Varoufakis Resigns

Notes From The Eye Of The Storm

A bit of a curious gesture from the Greek government upon finding validation at the ballot box, is that Finance Minister Yanis Varoufakis has resigned. Heck, I may as well quote most of it here:

The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage. 

Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. 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. 

Soon after the announcement of the referendum results, 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. For this reason I am leaving the Ministry of Finance today. 

I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum. 

And I shall wear the creditors’ loathing with pride.

It's pretty self-explanatory. In exchange for making some kind of deal to stick, he took himself out of the picture. It's an extraordinary turn of events, but then again, so is the whole situation where by a European nation has defaulted and its citizens have voted 'no' to more austerity.

I would hazard a guess and say that Mr. Varoufakis saw things through to their logical conclusion. It's now up to the European Central Bank to come to the table, and recognise that debt reduction is going to be there as a legitimate bargaining point. Watching things from the great distance here in Australia, it strikes one as being an important moment in the aftermath of the GFC where perhaps bankers in Europe have to face the music for their failures instead of being bailed out and collecting their bonuses while enforcing austerity on a whole nation. 

There was this interesting little panel doing the rounds today on Facebook:

Oddly enough, Deutsche Bank has already been bailed out for about the same amount of money it would take to bail out Greece. I know they're sitting on trillions of derivatives that could blow up as a result of a Grexit, but surely they don't want to blow themselves up that badly.