Varoufakis Details EU-ECB Plot To ‘Humiliate’ Greece

In a long interview with the New Statesman published July 13, former Greek Finance Minister Yanis Varoufakis described how the Eurogroup and the ECB from the beginning plotted to put Greece up against a wall and force it into a humiliating defeat.

In the Eurogroup, comprising the euro area finance ministers, Varoufakis was simply ignored by his fellow finance ministers; his interventions and proposals at meetings were not responded to. The Eurogroup used dilatory tactics and then accused Greece of implementing those tricks. Germany’s Schäuble once blurted out that he would not discuss the program, because it has been accepted by the previous government and “we can’t possibly allow an election to change anything. Because we have elections all the time, there are 19 of us; if every time there was an election and something changed, the contracts between us wouldn’t mean anything.”

At that point, Varoufakis stood up and said: “Well, perhaps we should simply not hold elections any more for indebted countries,” and there was no answer.

In Varoufakis’s reconstruction, the decisive role of the ECB in strangling Greece is briefly but clearly described:

“My view was — and I put this to the government — that if they dared shut our banks down, which I considered to be an aggressive move of incredible potency, we should respond aggressively but without crossing the point of no return.”We should issue our own IOUs, or even at least announce that we’re going to issue our own euro-denominated liquidity; we should haircut the Greek 2012 bonds that the ECB held, or announce we were going to do it; and we should take control of the Bank of Greece. This was the triptych, the three things, which I thought we should respond with if the ECB shut down our banks.

“… I was warning the Cabinet this was going to happen [the ECB closing our banks] for a month, in order to drag us into a humiliating agreement. When it happened — and many of my colleagues couldn’t believe it happened — my recommendation for responding ‘energetically,’ let’s say, was voted down.”

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