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<nettime> Yanis Varoufakis: As it happend (on June 27th, 2015 in Bruxell
Patrice Riemens on Sun, 28 Jun 2015 20:48:45 +0200 (CEST)

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<nettime> Yanis Varoufakis: As it happend (on June 27th, 2015 in Bruxelles)

Grüzi mittenand,

This is my second 'text filtering' of a Yanis Varoufakis piece, so
I might be suspected of becoming sortof his mouthpiece on the list.
Can't help, because I really wish I could find a text going radically
against his (his SYRIZA's) position. I could find none - because there
are none (correct me if wrong).

There is of course plenty of opposition to the present Greek
government's policies vis a vis 'Europe'. Samaras (New Democracy,
rightwing, former PM) and Theodorakis (To Potami, new 'Center'
party) in Greece, Dijsselbloem and Schauble in Brussels, to name the
more vociferous, but none of them has substantial, new arguments to
present. It all boils down to some lack of imagination, ideological
rigidity, TINA belief, or plain moral and/or intellectual confusion
about the issues at stake. And overall, a remarkable lack of
democratic convictions, not to speak of simple engagement towards the
common people.

In fact, one may be permitted to think that the root cause of the
whole conundrum is not Greece per se, but the various personal
and domestic political considerations and interests of the main
'interlocutors' of the Greek government. All of them have various
reasons to show inflexibility, even if it pushes Greece over the
brink, out of the Eurozone, and maybe out of the European Union
altogether. In the grand tradition of post-modern politics, both
domestic and foreign, any linkage with, let alone liability for the
decisions having led to the ensuing carnage will be sternly denied
afterwards, accompanied by a collective clambering of the moral high

I was just as surprised as everyone else to that the final nail on the
coffin of the 'institutions' phoney line of reasoning was hammered in by
none other than Dominique Strauss-Kahn, in what will probably go down as
the best political 'Return of the Mommy' performance of the period.

We're surely living in interesting times ...

Cheers from Oslo,


Original to Yanis Varoufakis' Blog:

As it happened ? Yanis Varoufakis? intervention during the 27th June 2015
Eurogroup Meeting
Posted on June 28, 2015 by yanisv

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.


Intervention by Yanis Varoufakis, 27th June 2015 Eurogroup Meeting


In our last meeting (25th June) the institutions tabled their final
offer to the Greek authorities, in response to our proposal for
a Staff Level Agreement (SLA) as tabled on 22nd June (and signed
by Prime Minister Tsipras). After long, careful examination, our
government decided that, unfortunately, the institutions? proposal
could not be accepted. In view of how close we have come to the 30th
June deadline, the date when the current loan agreement expires, this
impasse of grave concern to us all and its causes must be thoroughly

We rejected the institutions? 25th June proposals because of a variety
of powerful reasons. The first reason is the combination of austerity
and social injustice they would impose upon a population devastated
already by? austerity and social injustice. Even our own SLA proposal
(22nd June) is austerian, in a bid to placate the institutions and
thus come closer to an agreement. Only our SLA attempted to shift
the burden of this renewed austerian onslaught to those more able to
afford it ? e.g. by concentrating on increasing employer contributions
to pension funds rather than on reducing the lowest of pensions.
Nonetheless, even our SLA contains many parts that Greek society

So, having pushed us hard to accept substantial new austerity, in the
form of absurdly large primary surpluses (3.5% of GDP over the medium
term, albeit somewhat lower than the unfathomable number agreed to by
previous Greek governments ? i.e. 4.5%), we ended up having to make
recessionary trade-offs between, on the one hand, higher taxes/charges
in an economy where those who pay their dues pay through the nose and,
on the other, reductions in pensions/benefits in a society already
devastated by massive cuts in basic income support for the multiplying

Let me say colleagues what we had already conveyed to the institutions
on 22nd June, as we were tabling our own proposals: Even this SLA,
the one we were proposing, would be extremely onerous to pass through
Parliament, given the level of recessionary measures and austerity it
entailed. Unfortunately, the institutions? response was to insist on
even more recessionary (aka parametric) measures (e.g. increasing VAT
on hotels from 6% to 23%!) and, worse still, on shifting the burden
massively from business to the weakest members of society (e.g. to
reduce the lowest of pensions, to remove support for farmers, to
postpone ad infinitum legislation that offers some protection to badly
exploited workers).

The institutions new proposals, as expressed in their 25th June
SLA/Prior Actions document, would make a politically problematic
package ? from the perspective of our Parliament ? into a package that
would extremely difficult to push through our Parliamentary caucus.
But this is not all. It gets worse much worse than that once we take a
look at the proposed financing package.

