Yanis Varoufakis’s Account of the Greek Crisis: a Self-Condemnation — Part Six: The Disastrous Agreement of February 2015

Wolfgang Schäuble and Varoufakis.

First published at CADTM. Translated by Vicki Briault and Snake Arbusto.

This series of articles on Yanis Varoufakis’s book, Adults in The Room: My Battle With Europe’s Deep Establishment is a guide for left-leaning readers who are not happy with the dominant narrative meted out by the mainstream media and the Troika-controlled governments. These readers are also dissatisfied with the former Finance Minister’s version. 1 As a counterpoint to Varoufakis’s story, I have highlighted events that he is silent about and I have expressed different views on what he should have done and what he did instead. My story runs parallel, and not opposite, to his.

It is crucial to thoroughly analyze the policy implemented by the Varoufakis-Tsipras government because, for the first time in the 21st century, a radical left-wing government was elected in Europe. If we want to avoid another disaster, it is absolutely vital to identify the flaws and understand what went wrong.

This critique of the Greek government’s policy in 2015 is not primarily meant to point out the respective responsibilities of Tsipras or Varoufakis as individuals. It is imperative to analyze the politico-economic orientation that was followed, so that we can ascertain the causes of failure, understand what could have been tried instead, and learn what a radical left-wing government can do in a country in the periphery of the Eurozone.

In the days and weeks following the ECB’s attack on Greece on 4 February 2015, intense negotiations took place culminating in the sinister agreement of 20 February, confirmed on 24 February. The agreement extended the Second Memorandum, that had been rejected by the Greek population, by four months. By signing it, the Alexis Tsipras government committed itself to repaying all creditors on the previously agreed dates — that is, a total of € 7 billion between February and the end of June 2015, € 5 billion of which to the IMF — and to submit a list of new austerity measures and privatizations to the Eurogroup.

In this sixth part of our series, we observe and analyze events as they unfolded. Varoufakis’s account of the negotiations with the Eurogroup merits our attention, and I would urge you to read it in full.

On 5 February 2015, Yanis Varoufakis, accompanied by Euclid Tsakalotos, was in Berlin to meet his German counterpart, Wolfgang Schäuble, 2 on the one hand, and Sigmar Gabriel, Vice-Chancellor and Federal Minister for Economic Affairs and Energy within the grand coalition of Angela Merkel’s CDU-CSU and the SPD.

Varoufakis’s meeting with Schäuble began badly, as the latter refused to shake hands with him. Varoufakis made the following two points: “First, I was not asking for a debt write-down, and I made clear that the over-all unity of my debt-swap proposals would benefit Germany as well as Greece. Second, I stressed the importance I placed on catching tax cheats and effecting reforms that would encourage entrepreneurship, creativity and probity across Greek society.” 3

Varoufakis explains that things became more relaxed, with Schäuble suggesting that they use first names. He then offered to send 500 German tax-officials to Greece. “I told him that I very much appreciated his generosity but expressed concern that, finding themselves unable to read Greek tax returns or the associated documentation and therefore incapable of auditing our taxpayers, his officials might become disheartened. I had a better idea: why didn’t he appoint the general secretary of my ministry’s tax office?" (p. 211)

Varoufakis writes that he meant this as a perfectly serious proposal. He took the opportunity to tell Schäuble something that the German minister must already have known: that the tax office of the Greek Ministry of Finance had been placed in private hands. Varoufakis writes: “The person in charge of it was neither appointed by nor answerable to me or my parliament, even though I was accountable for her actions. My proposal was as follows: he would choose a German tax administrator of unimpeachable credentials and spotless reputation to be appointed immediately and to be fully accountable to both of us, and if he or she required additional support from his ministry, that was fine by me.” On this matter, the solution proposed by Varoufakis would, had it been adopted, have again meant surrendering sovereignty, this time to the direct benefit of the German government.

However Schäuble showed no interest and moved on to the topic that was at the heart of his entire strategy and his deeper motivations, that is: “his theory that the ‘overgenerous’ European social model was no longer sustainable and had to be ditched. Comparing the costs to Europe of maintaining welfare states with the situation in places like India or China, where no social safety net exists at all, he argued that Europe was losing competitiveness and would stagnate unless social benefits were curtailed en masse. It was as if he was telling me that a start had to be made somewhere and that that somewhere might as well be Greece." (p. 211-212)

If Varoufakis, Tsakalotos, and the ruling circle around Tsipras had taken seriously the message that Schäuble and his Italian counterpart whom Varoufakis had met in Rome two days earlier had conveyed, they would have understood that the debt-swap proposal stood no chance at all of convincing either the German or any other government of the Eurozone. For all of them, their main objective is increased competitiveness — to the profit of the major private export companies. 4 They have a big stake in reducing salaries, pensions, and social benefits all over Europe, undermining the value of contracts, limiting the right to strike, reducing social expenditure in State budgets, pursuing privatization, and so on. If Varoufakis’s proposal had been taken up, it would have enabled the Greek government to loosen the noose of debt. But the German government and most others (if not all) of the Eurozone need that noose for the pursuit of their model and the objectives they have set themselves. They also nurse an ardent desire to make Syriza’s project fail, in order to show the populations of other countries that there is no point in electing to government forces that claim they can break with austerity and the neoliberal model.

The European leaders can also make use of the single currency, the euro, to undermine the social welfare system. They can use it to impose what is known as internal devaluation, 5 which mainly consists of reducing salaries.

