Greek PM replaces outspoken minister

Greece debt crisis: Finance Minister Varoufakis resigns

  • 6 July 2015
  • From the section Europe
Yanis Varoufakis (5 July 2015)
Yanis Varoufakis last week accused Greece’s international creditors of “terrorism”

Greece’s outspoken finance minister has resigned, hours after voters backed his call to reject creditors’ demands for more austerity in a referendum.

Yanis Varoufakis said it was felt his departure would be helpful in finding a solution to the country’s debt crisis.

Eurozone finance ministers, with whom he repeatedly clashed, had wanted him removed, Mr Varoufakis explained.

Meanwhile, global financial markets have fallen over fears that Greece is heading for an exit from the euro.

The European Central Bank (ECB) is to meet to discuss whether to raise its emergency cash support for Greek banks, which are reportedly just days away from running out of funds and collapsing.

Follow the latest updates

BBC Europe editor Katya Adler says the eurozone’s most powerful members, France and Germany are at odds over what to do next, with France taking a softer and Germany a harder line.

Pensioners without bank cards gathered outside the few banks opened on Monday

German Chancellor Angela Merkel will meet French President Francois Hollande in Paris later on Monday, and there will be a summit of eurozone leaders on Tuesday.

The majority of Greeks say they want to stay in the single currency, but their angry “No” vote in Sunday’s referendum has made that far harder, our correspondent adds.

‘Creditors’ loathing’

Mr Varoufakis announced his resignation on his blog only hours after it emerged that 61.3% of the 6.16 million Greeks who voted in the referendum had rejected the demands for more austerity from the ECB, the European Commission and the International Monetary Fund (IMF).

He said Sunday’s referendum would “stay in history as a unique moment when a small European nation rose up against debt-bondage”.

By Mark Lowen, BBC News, Athens

He went with a typical rhetorical flourish: “I shall wear the creditors’ loathing with pride,” wrote Yanis Varoufakis, known as much for his leather jackets as his flamboyant language – “austerity is like trying to extract milk from a sick cow by whipping it”, being just one of his gems. But Greece’s outgoing finance minister was an obstacle to an urgent deal with Brussels. Adored by his supporters back home, he was hated by eurozone leaders, whom he accused of “terrorism” towards Greece.

His departure – or removal – is a clear gesture by Prime Minister Alexis Tsipras that he wants fresh debt talks and a deal as soon as possible. He certainly needs one: Greek banks are so critically low on funds that they could collapse in days without an injection of cash from the European Central Bank. But it will only lend if Greek banks are solvent – which they’re not – or Greece is in a bailout scheme – which it isn’t. So the door to a eurozone exit inches ever closer.

Greece achieved a political earthquake last night. But the aftershocks could be far greater.

Robert Peston: 48 hours to keep Greece in euro

Will ‘No’ vote hasten Greece’s exit from the euro?

Gavin Hewitt: Greece votes ‘no’ and gambles future

‘No’ prompts mixed feelings in Greek press

Mr Varoufakis added that he had been “made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings”.

Prime Minister Tsipras had judged this to be “potentially helpful to him in reaching an agreement”, he noted.

His replacement is expected to be named after a meeting of Greek political leaders on Monday.

As thousands of Greeks took to the streets celebrate the referendum result on Sunday evening, Mr Tsipras said they had “made a very brave choice”.

“The mandate you gave me is not the mandate of a rupture with Europe, but a mandate to strengthen our negotiating position to seek a viable solution,” he added.

He added that he was willing to go back to the negotiating table on Monday, noting that an International Monetary Fund (IMF) assessment published this week confirmed that restructuring Greece’s €240bn (£170bn) euro debt was necessary.

Eurozone finance ministers said they expected to hear “new proposals from the Greek authorities” when they meet in Brussels on Tuesday.

“The basis of a dialogue is on the table, but it’s up to Greece to show us that it takes the dialogue seriously and that it knows it can stay in the euro and that there are decisions to make,” French Finance Minister Michel Sapin told Europe 1 radio.

German government spokesman Steffen Seibert said “conditions to start negotiations on a new aid programme are not met yet”.

More European reaction:

Eurogroup president Jeroen Dijsselbloem warned “difficult measures and reforms are inevitable”
  • European Parliament President Martin Schulz called on Greece’s government to make “meaningful and constructive proposals”
  • Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup, said the referendum result was “very regrettable for the future of Greece”
  • EU foreign policy chief Federica Mogherini tweeted that the vote meant “Painful days for all those that believe in a united Europe”
  • Italian Foreign Minister Paolo Gentiloni said: “Now it is right to start trying for an agreement again. But there is no escape from the Greek labyrinth with a Europe that’s weak and isn’t growing.”

Greece had been locked in negotiations with its creditors for months when the Greek government unexpectedly called a referendum on the terms it was being offered.

Banks have been shut since last Monday after the European Central Bank declined to give Greece more emergency funding.

Withdrawals at cash machines have been limited to €60 per day. Greece’s last bailout expired on Tuesday and Greece missed a €1.6bn (£1.1bn) payment to the IMF.

The European Commission – one of the “troika” of creditors along with the IMF and the ECB – wanted Athens to raise taxes and slash welfare spending to meet its debt obligations.

Greece’s Syriza-led government, which was elected in January on an anti-austerity platform, said creditors had tried to use fear to put pressure on Greeks.

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