What makes it impossible to pass the institutions? proposal through
Parliament is the lack of an answer to the question: Will these
painful measures at least give us a period of tranquillity during
which to carry out the agreed reforms and measures? Will a shock
of optimism counter the recessionary effect of the extra fiscal
consolidation that is being imposed on a country that has been in
recession for 21 consecutive quarters? The answer is clear: No, the
institutions? proposal is offering no such prospect.

This is why: The proposed funding for the next 5 months (see below for
a breakdown) is problematic in a variety of ways:

First, it makes no provision for the state?s arrears, caused by five
months of making payments without disbursements and of falling tax
revenues as a result of the constant threat of Grexit that has been
wafting in the air, so to speak.

Secondly, the idea of cannibalising the HFSF in order to repay the
ECB?s SMP-era bonds constitutes a clear and present danger: These
monies were earmarked, correctly, for strengthening Greece?s fragile
banks, possibly through an operation that deals with their mountainous
NPLs that eat into their capitalisation. The answer I have been given
by senior ECB officials, whose name will remain unsaid, is that,
if need be, the HFSF will be replenished to cope with the banks?
capitalisation needs. And who will do the replenishing? The ESM, is
the answer I was given. But, and this is a gigantic but, this is not
part of the proposed deal and, moreover, it could not be part of the
deal as the institutions have no mandate to commit the ESM in this
manner ? as I am sure Wolfgang will remind us all. And, moreover,
if such a new arrangement could be made, why then is our sensible,
moderate, proposal of a new ESM facility for Greece that helps shift
SMP liability from the ECB to the ESM not discussed? The answer ?we
will not discuss it because we will not discuss it? will be very hard
for me to convey to my Parliament, together with another package of

Thirdly, the proposed disbursements? schedule is a minefield of
reviews ? one per month ? that will ensure two things. First, that
the Greek government will be immersed every day, every week in the
review process for five long months. And well before these five months
expire, we shall enter into another tedious negotiation over the next
program ? since there is nothing in the institutions? proposal capable
of inspiring even the faintest of hopes that at the end of this new
extension Greece can stand on its own two feet.

Fourthly, given that it is abundantly clear that our debt will remain
unsustainable by the end of the year, and that market access will
remain as distant then as it is now, the IMF cannot be counted upon to
disburse its share, the 3.5 billion that the institutions are counting
as part of the funding package on the table.

These are solid reasons why our government does not consider it has a
mandate to accept the institutions? proposal or to use its majority in
Parliament in order to push it through and onto the statutes.

At the same time, we do not have a mandate to turn down the
institutions? proposals either, cognizant of the critical moment in
history we find ourselves in. Our party received 36% of the vote and
the government as a whole commanded a little more than 40%. Fully
aware of how weighty our decision is, we feel obliged to put the
institutions? proposal to the people of Greece. We shall endeavour
to spell out to them fully what a Yes to the Institutions? Proposal
means, to do the same regarding a No vote, and then let them decide.
For our part we shall accept the people?s verdict and will do whatever
it takes to implement it ? one way or another.

Some worry that a Yes vote would be a vote of no confidence in our
government (as we shall be recommending a No vote), in which case we
cannot promise to the Eurogroup that we shall be in a position to sign
and implement the agreement with the institutions. This is not so. We
are committed democrats. If the people gives us a clear instruction to
sign up on the institutions? proposals, we shall do whatever it takes
to do so ? even if it means a reconfigured government.

Colleagues, the referendum solution is optimal for all, given the
constraints we face.

    If our government were to accept the institutions? offer today,
promising to push it through Parliament tomorrow, we would be defeated
in Parliament with the result of a new election being called within a
very long month ? then, the delay, the uncertainty and the prospects
of a successful resolution would be much, much diminished But even
if we managed to pass the institutions? proposal through Parliament,
we would be facing a major problem of ownership and implementation.
Put simply, just as in the past the governments that pushed through
policies dictated by the institutions could not carry the people with
them, we too would fail to do so.

On the question that will be put to the Greek people, much has been
said about what it should be. Many of you tell us, advise us, instruct
us even, that we should make it a Yes or No question on the euro. Let
me be clear on this. First, the question was formulated by the Cabinet
and has just been passed through Parliament ? and it is ?Do you accept
the institutions? proposal as it was presented to us on 25th June
in the Eurogroup?? This is the only pertinent question. If we had
accepted that proposal two days ago, we would have had a deal. The
Greek government is now asking the electorate to answer the question
you put it to me Jeroen ? especially when you said, and I quote, ?you
can consider this, if you wish, a take or leave it proposal?. Well,
this is how we took it and we are now honouring the institutions and
the Greek people by asking the latter to deliver a clear answer on the
institutions? proposal.