Syriza did not ask its voters for a mandate to leave the Eurozone; however the Tsipras government did have a very clear mandate to take steps to write off most of the public debt. It was therefore crucial that this objective should take priority. Yet Varoufakis and the ruling core around Tsipras immediately decided to work around it or abandon it altogether.

Before the interview was over, Varoufakis took the time to present his arguments in favour of a debt-swap and to hand Schäuble the written proposal that he had already put forward in Paris, London, Rome, and Frankfurt. Varoufakis claims that Schäuble did not so much as glance at the document, but merely handed it on to one of his secretaries of State, saying that it was for the Troika “institutions.”

They finished by giving a press conference together. Schäuble, excluding any possibility of common ground, declared right away: “We agreed to disagree.” (p. 214)

After a light-hearted retort, Varoufakis adopted an ecumenical tone: “I visited a European statesman for whom European unity is a lifelong project and whose work and efforts to unify Europe I have been following with great interest since the 1980s.” Among other things, he said: “On the challenges facing the EU more generally, I suggested that we respect the established treaties and processes without crushing the delicate bud of democracy.” (p. 214) How could anyone seriously think that respecting the treaties and procedures of the EU is compatible with the blossoming of the fragile bud of democracy? Indeed throughout the book, Varoufakis demonstrates that the EU stranglehold violates Greek democracy.

On the Greek side it was unwise to invoke the respect of the treaties as this could provide a powerful argument to European leaders to demand that they should be applied in Athens. It was something to avoid at all costs, since the two Memoranda signed by Greece in 2010 and 2012 themselves amounted to international treaties.

Varoufakis also mentions how, at the press conference, a German journalist asked him whether, as Minister, he would remind Schäuble that the German government was under obligation to extradite Michael Christoforakos, the former head of the Greek subsidiary of Siemens.

Michael Christoforakos was known to have bribed Greek politicians on behalf of Siemens, with a view to obtaining State contracts. The Greek authorities had tried to arrest him, but Christoforakos had fled to Germany where he had been arrested. Since, the German courts have refused to extradite him to Greece.

Varoufakis explains how, although he was scandalised by the German authorities’ refusal to hand Christoforakos over to the Greek judiciary, he could not talk about this in a press conference. 6 To the journalist he replied: “I am sure the German authorities will understand the importance of assisting our troubled state in its struggle against corruption in Greece. I trust that my colleagues in Germany understand the importance of not being seen to have double standards anywhere in Europe.” (p. 216)

The ensuing meeting with Sigmar Gabriel, Vice-Chancellor, Minister for the Economy and leader of the SPD, is reminiscent of his meeting with Michel Sapin on 1 February (see Part 5).

To Varoufakis, Gabriel claimed that he stood by the Syriza government, but then said something quite different to the press: “All was replaced with aggression towards my government, and a harsh lecture on my obligations to our creditors, which were paramount and beyond negotiation. To add insult to injury, he added a reference to the Troika’s ‘inflexibility’.”(p. 219)

By way of reply: “I continued unperturbed and gave my standard spiel about our government’s quest for sustainability by means of moderate proposals to recalibrate radically the Troika’s failed Greek programme.” (p. 219)

Back in Athens

6 February 

From 6 February, Varoufakis set to work with his collaborators (see who they were in Part Four) preparing the first meeting of the Eurogroup to which the Tsipras government had been invited, which was to take place in Brussels on 11 February. “For three days and nights the sixth floor of the ministry teemed with a group of people sent by Lazard and my own close associates, which included Glen Kim, Elena Parati …” (p. 221) James Galbraith, who had just arrived from the United States, joined the team.

At the same time, Varoufakis immersed himself in parliamentary activity and took part in the first meeting of the complete new government. On 6 February, as an MP he took part in the election of the new president or speaker of parliament. “The decision to appoint Zoe Konstantopoulou speaker was rich in symbolism. Over the previous two parliamentary terms this impressively tall and uncompromising Syriza MP had single-handedly exposed the gross violations of procedure employed by previous governments to pass the legislation passed by the Troika. Voting her in as speaker was a joy and a statement that never again would Parliament be reduced to rubber-stamping its own servitude.” (p. 223-4)

This is the only time Zoe Konstantopoulou is mentioned in Varoufakis’s book of over 500 pages. Not once does Varoufakis mention the creation and work of the Truth Commission on Greek Public Debt even though he was present at the inaugural session on 4 April 2015 (see "4 April 2015: a landmark in the search for the truth about the Greek debt" and "Chronique des interventions de l’exécutif grec au Comité d’audit de la dette grecque," available in French or Spanish only). 7 Neither does he ever mention the commission on war damages that Greece demanded of Germany. Of all Zoe Konstantopoulou’s intense efforts to contribute to giving new meaning to parliamentary activity and her participation in public and internal debates over the choices that should be made, he writes not a word.

It is also very striking that he only mentions the name and actions of his own deputy minister, Nadia Valavani, who, among other things, was in charge of the important dossier on tax debt owed to the State. Nadia Valavani was one of the foremost figures of the resistance against the colonels’ dictatorship and paid a heavy personal price for her commitment. As deputy minister, she accomplished an enormous amount of work. 8 While Varoufakis mentions someone like Elena Panaritis at least forty times, Valavani only gets a single mention regarding the finalization of the white paper in response to the humanitarian crisis.

