he said at the time, referring – respectively – to the European Union’s monetary union and the body where its finance ministers meet.

On Monday, Varoufakis announced that he is founding a Greek political party: MeRA25.

This is in keeping with his promise to bring his transnational movement down to the national level in due course, where elections take place.

His goal is to mount a pan-European movement by 2025 that will overturn the European establishment which, in his words, “is becoming ever more toxic, class-oriented, powerless and discredited.”

He still draws energy and bile from those formative months in office, when Greece’s government led by the Syriza, a left-wing party, went up against the country’s creditors in the eurozone and lost.

Varoufakis broke ranks with Syriza in July 2015, after the party capitulated to a third bailout loan with more austerity terms attached.

“What wounded the dream of 2015 was not so much the third memorandum,” he says, using Greek shorthand for the bailout loan.

“It was the sight of its implementation by Syriza – the vision of the left implementing austerity in the name of overcoming it.

“Hearing [current Finance Minister] Euclid Tsakalotos saying that austerity will be chased away by the prosperity austerity will bring is unbearable.”

DiEM25 vision

DiEM25 has fielded Benoit Hamon, the recent socialist presidential candidate in France, and author Lorenzo Marsili in Italy.

The starting gun for a pan-European election went off last year, when French President Emmanuel Macron suggested using the 73 European Parliament seats vacated by British MEPs to launch a new category of transnational MEPs, who will be elected in several EU member states at once.

The EU could thus seek to reclaim its legitimacy as a democratic institution, but it is also an opportunity for the Eurofederalist Varoufakis, who watched the eurozone emasculate the Greek parliament in 2015.

“We watched government MPs vote for measures they say they disagree with, and opposition MPs vote against them saying they will implement them when they come to power,” Varoufakis told the 600-odd people gathered in a theatre in central Athens.

“That’s a comedy farce. But do you know what we’ll do? Even as they convert our parliament into a comedy farce, we shall convert theatres such as this into parliaments,” he said to thunderous applause.

“You cannot have a common coinage without a common foreign and defence policy,” said author Vasilis Vasilikos, a member of DiEM25, reflecting Greece’s current concerns in the Aegean Sea.

“That’s how, ‘Europe’ lost two letters and became just ‘euro’,” he told Al Jazeera. “In 2025, our movement will bear fruit and solve the problem of Europe which is not Greek, but eminently European.”

Austerity has alienated most Greeks from Europe, even though this had been one of the most Europhilic societies since joining the European Economic Community in 1981.

According to the latest Eurobarometer poll, three-quarters of Greeks do not trust European institutions – the highest level in the EU, and higher even than in Britain, which has voted to leave the bloc.

Partly as a result of austerity, Greece lost more than a quarter of its economy over eight years – an unprecedented record among developed economies since World War II.

Unemployment skyrocketed to 28 percent and remains officially at 22 percent.

“I decided to join DiEM25 because I’ve decided it’s time to act,” said an actress who signed up to the party. “We have to form an alternative proposal and put it across in an organised way,”

“I like to think that my friends and coworkers will stop hanging their heads and lowering their eyes, and will be able to regain hope for a better life,” she told Al Jazeera.

What to do about Greece?

DiEM25’s ground zero can fairly be said to be Greece, the eurozone’s only remaining underperforming economy, which continues to vex policymakers and confound predictions of recovery.

Its policies here, perhaps, are most indicative of its thinking for Europe as a whole.

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The party calls for an immediate restructuring of debt, prolonging its repayment period and lowering the amount of money Greece has to spend annually to service it.

Greece currently spends 3.5 percent of its GDP – about $8bn.

Varoufakis suggests a maximum of 1.5 percent. Otherwise, he believes, austerity will recycle itself by depriving the economy of the means to reinvest in itself.

While Syriza ended up signing onto the third bailout loan, with its further austerity measures, Varoufakis says he preferred to declare a unilateral default on debt payments.

With great reluctance, the eurozone succumbed last May to pressure from the International Monetary Fund (IMF) to consider such a debt restructuring.

But it insists on doing it after Greece graduates from its current bailout loan in August, and will not commit to the depth of restructuring that the IMF recommends.

Varoufakis during the presentation of his new party on Monday [Alkis Konstantinidis/Reuters]

Varoufakis doubts whether Greece will ever really graduate, likening the Eurogroup’s talk of “enhanced oversight” after August to the CIA’s euphemism of “enhanced interrogation” practices.

Varoufakis’ more controversial proposal is to create a taxpayer-owned “bad bank” for Greece’s 105 billion euros’ worth ($130bn) of nonperforming debt, and protect primary residences from repossession – a protection Syriza removed in 2015.

His reasoning is that loans should not be called in by banks while people lack the means to pay, and collateral should not be auctioned while real estate remains depressed (Greek property prices have fallen by an average 40 percent during the crisis).

Banks have already embarked on a plan to reduce their nonperforming portfolio by 40 billion euros (around $50bn) by the end of next year, through a combination of collections, liquidations, sales and write-offs.

Liquidations, controversially, are to amount to 11.5 billion euros ($14bn) and include primary residences.

Varoufakis’ plan would spare those properties, but he did not detail what the cost of such a solution would be to the taxpayer.

Varoufakis also proposes stimulating growth by lowering sales and corporate tax on small businesses, both of which have steadily risen through Greece’s eight-year depression; but he did not provide details of how the lost revenue would be made up.

Greece is projected to grow by 2.4 percent this year, more than it has in a decade, but expectations of 2.7 percent growth last year were bitterly disappointed; the finance ministry’s current estimate of last year’s performance is 1.4 percent.

The lack of any reaction from Greek politicians to Varoufakis’ descent on the political scene suggests how unthreatened they feel.

Two other Syriza cabinet members who thought Greece should leave the eurozone and unilaterally stop servicing its debt formed a splinter party to contest the September 2015 election.

They received 2.86 percent of the vote and did not enter parliament.