To those who say that, effectively, this is a referendum on the euro,
my answer is: You may very well say this but I shall not comment.
This is your judgement, your opinion, your interpretation. Not ours!
There is a logic to your view but only if there is an implicit threat
that a No from the Greek people to the institutions? proposal will be
followed up by moves to eject Greece, illegally, out of the euro. Such
a threat would not be consistent with basic principles of European
democratic governance and European Law.

To those who instruct us to phrase the referendum question as a
euro-drachma dilemma, my answer is crystal clear: European Treaties
make provisions for an exit from the EU. They do not make any
provisions for an exit from the Eurozone. With good reason, of course,
as the indivisibility of our Monetary Union is part of its raison
d? etre. To ask us to phrase the referendum question as a choice
involving exit from the Eurozone is to ask us to violate EU Treaties
and EU Law. I suggest to anyone who wants us, or anyone else, to hold
a referendum on EMU membership to recommend a change in the Treaties.


It is time to take stock. The reason we find ourselves in the present
conundrum is one: Our government?s primary proposal to you and the
institutions, which I articulated here in the Eurogroup in my first
ever intervention, was never taken seriously. It was the suggestion
that common ground be created between the prevailing MoU and our
new government?s program. For a fleeting moment, the 20th February
Eurogroup statement raised the prospect of such common ground ? as it
made no reference to the MoU and concentrated on a new reform list by
our government that would be put to the institutions.

Regrettably, immediately after the 20th of February the institutions,
and most of colleagues in this room, sought to bring the MoU back to
the centre, and to reduce our role in marginal changes within the MoU.
It is as if we were told, to paraphrase Henry Ford, that we could have
any reform list, any agreement, as long as it was the MoU. Common
ground was thus sacrificed in favour of imposing upon our government a
humiliating retreat. This is my view. But it is not important now. Now
it is up to the Greek people to decide.

Our task, in today?s Eurogroup, ought to be to pave the ground for a
smooth passage to the referendum of 5th July. This means one thing:
that our loan agreement be extended by a few weeks so that the
referendum takes place in conditions of tranquillity. Immediately
after 5th July, if the people have voted Yes, the institutions?
proposal will be signed. Until then, during the next week, as the
referendum approaches, any deviation from normality, especially in
the banking sector, will be invariably interpreted as an attempt to
coerce Greek voters. Greek society has paid a hefty price, through
huge fiscal contraction, in order to be part of our monetary union.
But a democratic monetary union that threatens a people about to
deliver their verdict with capital controls and bank closures is a
contradiction in terms. I would like to think that the Eurogroup
will respect this principle. As for the ECB, the custodian on our
monetary stability and of the Union itself, I have no doubt that, if
the Eurogroup takes a responsible decision today to accept the request
for an extension of our loan agreement that I am now tabling, it will
do what it takes to give the Greek people a few more days to express
their opinion.

Colleagues, these are critical moments and the decisions we make are
momentous. In years to come we may well be asked ?Where were you on
the 27th of June? And what did you do to avert what happened? At the
very least we should be able to say that: We gave the people who live
under the worst depression a chance to consider their options. We
tried democracy as a means of breaking a deadlock. And we did what it
took to give them a few days to do so.

POSTSCRIPT ? The day the Eurogroup President broke with the tradition
of unanimity and excluded Greece from a Eurogroup gathering at will

Following my intervention (see above) the Eurogroup President rejected
our request for an extension, with the support of the rest of the
members, and announced that the Eurogroup would be issuing a statement
placing the burden of this impasse on Greece and suggesting that
the 18 ministers (that is the 19 Eurozone finance ministers except
the Greek minister) reconvene later to discuss ways and means of
protecting themselves from the fallout.

At that point I asked for legal advice, from the secretariat, on
whether a Eurogroup statement can be issued without the conventional
unanimity and whether the President of the Eurogroup can convene
a meeting without inviting the finance minister of a Eurozone
member-state. I received the following extraordinary answer: ?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.

For my part, I concluded as follows:

Colleagues, refusing to extend the loan agreement for a few weeks,
and for the purpose of giving the Greek people an opportunity
to deliberate in peace and quiet on the institutions? proposal,
especially given the high probability that they will accept these
proposals (contrary to our government?s advice), will damage
permanently the credibility of the Eurogroup as a democratic decision
making body comprising partner states sharing not only a common
currency but also common values.

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