7 February: First meeting of the complete new government

“On Saturday morning, 7 February, I attended our first cabinet meeting.” One imagines that he is referring to the first meeting of the complete new government, but this is not certain… merely a supposition. Whichever meeting it was, he carries on: “Oscar Wilde’s quip about democracy was at the back of my mind: ‘It is impractical and it goes against human nature. This is why it is worth carrying out.’ Having wasted a few precious hours on a largely ceremonial occasion at which too many of us spoke for too long to say too little, I rushed back to my office where the Lazard team and my people were working on the three non-papers I would be taking to Brussels [author’s note: these were working papers with no official status].” (p. 226) This is all Varoufakis tells us about that assembly. His terse comments on the government’s first meeting go a long way to revealing Varoufakis’s perception of how politics should be conducted and his disdain of, or failure to understand, the battles to be waged within a government as well as within civil society, if democracy is to be put into practice. Varoufakis confined himself, without trying to break out of it at the time and without questioning that attitude today, to the intimate inner circle that Tsipras created and to which he was summoned when the prince judged necessary.

Monday 9 February

Varoufakis shows no real interest in the debates of the Greek Parliament. The only time he mentions them in any sort of detail is the session of Parliament held on Monday 9 and Tuesday 10 February, when he presented and defended the proposals he intended to make at the meeting of the Eurogroup that was to take place two days later in Brussels. “Tomorrow I shall be telling my Eurogroup colleagues that we accept the principle of continuity between previous government undertakings and our new government’s mandate.” (p. 227) This was unacceptable in view of the mandate that voters had given the government in the elections of 25 January. The Thessaloniki Programme that was Syriza’s reference during the electoral campaign declared: “We assume responsibility and are accordingly committed to the Greek people for a National Reconstruction Plan that will replace the Memorandum as early as our first days in power, before and regardless of the negotiation outcome.” (see the box on the Thessaloniki Programme in Part 5).

If these words meant anything, it was a commitment by Tsipras as head of government to assert to the Eurogroup and everyone else that his government refused the principle of continuity regarding commitments made by previous governments as far as the Memoranda were concerned. It was not simply a question of the meaning of words, but of the effective application of a policy of change. Varoufakis, by asserting the principle of continuity without the slightest exception, was enclosing negotiations in the narrow, coercive framework of application of the Memorandum. Unfortunately, this was indeed what was to happen, and in particular, because of this early renunciation of applying the programme for which Syriza had been elected to government.

Varoufakis’s reasoning, which resulted in capitulation, deserves to be read carefully: 

The official document describing Greece’s programme, known as the Memorandum of Understanding (MoU), was a list of reforms (austerity targets, the institutional elimination of social benefits, privatization targets, administrative and judicial changes and so on) that the previous government had agreed to as the conditions (conditionalities in Troika-speak) for receiving the second bailout loan. There was no way we would implement these conditions in full, since doing so would involve accepting massive pain for absolutely no gain, especially as more than 90% of the bailout loan had been disbursed before we were even elected. However careful study of the MoU list in 2012 had made clear to me that many of its measures could be implemented without too much social damage. Accepting these elements, which comprised about 70% of the MoU, in return for our demands, while rejecting the genuinely toxic measures of the remaining 30%, was a strategic move. (p. 228)

This negotiating position amounted to abandoning the commitment of the Thessaloniki Programme to replace the Memorandum by a reconstruction plan. He says that he clearly declared to Parliament: “As reasonable partners we shall include in our reform agenda up to 70% of the measures in the existing programme…” (p. 228)

Pursuing this logic of submission, he made the following announcement: “I commit to not passing any legislation during the negotiations that derails our target for a small budget primary surplus.” (p. 227) That meant that the Minister of Finance would oppose any law, however good and necessary it might be, if its impact on the budget might be to prevent the securing of a primary surplus. In other words, the deadly dictatorship of the primary surplus would carry on regardless. This is not theoretical, it is purely practical. When Varoufakis said that, he knew that the creditors, starting with the ECB, had no intention of providing any further finance to Greece (as mentioned above, “90% of the bailout loan had already been disbursed before we had even been elected” and Varoufakis knew that the Troika had no intention of paying the remaining 10%). Yet in the Thessaloniki Programme the possibility of realizing a primary surplus was based on the fact that the money owing to Greece would be paid (in particular the €2 billion of ECB profits on Greek bonds and the outstanding amount that the Troika was to pay Greece under the terms of the 2ndMemorandum, due to end on 28 February 2015). 9 Varoufakis knew that this would not happen, which meant that the money required to combat the humanitarian crisis and revive the economy would not be available unless Greece agreed to respect its previous commitments to pay off its creditors (over € 5 billion to pay the IMF by 30 June) and realize a primary surplus. He was careful not to explain all this to Parliament, mostly composed of people who were not economists, but led them up the garden path as Finance ministers so often do.

