Athens: Greece's flamboyant and vociferous finance minister Yanis Varoufakis put forth his resignation after pressure from his government and country's creditors identified him as an hindrance to productive talks about a new bail out. In a statement on his blog, the ex-finance minister said, “I was made aware of a certain preference by some Eurogroup participants…for my…‘absence’ from its meetings; an idea that the prime minister judged to be potentially helpful to him in reaching an agreement.”
A self proclaimed “erratic Marxist”, Varoufakis had vehemently campaigned for a 'No' for the referendum held by the country, rubbing eurozone partners the wrong way. Prime Minister Alexis Tsipras had recognised the souring relations between Varoufakis and the Eurogroup, and was on a lookout for an opening to place him out. His withdrawal has raised expectations for an easy going negotiation between the country and its creditors.
Varoufakis said Prime Minister Alexis Tsipras had judged that his resignation “might help achieve a deal” and that was the reason he was leaving the finance ministry. “I shall wear the creditors' loathing with pride.” The referendum “will stay in history as a unique moment when a small European nation rose up against debt-bondage,” Varoufakis said. His last task at the Finance Ministry was to announce that the government was seeking a new chief to run the country’s national statistics service, indicating Greece’s current chief statistician, Andreas Georgiou, wouldn’t stay.
The 'No' vote of over 61 per cent in the country's first referendum in 41 years Sunday, to the bailout deal offered by the IMF, ECB and European Commission, presents a crisis to Eurozone elites who wish to impose further austerity on a depressed Greek economy. Greece owes its creditors € 240 billion, who had conditioned that the country make reforms in order for it to receive further bailout funds.
Succeeding Varoufakis, 55 year old Oxford-educated Euclid Tsakalotos has been appointed as the new finance minister. He head the country's negotiating team in talks with the countrys' international creditors and has substantial experience considering the matter on hand. His first job will be to deal with the revelation that the ECB will not increase funding to Greece as its banks are prepared to run out of cash.
Currently, Greece's fate is largely in the hands of the European Central Bank and of German Chancellor Angela Merkel. Merkel, under pressure in Germany to cut Greece loose from the euro zone, met French President Francois Hollande to seek a joint response before an emergency summit of euro zone leaders in Brussels. They said that the door was open for a return to debt negotiations with Greece, but called on Athens to make detailed proposals. Mr Hollande, “I stress the fact that time is running out and there is urgency, urgency for Greece and urgency for Europe.”
Meanwhile, Varoufakis cruised around the streets of Athens on his bike and had drinks with his friends after his resignation. His publisher has already plugged a new edition of his book about international financial crises, 'The Global Minotaur' and his current Twitter bio reads, 'Economics professor, quietly writing obscure academic texts for years, until thrust onto the public scene by Europe's inane handling of an inevitable crisis.'
The most affected were the pensioners who do not use bank cards, relying on banks instead as they were unable to withdraw any money after Greek government imposed capital controls. They were seen queuing before dawn at banks around the country which temporarily opened to let them collect the €120 they were allowed. Some banks even handed out debit cards to pensioners in the hope they use them in future. Many British Asian pensioners live in the country, who bore equal brunt of the mishap.
The Greeks rejection of the referendum has not only pushed the future of the Eurozone into uncharted waters, but also affected investors across the world. Asian markets opened lower than usual this week, and the benchmark BSE Sensex in India opened 300 points down. The rupee too was trading 15 paise down at 63.59 against the US dollar. “Indian stock and currency markets will remain volatile over the next month or two as a result of the Greek crisis and renewed fears of a deficient monsoon leading to a drought,” said the CEO of a leading domestic asset management company. “The Sensex may correct by another 3-4 per cent as foreign investors may pull out their money in a kneejerk reaction to developments in Europe.”
