The Varoufakis View: Don’t Trust Tsipras

August 20, 2018

Former Greek finance chief Yanis Varoufakis, ousted by Prime Minister and Radical Left SYRIZA leader Alexis Tsipras in the summer of 2015 for being too aggressive in dealing with the country’s creditors, said he never should have believed the Premier was serious in promising to reverse austerity and defy the lenders.

“My mistake was trusting Mr. Tsipras – (trusting) that we had been elected with a clear mandate not to extend the country’s debt colony status with a new memorandum and that we would fight until the end to link the total debt and the repayment rate with the GDP and its growth rate – what we call the growth clause,” he told SKAI TV.

But he dismissed a claim by the head of the European Stability Mechanism (ESM) Klaus Regling that the first six months of 2015, when Varoufakis was still Finance Minister, cost the country up to 200 billion euros ($228.08 billion) in losses and the need for a third rescue package, for 86 billion euros ($98.07 billion).

“The cost was huge since 2010 and it is entirely due to the Troika’s wrong program,” he said, referring to the European Union-European Central Bank-International Monetary Fund (EU-ECB-IMF) that provided two first bailouts of 240 billion euros ($273.88 billion) from 2010-2012.
The ESM took the place of the IMF in the third rescue package.

“They are doing me a great honor by trying to pass on their sins to me. A finance minister is judged by the debt levels he leaves behind, in relation to what he found, the cash reserves and the GDP. You will see that I mostly delivered what I had received,” he added.

Varoufakis described the ESM as a “a sinful mechanism of alleged stability, which in essence destabilized the Greek economy and Europe.”

He said despite a debt relief deal giving Greece until 2060 to repay the loans, but not a lower interest rate, that “there is no chance” it will be ever repaid.

“What they call debt relief is essentially a brutal burden on public debt. They took less than 100 billion euros which were set to be repaid by 2032 and rolled it over after 2032, with interest,” he said.

“The Troika’s commitment for a debt rollover means we will have debt repayments which will reach 50 percent of public revenue. Investors hear this and think Greece is not for serious investments but for quick money,” he said.


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