“This gesture provoked a great furore: the establishment parties accused me of not having yielded enough to the Troika, while leftists lambasted me for having given away too much.” (p. 228)

He concluded his introduction with strong words, which were in fact soon to apply to the line he had presented to Parliament with Tsipras’s approval: “If you cannot imagine walking out of a negotiation, you should never enter it. If you cannot fathom the idea of an impasse you might as well confine yourself to the role of a supplicant who implores the despot to grant him several privileges but who accepts in the final analysis whatever the despot grants.” (p. 227-228)

This kind of declaration is typical of Varoufakis’s and Tsipras’s approach: adopt a very moderate attitude during the negotiation, which is secret, making multiple concessions, while continually reiterating strong radical language in public. As the mainstream media, the Troika and Greece’s rightwing parties were attacking Varoufakis and Tsipras as irresponsible lefties, the illusion worked. Their radical politics and their will to resist the Troika appeared indisputable. 10

In his summary of how he presented his policy to the Greek Parliament, Varoufakis never once alludes to the demand for cancellation of greater part of public debt as enshrined in the Thessaloniki Programme. This contrasts with the speech made in the same forum by Zoe Konstantopoulou at the time of her election as Speaker of Parliament on 6 February 2015: 

Initiatives ... will be taken to ensure that Parliament makes an essential contribution in promoting the demands for cancellation of most of the debt, the integration of clauses on growth and guarantees to stop the humanitarian crisis and come to the rescue of our people. Parliamentary diplomacy is neither purely ceremonial nor the equivalent of public relations. It is a precious tool that we need to make good use of through the President, as well as through international relations committees and friendship committees.

We need to ensure, in this way, that the case of Greece — the demand for a fair solution that will benefit our people, through the cancellation of debt and a moratorium on payments — becomes the object of energetic claims in an interparliamentary campaign. This campaign will rely on directly informing other parliaments and national assemblies, as well as those European populations who are already mobilized in solidarity with our people”, (see Discours prononcé par Zoé Konstantopoulou, lors de son élection en tant que Présidente du Parlement hellénique, in French only).

The Speaker of the Greek Parliament was right to insist on the need to declare a moratorium on debt payments as a means of getting most of the debt cancelled. It was a condition sine qua non of the fulfilment of Syriza’s commitments and the start of the changes the population had been promised.

10 February

Varoufakis sought the support of the OECD. On the evening of 10 February, Varoufakis received with great ceremony a delegation from the Organization of Economic Cooperation and Development (OECD). Angel Gurria, the general secretary, came to Athens in person. It is perfectly understandable that a government that had been stigmatized by part of the mainstream international press and the Troika would wish to make a clean break. But Varoufakis went over the top: “Early next morning we met again, this time at Maximos, in front of the cameras and with great pomp and ceremony. The prime minister welcomed the OECD’s secretary general, with myself, Deputy Prime Minister Dragasakis and Economy Minister Stathakis also present, thus formally making it known that the new Syriza government would be working closely with the rich countries’ club to develop a new pro-growth reform agenda.… Having such a prestigious global institution not only contribute to that agenda but then vouch for it once it was finalized would be a powerful means to pre-empt the inevitable criticism.” (p. 230) Let us recall that the OECD is an international organization which participates directly in amplifying neoliberal policies, in particular by giving them a pseudo-scientific stamp of approval. 11 Trying to break away from stigmatization does not mean you should flatter institutions that are hostile to the idea of abandoning neoliberal structural reforms.

11 February: The first meeting between the Eurogroup and the Greek government

Varoufakis’s description of the composition and functioning of the Eurogroup is very useful and one of the reasons that his book is worth reading. “The Eurogroup is an interesting beast. It has no legal standing in any of the EU treaties and yet it is the body that makes Europe’s most vital decisions. At the same time, most Europeans, including most politicians, know almost nothing about it. It convenes around a huge rectangular table. Finance ministers are seated along its two longer sides.”

Most importantly, he adds: 

Real power sits at either end of the table. At one end, to my left, sat the European president, Jeroen Djisselbloem. On his right was Thomas Wieser, the Eurogroup Working Group president and the real power at that end of the table; on his left were the IMF representatives, Christine Lagarde and Poul Thomsen. At the other end of the table was Valdis Dombrovskis, commissioner for the euro and social dialogue social, whose real job was to supervise(on behalf of Wolfgang Schäuble) Pierre Moscovici, the economic anfd financial affairs commissioner, who sat on Latvian’s left. On Dombrovski’s right, meanwhile, sat Benoît Cœuré and beyond him, Mario Draghi representing the ECB.

At the same corner of the table as Draghi, but on the longer side and at right-angles to him, sat Wolfgang Schäuble. Their proximity would on occasion give rise to intense heat, though never to any actual light. (p. 231-232)

In a way, the Eurogroup is the institutionalization of the Troika, as it unites the ECB, the IMF, the Finance ministers of the Eurozone and representatives of the European Commission.

In normal Eurogroup meetings a fascinating ritual illustrated the manner in which the Troika and its processes had taken over the governance of continental Europe. (p. 232)

Every time an item was tabled for discussion — for example, the French national budget or developments in Cyprus’s banks — Dijsselbloem would announce the topic and then invite the representatives of the institutions to present their views in turn: first, Moscovici on behalf of the European Commission, then Christine Lagarde (or Poul Thomsen in her absence) on behalf of the IMF, and finally Mario Draghi on behalf of the ECB (with Benoît Cœuré stepping in on the rare occasions that Mario was absent). Only after these unelected officials had given their assessment and set the tone and terms of the debate did the elected ministers get a chance to speak. Moreover, for almost all the meetings at which I was present the ministers received no substantial briefing on any of the topics under discussion. (p.232)

Varoufakis observes that: “the purpose of the Eurogroup is for ministers to approve and legitimize decisions that have already been taken by the three institutions.” (p. 232)

Varoufakis mentions that he was accompanied by Dragasakis and Chouliarakis, the President of the Council of Economic Advisers (whom Dragasakis had placed on Varoufakis’s team). “Our government faces the task of earning a precious currency without depleting an important capital good: we must earn your trust without losing the trust of our people.” (p. 233)

He then explains how important it is for the Greek government to take new measures that would correct the previous, unfair, ones and respond to the humanitarian crisis by reemploying workers who had been laid off, increasing retirement pensions for people living below the poverty threshold and bringing back the minimum wage in the private sector.

