A claim by former Euro Working Group chief Thomas Wieser that resistance from the ruling Radical Left SYRIZA to more austerity and reforms after winning power cost Greece at least 200 billion euros ($246.54) has been ridiculed by the government and former finance minister Yanis Varoufakis, who had led talks with international creditors.
The pugnacious Varoufakis, who was ousted by Prime Minister Alexis Tsipras after Eurozone officials said they couldn’t work with him, tweeted that, “The efforts of the domestic and foreign troika to vindicate us are touching; only deliberately can they utter such grand nonsense. I have no words by which to thank them.”
With Wieser’s comments hitting SYRIZA hard, government spokesman Dimitris Tzanakopoulos dismissed the assessment of losses. “…We could say that the government’s negotiations (in first-half 2015) cost twice or thrice or seven times Greece’s GDP. Anyone can speak his mind, besides, it costs nothing…”
Wieser is an American-Austrian economist who headed the Euro Working Group, a preparatory body composed of representatives of the euro area member states of the Economic and Financial Committee, the European Commission and the European Central Bank within the Eurozone.
He told told the Delphi Economic Forum on March 2 that confrontations from Tsipras, SYRIZA and Varoufakis were costly and that his estimate was “safe”” and even “conservative,” although it’s far more than Greece’s Gross Domestic Product of about 157.88 billion euros ($194.6 billion).
After winning election in January, 2015, Tsipras tried to stick to his campaign promises to reverse austerity and defy the country’s lenders but after the European Central Bank held back liquidity help in July, 2015, he was forced to close banks, impose capital controls and seek a third rescue package, this one for 86 billion euros ($105.67 billion) he said he never would.
That followed his reneging on a referendum he called in which he asked Greeks to back him in rejecting austerity, only to ignore the results that gave him overwhelming backing and led him to surrender to the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM).
Wieser said the foot-dragging the first six months of 2015 when Tsipras indulged in political posturing and populism were expensive and led to the third bailout that included more pension cuts, taxes on low-and-middle-income families and an avalanche of new taxes and tax hikes, including for remote islands he said he would spare.
Wieser said the government, and its then-finance minister Yanis Varoufakis, who spent much of his time sparring with the EU and Eurozone officials in political combat were provoking an exit from the Eurozone, a so-called Grexit, during that crucial period.
He earlie said that “It probably cost double (in damages): the economic shrinkage, distrust by investors, the hits taken by Greek banks. But it wasn’t only Varoufakis, all of the Greek government bears responsibility,” he said, in a shot at Tsipras and Finance Minister Euclid Tsakalotos, a Marxist economist forced into an embarrassing surrender to the Troika.
Wieser dismissed allegations from Greece it was the victim of the creditors and outside forces, a common lament in the country, and said it was responsible for its own near downfall after decades of wild overspending and runaway patronage, continued by Tsipras who said he would stop it.
Asked further, he said he authored a plan, code-named “Z,” for the possibility of a Greek Eurozone exit, or Grexit, as far back as 2012, while adding that leaving the financial bloc was a greater possibility once Tsipras came into power with promises to bring a Leftist revolution before conceding, as did the previous governments he mocked for doing so, adding that, “the consequences in 2012 would have been more dramatic.”