Preserving his reputation for combativeness, Yanis Varoufakis chastised eurozone governments for failing to honour their promises and rubbished reports that he would no longer be participating in negotiations to avert the bankruptcy of Europe’s most indebted state.
Speaking to reporters as he arrived for work on his motorbike, Varoufakis said: “When we shake hands and say this means A and not B, it means A and not B. Unfortunately, the other side has not shown such an attachment to keeping its word. It seems that in Europe we all need to try more to restore confidence.”
After three months of turbulent talks, and with cash reserves running perilously low, Greece’s leftist-led coalition reshuffled its negotiating team on Monday.
In a move that was interpreted as the beginning of the finance minister’s political demise, it was announced that the British-educated economist, Euclid Tsakalotos, would be the pointman between Athens and foreign lenders at the EU, the European Central Bank and the International Monetary Fund.
But asked if the government’s move would mean he would be less visible, Varoufakis shot back with a rhetorical: “The finance minister? The man who is responsible for the political negotiating group?”
Greece’s eurozone creditors, however, are hopeful the reshuffle will make a difference. “It should be helpful,” said an EU official involved in the negotiations with Greece. He ascribed the apparent sidelining of Varoufakis to the fiasco in Latvia last Friday when several eurozone countries roundedon the Greek finance minister, who then made matters worse by tweeting about being the target of eurozone “hatred”.
In Brussels the new team named by the Greek prime minister, Alexis Tsipras, was viewed as “moderate” and “sensible”. Officials welcomed the greater involvement of Giorgos Houliarakis , an ally of the pragmatic deputy prime minister Yannis Dragasakis. Houliarakis has been involved in much of the talks with the so-called “Brussels Group” of financial technocrats doing the spadework on the conditions for resuming lending to Greece. Athens is seeking a life-saving €7.2bn in further funding before seeking a third bailout this summer.
Regardless of the substance of his arguments, Varoufakis has been deemed a disaster in the negotiations by his counterparts. What started as a clash between a new leftwing anti-austerity government in Athens and German fiscal hawks in February quickly spread into Greek isolation ranged against the other 18 countries of the eurozone, largely because of what was seen as know-it-all grandstanding by Varoufakis.
“They made every mistake in the book,” said a senior EU diplomat. “They solidified eurozone opinion behind the Germans. Everything that Varoufakis has done has been calculated to alienate.
However, Tsipras voiced support for Varoufakis on Monday, describing him as “an important asset” for his Syriza party-led administration. A passionate opponent of austerity, Varoufakis has set the agenda for bailout talks since the radical leftists assumed power in January.
“I will admit that there is a negative climate,” Tsipras said. “Yanis Varoufakis is an important asset for the government and the country. He has annoyed [people] because he speaks the language of finance ministers, of economics, better than they do.”
Now that negotiations were in their final phase, criticism was only to be expected, Tsipras said. “Now that we are in the final stretch, we need to reorganise our teams in order to have full control and the best effectiveness possible,” he said.
Government insiders insisted the reshuffle was tantamount to window-dressing, aimed at placating the bodies that had blamed Varoufakis for the lack of headway.
Among those critics were the head of the eurogroup of eurozone finance ministers, Jeroen Dijsselbloem, and the European Central Bank. The ECB was also singled out for criticism by the Greek premier.
Greece’s pressing liquidity problem, he said, had been exacerbated by the ECB’s “politically and ethically unorthodox” decision to prohibit the country issuing short-term government debt.
On Tuesday Dijsselbloem hit back saying Athens should not have been surprised by the ECB’s move. “The Greek government gambled that if it negotiated with us, the ECB would open its cashier windows, relax the rules,” the Dutchman said in a television interview. “There will be no easy access to the ECB’s windows until there is a solid agreement with the Eurogroup. That’s been made clear to them time and time again.”
Despite the standoff, the Tsipras administration has pledged to present reform proposals to leglisators in Athens by Thursday in an attempt to facilitate talks.
But while Tsipras emphasised that an interim deal to unlock bailout funds would be concluded this week or next, he also raised the prospect of further political turmoil if creditors persisted in making demands deemed unacceptable by his anti-austerity administration. “If I find myself in a difficult position – I hope I don’t – that pushes me beyond the limits [of his mandate] I will resort to the people, obviously not through elections but with a referendum. We should not be afraid of the people.”
Reacting to the prospect of a referendum, Dijsselbloem said Greece did not have the time to conduct a plebiscite. The country faces a tight deadline of debt repayments starting with a €780m loan installment to the IMF on 12 May, the day after a crucial eurogroup summit.
“It would cost money, it would create great political uncertainty, and I don’t think we have the time,” he said. “And I don’t think the Greeks have the time for it.”
This article was written by Helena Smith in Athens and Ian Traynor in Brussels, for theguardian.com on Tuesday 28th April 2015 19.09 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010