Daily Management Review

The citizens of Athens are unrepentant in their defiance


With Greek’s finance minister - Yanis Varoufakis- quitting his job, the scenario for a last minute negotiation is a distant possibility. Just as Greek exiting the Eurozone is. Come what may, the citizens of Greece are an unrepentant lot.

Yanis Varoufakis, Greece’s finance minister, who infuriated his partners from the Eurozone with his unorthodox style and had branded Greece’s creditors with “terrorism”, has resigned. He had extensively campaigned for the ‘No’ vote.
Varoufakis explained his resignation as, "I was made aware of a certain ‘preference’ by some Eurogroup participants, and assorted ‘partners’, for my... ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement."
With Mr. Varoufakis out of the picture, it would certainly help the Alexis Tsipras, Greece’s Prime Minister to reach out to other members of the Eurozone for a last-minute compromise.
Mr. Euclid Tsakalotos, Greece’s chief negotiator who has been dealing with international creditors, is likely to be the next Finance Minister, as per a source in the government. A professor and an economist, the mild-mannered Tsakalotos has occupied a front seat on the negotiation table after Varoufakis was sidelined. He is most likely to be named as the Finance Minister.
With ATMs running out of cash and banks keeping their doors locked, the fate of the country’s economy is squarely in the hands of Angela Merkel, the German Chancellor as well as those of the European Central Bank. The European Central Bank’s governing council and policy decision body was scheduled to hold a conference call on 06-07-2015 so as to decide how long they can afford to keep afloat Greek banks after the ‘No’ referendum.
The German Chancellor is under mounting pressure to cut off Greece from the Eurozone. She is scheduled to meet President Francois Hollande in Paris later today so as to come up with a joint response ahead of the Eurozone’s emergency summit meeting in Brussels later on 07-07-2015.
Sigmar Gabriel from the Social Democrat, said that with the referendum throwing out a ‘No’ vote, public opinion in Germany is quickly turning against providing any further aid to Greece. The referendum has essentially broken the last bridges of a compromise with the Eurozone.
Having dealt for 5 years of economic crisis, 61.3% of Greeks voted for a ‘No’ ballot, thereby cutting off all bailout conditions set by Greek’s creditors and casting the country into an unknown.
In a televised address to the nation, Tsipras said, “You 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." Jubilant supporters thronged the Syntagma Square in order to celebrate their act of defiance against Europe's financial and political establishment.
The effect of the referendum on the forex market saw the euro tumble against the dollar. Investors and bond traders rushed in to buy German bonds while bond yields from the debt of the Italian Government saw a sharp climb.
Stocks in the Asian market saw their biggest ever daily fall in the last two years. Although this has been attributed to fears a propos the Chinese economy, however the departure of Varoufakis as Greek’s Finance Minister is likely to soften the fall for European markets.
"The first message to Athens is that no one ever wants to see Varoufakis again after he called us terrorists," said a source who is a regular in the Eurogroup meetings.
As a parting or rather as an after-shot, Varoufakis spoke from his blog saying that the ‘No’ vote has indeed taught a lesson in democracy to Europe and now Greece had a better negotiation position at the tables.
"It is, therefore, essential that the great capital bestowed upon our government by the splendid 'No' vote be invested immediately into a 'Yes' to a proper resolution – to an agreement that involves debt restructuring, less austerity, redistribution in favour of the needy, and real reforms."
For officials from the Eurozone it would be hard to provide better terms of credit for Greece, especially since Tsipras' Syriza party coming to power saw Greece plunging into recession. Many analysts, including those from J.P Morgan, point out that the best course of action or at least the most likely scenario, would be that Greece exits the Eurozone.
As for the citizens of Greece, they are in a defiant mood, "I voted ‘No’ to austerity; I want this torture to end. I’m aware that we will suffer for years but I’m still hopeful. I need to know that there is light at the end of tunnel, that the lives of my children will be better," said a 42 year old mother of two - Katerina Sarri who mans a Kiosk in Athens.