The Greek people resoundingly rejected the last bailout deal offered by Greece’s creditors in a referendum on Sunday.
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The resignation of the outspoken Varoufakis, an admirer of game theorist John F Nash whose life was documented in the 2001 film “A attractive Mind”, could be seen as a deliberate move to strengthen the hand of Greek negotiators in the debt talks, some analysts said.
A second Greek official said: “The Greek government came with the proposals which hadn’t been discussed by the Eurogroup last week”. This same biased reporting has been pushing the argument that Greece has “no choice” but to swallow even more austerity, selling off all its public assets to circling capitalist vultures, in the vain hope that someday the country’s economy will bottom out and begin “growing” again. But that may be more than Germany and its northern allies can swallow.
The Dutch socialist Finance Minister and President of the Eurogroup, Jeroen Dijsselbloem, apparently changed his mind over Greece. He did not rule out other forms of restructuring.
“The door is open to negotiations, but there isn’t much time left and the situation is urgent both for Greece and for Europe”, French President Francois Hollande said in a joint media appearance with Merkel in Paris on Monday.
The No vote has put Greece in uncharted political and economic territory rattling global markets, but things could get much worse in Greece.
If Greek banks run out of money and the country has to print its own currency, it could mean a state leaving the euro for the first time since it was launched in 1999, creating a precedent and fuelling doubts about the long-term viability of an incomplete European monetary union. “The definitive insolvency of the country now is an imminent threat”.
In a traditional barbers shop in Athens’ historic district of Plaka, a jumble of streets beneath the Acropolis, hairdresser George Panaiotaras, 80, believes Mr Tsipras will come back from Brussels with a deal.
Tsipras’s appointment of Tsakalotos as the new finance minister to lead talks with creditors was interpreted as a sign he may be willing to compromise. “That didn’t happen”, Greek Labour Minister Panos Skourletis told Antenna TV.
Dijsselbloem said the no vote in the referendum was clear but measures are still needed in Greece. Banks have been closed and ATM withdrawals restricted. He admitted to having “stage fright” upon assuming a post “not at the easiest moment in Greek history”.
European Commission President Jean-Claude Juncker has tempered expectations of a swift solution to the Greek crisis, saying “a solution is not going to appear overnight”.
Even with the country on the brink of economic collapse, Greek newspapers reported the government was still seeking exceptions from its reform pledges for special interests.
Athens wants to keep a 30 percent discount on value added tax on Greek islands and delay defence spending from cuts, which rightist junior coalition partners the Independent Greeks have called “red lines”.
It’s also equivalent to 2.5 percent of Finland’s annual GDP, he said. Without outside help, those banks are expected to run out of cash as early as Wednesday, with Athens projected to default on billions of dollars in loan repayments to European creditors later this month.
European leaders must decide whether they can negotiate with Tsipras, who blindsided them by walking out of talks on June 26 to call the referendum, or prepare for the first departure from the currency bloc founded 16 years ago. The European Central Bank (ECB) has been providing emergency credit to the banks, but on yesterday said it could not increase the amount offered because the banks’ collateral was weaker now.
“In light of the referendum, the likelihood of the Greek government acceding to creditors’ demands has diminished”, they said in a note.
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Hours after revelers left Athens’ main Syntagma Square to celebrate the “no” victory, pensioners crowded outside nearby banks to collect emergency payments, markets worldwide were rocked by the result, and European lenders warned that Greece faced a strict deadlines to avoid disaster.
