Greek finance minister Yanis Varoufakis told the Eurogroup before they met without him
He just resigned after his great NO victory in the referendum to help with a deal: The EU politicians could not swallow his blunt talks, and his manner of meeting with them in teeshirts.
On Saturday, June 27, the Eurogroup’s finance ministers met twice.
Once with all 19 members in attendance, and once with just 18 members. Missing was Greek finance minister Yanis Varoufakis.
But since this is 2015 and we are getting the fast and furious updates on Greece’s bailout negotiations on Twitter and blogs, Varoufakis took to his personal blog to detail not only what he told the Eurogroup on Saturday, but give color on just how ridiculous he thought his exclusion from a second meeting was.
The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history.
Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals — proposals crucial for Greece’s future in the Eurozone.
The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt.
I was even asked: “How do you expect common people to understand such complex issues?”
Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting! But nor did European institutions.
After our request was rejected, the Eurogroup President broke with the convention of unanimity (issuing a statement without my consent) and even took the dubious decision to convene a follow up meeting without the Greek minister, ostensibly to discuss the “next steps.”
Can democracy and a monetary union coexist?
Or must one give way? This is the pivotal question that the Eurogroup has decided to answer by placing democracy in the too-hard basket. So far, one hopes.
Varoufakis also includes the complete text of the speech he gave to the Eurogroup, outlining why Greece rejected the latest proposal from its creditors and why Greece felt compelled to call a referendum to vote on the matter.
After the Eurogroup meeting broke and Varoufakis learned they would reconvene without him, he asked for clarification on the legal basis for this and was told:
“‘The Eurogroup is an informal group. Thus it is not bound by Treaties or written regulations.
While unanimity is conventionally adhered to, the Eurogroup President is not bound to explicit rules.’
I let the reader comment on this remarkable statement.”
The significance here is that the Eurogroup, and really the euro project more broadly, is seen as a democratic institution.
In Varoufakis’ estimation, then, the group then going ahead an deliberating on the future of Greece without Greece sitting at the table is a fundamental break with what Varoufakis sees as the organization’s purpose.
Italy’s newspapers are today awash with Greek flags, with most leading on the impact the no vote will have on Europe. “Greece, a slap in Brussels’ face” reads the front page of left-leaning daily La Repubblica, while Italy’s leading daily, Corriere della Sera, writes “The Greek NO scares Europe”.
In covering the resignation of the Greek finance minister, Yanis Varoufakis, Italian media have honed in on his fashion choice. Varoufakis appeared at a press conference in a grey t-shirt on Sunday night, before today announcing his decision to quit.
Italians themselves are still getting used to the casual clothing choices of their own prime minister, Matteo Renzi, who often makes public appearances in jeans.
Spain’s economy minister Luis de Guindos has echoed that Greece should remain part of the eurozone and the euro is irreversible.
He said the Spanish government was open to negotiating a third bailout, and any new Greek package should include a comprehensive analysis of Greek needs
Yields on government bonds in Spain, Italy and Portugal are moving higher after the no vote, not surprising given the implications of Greece moving closer to a eurozone exit on these countries:
One of the key decisions of the day will be made by the European Central Bank when it looks at whether to continue providing liquidity to Greek banks. If not, they will struggle to reopen on Tuesday, as Greek politicians (notably the now departed Yanis Varoufakis) had promised. Michael Hewson, chief market analyst at CMC Markets UK, said:
The ball now lies firmly in the ECB’s court as the prospect of Greek banks running out of money in the coming hours is likely to increase, with the prospect that the ECB will cut off Greek banks in the process causing a collapse of the Greek banking system, and in the process highlighting the significant structural flaws of the euro.
In a proper monetary union it would be inconceivable for the US to cut off Florida or for the UK government to cut off Scotland from their lender of last resort, but if the ECB ends ELA then that is precisely what will happen to Greece, either later today, or later this week.
Greece likely to be on BRICS summit agenda
There has been no official reaction from the Kremlin yet about the Greek vote, writes Shaun Walker, but Russia has been watching the drama unfold between Athens and Brussels with some interest, and Greek prime minister Alexis Tsipras has made two visits to Moscow in recent months to make the point that Greece could seek alternative creditors. He has left with little in the way of concrete commitments, however.
A summit of the BRICS group of nations (Brazil, Russia, India, China, South Africa) will be held in the Russian city of Ufa later this week and Greece is likely to be on the agenda. Various ideas have been floated in recent weeks, including making Greece a member of the club, which would give it access to loans from the newly founded BRICS development bank.
However, while Moscow might be keen on the idea for political reasons, Russia is also still in a difficult financial situation, and the other BRICS members may well be less keen.