“Those assembled in the Eurogroup had my commitment, I told them, that none of these small-scale measures would have a measurable fiscal impact.” (p. 234)

“I mentioned our new collaboration with the OECD and proposed to work closely with the IMF and the ECB in its areas of expertise.” (p. 239)

He explained that the government would not be dogmatic over privatizations… some could go ahead. He expressed the desire to create a public development bank and another public bank to be set up in collaboration with the ECB that would take charge of under-performing loans from private banks.

He uttered one ominous sentence, in continuity of what he had announced to Parliament: “our government, whether we liked it or not, had been committed by previous Greek governments to a programme.” (p. 234)

Then he began to talk about debt: 

The Troika was demanding that the bankrupt Greek state pay just under €5 billion to the IMF by July 2015, and then, during July and August, a further €6.7 billion to its own central bank. I proposed that we begin with a modest agreement that the ECB would pay back the €1.9 billion it owed Greece from its past year’s profits on our SMP bonds [Author’s note: i.e. bonds that the ECB had bought from private banks in 2010–2012]. This was Greece’s own money. If the creditors wanted us to keep up our repayments to them, the least they could do was give us access to our own money. Anything less would surely be an invitation to default. (p.235)

Varoufakis adds in a footnote what we explained in the part dealing with his speech before the Greek Parliament two days earlier, i.e. that he knew, when he said that, that the Troika had decided to keep that money. He had known since the eve of the elections when they received a document from Thomas Wieser, vice-president of the Eurogroup, (Chapter 8, note 8). This is also related at the beginning of the Part 5 of this series.

Of course, Varoufakis was right to ask that this sum of almost €2 billion be paid to the Greek government. 
He concludes by saying that the Greek government wishes for “genuine negotiations in good faith for forging a different contract between us, based on a realistic primary surplus effort and efficient as well as socially just structural policies — including of course many elements of the previous programme that we accept. We need assurances on this point.” (p. 235)

He adds: “Such an extension cannot be taken as acquiescence to the logic of the former agenda that has been rejected by our people.” (p. 235) In saying this, he is in flagrant contradiction with another part of his speech cited above where he declares: “our government, whether we liked it or not, had been committed by previous Greek governments to a programme.” (p. 234)

In the ensuing discussion, Schäuble immediately declared: “Elections cannot be allowed to change economic policy.” (p. 237) Finance ministers from the Baltic republics, Slovenia, Slovakia, Finland, Belgium, Spain, Austria, Ireland and more spoke to back him up.

Varoufakis says that in his answer he declared: “if you agree with Wolfgang, then I invite you to say so explicitly by proposing that elections should be suspended in countries like Greece until the country’s programme is completed.” (p. 238)

Jeroen Dijsselbloem and Thomas Wieser then refused to allow the secretary to distribute the three documents Varoufakis had prepared for the Eurogroup.

Now we come to the draft communiqué that was to have been published after this meeting. Varoufakis says: “One glance was enough to know it was unacceptable as it explicitly committed Greece to completing the second bailout programme via the implementation of the entire MoU ‘with maximum flexibility within the programme to accommodate the new Greek authorities’ priorities’.” (p. 239)

Varoufakis asked for the word “amended” to be added in front of the word “programme.” Schäuble refused this amendment, saying that if the Memorandum was amended, it would have to go back to the vote in the German parliament, which was inconceivable.

So Varoufakis refused. Consequently, Greece was threatened: if there was no agreement on the communiqué, the ECB would totally cut off all liquidities to Greek banks at the end of the second Memorandum, that is, on 28 February. Varoufakis refused this ultimatum. Dijsselbloem suggested dropping the proposal of the word “amend” and replacing it with the word “adjusted.” Varoufakis accepted on condition that the text mention that in Greece there was a humanitarian crisis. Dijsselbloem refused. Christine Lagarde, Managing Director of the IMF, put pressure on Varoufakis.

Varoufakis then consulted Tsipras and Pappas by telephone. They were also in Brussels, preparing for the meeting of their first EU summit, due to start the next day. The conversation lasted an hour. Varoufakis says: “I must have changed my mind three or four times, oscillating between ‘Stuff them!’ and ‘Let’s accept the damned communiqué and fight the Troika when it comes to defining what “an adjusted programme” should look like’. Dragasakis, meanwhile, was signalling to me that I should persuade Alexis to yield.” (p. 243)

Finally, Tsipras told Varoufakis to refuse the text, which ended that meeting of the Eurogroup. Varoufakis summarized this first round with the Eurogroup: “The Finance ministers of 19 European countries, the leaders of the ECB, the IMF and the European Commission, not to mention deputies, countless translators and support staff had just wasted ten hours blackmailing one minister. What a waste of human potential, I thought.” (p.245)

He phoned the Greek delegation’s office to update Tsipras.

