Varoufakis accuses Germany of bullying Greece (2)

Greece's former Finance Minister Yanis Varoufakis
7/14/2015 4:43 PM
Category: International

In an interview with British magazine New Statesman, Greece's former Finance Minister Yanis Varoufakis said that the Eurogroup is completely and utterly controlled by Germany, and Greece was set up.

In a first interview since his resignation a week ago, Varoufakis stood by his conviction that austerity program has failed in Greece. He argued that Alexis Tsipras’s Syriza government was elected to renegotiate an austerity program that had failed, but couldn't stand up to Greece’s creditors who insisted carrying on with the program started by the previous Greek governments.

Speaking before the deal between Greece and the Euro-area finance ministers was reached on Monday – which one Bloomberg writer called “insane” – Varoufakis didn't hold back criticism of his former German counterpart, Wolfgang Schäuble, and how Germany has bullied his country.

“If anything it will be worse,” he said upon commenting the possible agreement. “I trust and hope that our government will insist on debt restructuring, but I can’t see how German finance minister Wolfgang Schäuble is ever going to sign up to this. If he does, it will be a miracle.”

“The other side insisted on a ‘comprehensive agreement,’ which meant they wanted to talk about everything. My interpretation is that when you want to talk about everything, you don’t want to talk about anything,” Varoufakis said on earlier negotiations, adding that a comprehensive agreement was impossible. “There were absolutely no [new] positions put forward on anything by them.”

Varoufakis claimed that unlike the rest of the Euro-area finance ministers, he talked about economic arguments, only to face a wall.

“There was point blank refusal to engage in economic arguments. Point blank. You put forward an argument that you’ve really worked on, to make sure it’s logically coherent, and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply,” he said in an interview.

Varoufakis said that Germany controls the Eurogroup completely.

“It is all like a very well-tuned orchestra and German finance minister is the director. Only the French minister [Michel Sapin] made noises that were different from the German line, and those noises were very subtle. You could sense he had to use very judicious language, to be seen not to oppose. And in the final analysis, when Dr Schäuble responded and effectively determined the official line, the French minister would always fold.”

The Eurozone finance ministers and Greece reached a deal on Monday, under which Greece has to take concrete steps, including asset sales under the EU supervision, to receive a new bailout of up to 86 billion euros.

Estonia was supporting Germany's position. “Trust is a resource that wears thin easily, but is arduously renewable. Estonia, like many other European countries, cannot accept solutions that would result in writing off debts or launching guarantees. It was jointly understood among the heads of government that the basis of further steps would be Greece’s strong, comprehensive and long-term commitment to carry out reforms and comply with obligations,” said Estonian Prime Minister Taavi Rõivas.

The agreement, although currently yet to be approved by Greek Parliament and the parliaments of a number of Eurozone countries, would leave Greece in the single currency area. Greece will have to push through a decrease in VAT exceptions, pension reform, court reform, update legislation on banks and guarantee the independence of the nation's statistics office.

But Bloomberg said that if the deal proceeds, it will avert the immediate chaos that Greece's uncontrolled exit from the euro area would entail, but it does nothing to address the fundamental issues that have repeatedly landed Europe in crisis since 2009.

Bloomberg cited the former German economic minister Karl-Theodor zu Guttenberg who had quipped that Europe hasn’t been kicking the can down the road, it's been kicking it up a hill and wondering why it keeps rolling back on its foot.

S. Tambur

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