“Put on a brave face," he said, "People are celebrating in the streets and supporting us. Cheer up!" A secretary showed me a tweet from his account with a picture of a rally and the message: "In the cities of Greece and Europe the people are fighting our negotiation battle. They are our strength." Indeed, as I was to find out the next day, thousands of cheering people had gathered in Syntagma Square while I was holed up with the Eurogroup. They were dancing and waving banners proclaiming BANKRUPT BUT FREE and STOP AUSTERITY. Simultaneously, and even more touchingly, thousands of German demonstrators, led by the Blockupy movement, were encircling the ECB building in Frankfurt in solidarity with us. (p. 245)

This illustrates perfectly the potential for mobilization that there would have been in the following days, had Tsipras and Varoufakis kept to their line of refusing ultimatums; if they had implemented the moratorium on debt payments, the audit, the unilateral haircut of bonds held by the ECB; if they had set up a system of parallel payments; if they had exercised their right to vote in Greek banks and if they had controlled capital flows by decree.

But let us return to Varoufakis’s story. He explains that after contacting the office of the Greek delegation and having learned with joy of the mobilizations, he gave a press conference as one would expect. According to his account, this is what he said about the meeting of the Eurogroup: “I was given a wonderful opportunity and a very warm welcome to present our views, our analysis, our proposals, both regarding substance and regarding the road map. And since we are meeting again on Monday, I think it is perfectly normal and natural that we should simply move to the Monday meeting.” (p.246)

“Friends and critics have censured me for deceiving the public. I have been asked many times: why did I not spill the beans about what actually happened in there? Why did I not expose their blackmail and contempt for democracy? The answer I give is: because the time had not yet come.” (p.246)

In fact, from that moment on, apart from one event that took place five days later on 16 February, Varoufakis entered into an infernal logic whereby it would never be the right moment to tell the truth about what was happening at the level of negotiation. From 20 February until the final capitulation of July 2015, the attitude Varoufakis adopted was that of secret diplomacy.

With all the microphones and cameras that were turned his way while he was minister, apart from on 16 February, he never made use of the opportunity afforded him to inform public opinion about what was really going on in the negotiations. The same is true of Alexis Tsipras with the exception of a very brief period at the end of June 2015 when he called a referendum for 15 July.

12 February: A Concession, Really?

Varoufakis explains that his refusal to sign convinced the European leaders that they should make a concession. Dijsselbloem, apparently under orders from Angela Merkel, made contact with Tsipras to propose that they should announce that the Greek government and the Eurogroup were going to discuss technicalities to help them forward in executing the current programme while taking into account the new government’s objectives. One wonders whether Varoufakis is right in asserting that this was a concession. Nothing is less certain. The European leaders, in speaking of executing the programme, were maintaining their position. They wanted to give the impression that they were open to negotiation while at the same time demonstrating that the Greek government was incapable of behaving in a responsible and constructive fashion.

Moreover Varoufakis writes that from that moment on Merkel and Tsipras were in direct contact, which later proved to have negative effects.

He adds that Tsipras began to distance himself from him, Varoufakis, the only minister who was convinced that they should be ready to take unilateral measures such as the haircut on bonds held by the ECB or the suspension of payments. When he says this, he omits to mention that Lafazanis, who was one of the six main ministers, was also favourable to unilateral actions, starting with the suspension of payments. Not to mention the four deputy ministers who belonged to the Left Platform (Nadia Valavani, Dimitris Stratoulis, Costas Isychos, and Nikos Chountis) and the Speaker for the Hellenic Parliament, Zoe Konstantopoulou. In fact, Varoufakis inadvertently reveals that he had never seriously imagined forming a front with the other members of the government and parliament in order to work out the orientation required to fight back on the same level as the Troika’s attacks. Varoufakis, by explaining to his readers that he was alone, is seeking, perhaps unconsciously, attenuating circumstances for his own diffident attitude.

13–15 February in Brussels

Varoufakis remained in Brussels after the meeting of the 11th until the next meeting of the Eurogroup, slated for 16 February. According to Varoufakis: “The German Chancellor wanted our technical team to meet the Troika’s in order to begin discussion of our government’s proposals and priorities.” (p. 251) Varoufakis put together a team composed of Chouliarakis, four of Dragasakis’s advisers, Elena Panaritis and Glenn Kim, who were to work with the Troika team on an attempted rapprochement. (For more on Varoufakis’s advisers, see Part 4). In the wings, Varoufakis says, there was also an envoy from the Lazard Bank and James Galbraith. Varoufakis further received long-distance advice from Jeffrey Sachs and Willem Buiter (Chief Economist of the North American bank Citigroup).

On the periphery of these official work meetings which took place during these two days in Brussels, Varoufakis adopted a position on capital control: he opposed it. It is no surprise that his advisers from the Lazard Bank and Citigroup, as well as those who had worked at the World Bank, like Panaritis and Sachs, were all totally against any control of capital. So was Galbraith.

The very least that one can say is that this was a grave error. There needed to be controls in place to avoid capital flight. Obviously there was no need to prevent small amounts from being sent abroad. What was needed was a selective control of major financial flows. It was perfectly feasible.

On 14 February, Tsipras handed Varoufakis a draft communiqué that the President of the European Commission, Jean-Claude Juncker, had sent him. This draft was of quite a different tone from the one that Dijsselbloem and Schäuble had tried to impose on 11 February, but it was only a feint. The very next day, Varoufakis was brought back to earth. While the afternoon of 15th had begun well with a meeting with Moscovici, who gave him Juncker’s text, a little later Dijsselbloem sent him a different one. Varoufakis tells us: “I read it. It was worse even than the draft that we had rejected at the first Eurogroup. It committed the Greek government ‘to complete the current programme,' allowing us to pursue our mandate only within the ‘existing built-in flexibility of the current programme.' All the concessions in the drafts presented by Juncker the previous night and by Pierre a few moments earlier had been expunged. Even the phrase ‘adjusted programme’ had been dropped. In this draft the programme, undiluted by any adjective, returned with a vengeance.” (p. 260)

16 February in Brussels: the Second Failure of the Eurogroup

On 16 February, the second meeting of the Eurogroup rapidly ended in failure since the text submitted to Greece was worse than the one it had refused a few days earlier.

The ensuing press conference was about the only time that Varoufakis spoke publicly of disagreement. He summarizes what he said to the press as follows: 

I am pleased to report that the negotiations were conducted in a collegial spirit, clearly revealing a unity of purpose … to establish common ground, so as to reach a meaningful, sustainable long-term contract between Greece, official Europe and the IMF. Moreover I have no doubt that they will continue tomorrow and the day after until there is agreement. If this is so, why have we not managed to agree on a communiqué, a simple phrase, that will unlock immediately this period of deliberation?

The real reason concerns a substantial disagreement on whether the task ahead is to complete a programme that this government was elected to challenge the logic of, or to sit down with our partners with an open mind and rethink this programme, which in our estimation and in the estimation of most clear-thinking people has failed to stabilize Greece, has generated a major humanitarian crisis and has made reforming Greece, which is absolutely essential, ever so hard. (p. 264)

Varoufakis explained to the press what happened between 11 and 16 February, and he adds for his readers that for the second time in five days, the Greek government had said no to the Troika.

This second refusal gave rise to a demonstration of support of the government in Greece and the government’s popularity rating reached 75%.

But Varoufakis and Tsipras never appealed to the populations of Europe and elsewhere for support. This played a non-negligible role in the difficulty of developing a powerful movement of international solidarity with the people of Greece. Of course, full use should also have been made of the communication possibilities offered by the social networks, but the Greek government and the ruling core around Tsipras did not do this either.

Trying to function within a framework of secret diplomacy also encouraged the European leaders to maintain the worse forms of blackmail with no risk of anyone finding out.

17–19 February in Athens: The Turning Point Towards the Agreement of 20 February and the Extension of the Memorandum

Varoufakis explains that at the first meeting of what he calls the “war cabinet,” after the failure of 16 February, Tsipras, Pappas, and Dimitris Tzanakopoulos, Tsipras’s Chief of Staff, were in favour of breaking off negotiations. Varoufakis says that Tzanakopoulos shouted at him: “If you want to sign the MoU you will have to do it over my dead body.” (p.266)

Of Tsipras, he writes: “he also lost his cool on occasion and threatened to blow up the negotiations.” (p.266) Spyros Sagias (the Cabinet Secretary) and Varoufakis were in favour of pursuing negotiations.

Varoufakis ended up managing to convince the rest of the war cabinet that they should obtain an extension of the Memorandum. “My view, with which Sagias and Dragasakis agreed, was that requesting an extension was part of our mandate as long as we did not commit to the programme in order to secure it.” (p. 269)

I will be arguing in the next part of this series why it would have been better to refuse the extension of the Second Memorandum.

Varoufakis, for his part, wanted an extension of the Memorandum although he was well aware that Berlin had four demands: that structural reforms should be continued to improve competitiveness (which clearly meant continuing attacks on wages and social security and continuing with privatizations); keeping the IMF involved in any future agreement (which implied extending the current second Memorandum with a third Memorandum, even though Varoufakis would not acknowledge this 12); defining what was meant by sustainability of debt; and above all, "Recognize Greece’s financial obligations to all its creditors." (p. 269) This final point sparked lively reactions in the cabinet. Dimitris Tzanakopoulos, Chief of Staff, was against it: “How can we possibly recognize our debt to all our creditors?” (p. 269)

Varoufakis writes that he replied: “we could ‘recognize’ Greece’s public debt while at the same time insisting that it be immediately restructured so that the creditors could get more of their money back. 13 The wing of Syriza demanding immediate and unilateral haircuts on the basis that the debt itself was illegal would of course be outraged, but ultimately this approach prevailed in the war cabinet. It was agreed that I would write to the Eurogroup with a formal extension request.” (p. 269-270)

This decision was clearly flying in the face of Syriza’s and the government’s programme.

Varoufakis further explains: “The more likely scenario, however, was that the extension was a tactical ploy: by delaying any outcome they [the European leaders] were simply waiting for the depletion of both our current popularity and our small liquidity reserves so that by the time the extension expired in June they could be sure of our exhausted government’s total capitulation.” (p. 270)

Varoufakis asserts that faced with this scenario, the war cabinet gave him their agreement: 

to request the extension while at the same time signalling to the Troika that any attempt to wear us down through a tightening of the liquidity noose would be met with a refusal to make the forthcoming payments to the IMF; that any effort to push us back into the straitjacket of its failed programme or to deny us debt restructuring would be met with a cessation of negotiations; and that any threat of closing down our banks and imposing capital control would be met with unilateral haircuts of the ECB’s SMP bonds, with the activation of the parallel payments system and with changes to the law governing the Central Bank of Greece in a manner that restored the Parliament’s sovereignty over it. (p.270)

The problem was that this threat was never, ever, communicated to the Troika. Nor was it ever made public. Varoufakis acknowledges this. As for putting it into practice, as we shall see later on, Tsipras and the majority of the cabinet clearly opposed the idea and Varoufakis accepted that until the final capitulation in July 2015.

Furthermore, at this stage, we only have Varoufakis’s testimony. Will another account eventually emerge that confirms his assertions? It is highly improbable that Tsipras would confirm Varoufakis’s version as that would be tantamount to admitting his own guilt.

Everything was decided in a very small committee and the rest of the government was never informed; neither was the Syriza leadership. The Greek population was kept totally in the dark.

In any case the threat that Varoufakis mentions was never communicated to the Troika.

Varoufakis writes: “the worst strategy would be to request an extension, get it, but then fail to signal our readiness to trigger these measures if our creditors were to stray from the spirit of the interim agreement. Were we to make that error, I argued, they would drag us through the mud over the period of the extension and then, at the moment of our greatest weakness, around the end of June, slaughter us.” (p. 270) Yet this is exactly what happened. Varoufakis, with the agreement of the core advisers around Tsipras, asked for the extension of the Memorandum without signalling any determination whatsoever to take any action and the creditors dragged the government through the mud and brought it to official capitulation.

On 18 February Varoufakis sent the Eurogroup a letter from which he quotes several terrible passages: “‘The Greek authorities recognize Greece’s financial obligations to all its creditors,' [and they intended] ‘to cooperate with our partners in order to avert technical impediments in the context of the Master Facility Agreement which we recognize as binding.'" 14 (p.271) Varoufakis adds that this was “the furthest we could go to satisfy Berlin” (p.271) That is putting it mildly.

20 February in Brussels: The Road to Capitulation

Varoufakis went to Brussels and just before the Eurogroup meeting began, and Dijsselbloem gave him two pieces of bad news, which Varoufakis does not see as such: 1. The €11 billion of the Hellenic Financial Stability Fund (HFSF) left over after the recapitalization of banks – money that the Tsipras government had planned to use to realize part of its electoral promises – was being sent to Luxembourg instead of being placed at Greece’s disposal; 2. The Memorandum was to be extended to 30 June (which suited Varoufakis).

“I told Jeroen [Dijsselbloem] I would grant these two concessions, which were of little real consequence as far as I was concerned, in return for something I truly valued: policy space.” (p. 273) He goes on: “I demanded that the MoU, or at least the 30% of its articles that were unacceptable, be replaced with a new list of reforms proposed by our government, while our primary surplus target be reduced from 4.5 per cent of national income to no more than 1.5 per cent.” (p.273)

Varoufakis adds: “To my great surprise, Jeroen agreed.” (p.273) Now one of the basic rules of negotiating is that if your enemy accepts your terms from the outset, you have got off to a bad start. Dijsselbloem also accepted that Greece would hand him a list of reform proposals that the Troika institutions could accept or reject as they saw fit.

Varoufakis writes: “If this paragraph made it through to the final communiqué, I thought, it would constitute a triumph for the Eurozone’s weaker countries. It would be the first time a government incarcerated within a bailout programme had been granted the right to replace the Troika’s MoU with an agenda for reform of its own composition.” (p. 273) This is absolutely insane. See extracts from the agreement Varoufakis signed with the Eurogroup on 20 February in Brussels in the Box below.

Excerpts from the agreement Varoufakis signed with the Eurogroup on 20 February. 15

The Greek authorities will present a first list of reform measures, based on the current arrangement, by the end of Monday 23 February. The institutions will provide a first view [of] whether this is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review. This list will be further specified and then agreed with the institution by the end of April.... (p.273)

Only approval of the conclusion of the review of the extended arrangement by the institutions in turn will allow for any disbursement of the outstanding tranche of the current EFSF [European Fund for Financial Stability] programme and the transfer of the 2014 SMP [Security Markets Programme] profits. Both are again subject to approval by the Eurogroup.

The Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and timely....

The Greek authorities have also committed to ensure the appropriate primary fiscal surpluses or financing proceeds required to guarantee debt sustainability in line with the November 2012 Eurogroup statement. The institutions will, for the 2015 primary surplus target, take the economic circumstances in 2015 into account.

In light of these commitments, we welcome that in a number of areas the Greek policy priorities can contribute to a strengthening and better implementation of the current arrangement. The Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions.

According to a euphoric Varoufakis, there was one drawback: “The communiqué’s major downside was that it offered Greece no respite from the liquidity squeeze.” (p. 273) In other words, the asphyxia that had officially been inflicted on Greece since 4 February would continue. The rope that was strangling the country was to function like a noose: while Greece was to repay €7 billion’s worth of debt by 30 June 2015, the creditors would make no further payment of fresh money and worse still, the ECB would continue to limit Greek banks’ access to emergency liquidities. This diminished their ability to buy bonds issued by the Greek Treasury to finance themselves and would thus reinforce the government’s asphyxia.

Varoufakis explains that during the Eurogroup meeting, he received a text message from Emmanuel Macron asking how things were going which he answered: “‘We had a good result,’ I told him. ‘Now we need to get down to work. Thanks for the help.’” (p. 276). Varoufakis adds: “Emmanuel replied with a comradely ‘Let’s keep fighting.’” (p. 276)

Next Varoufakis gave a press conference: “Having thanked Jeroen for steering that evening’s Eurogroup towards an interim agreement, I hailed it as an opportunity to get down to work. Over the weekend, I informed the press, my team and I would be working around the clock to prepare our government’s list of reforms to be submitted in three days’ time. ‘It will be hard work,’ I admitted, ‘but we shall do it gladly now that we have moved on to a new relationship of equals...'"(p. 278)

In reality, the agreement of 20 February is the equivalent of a vassal subjecting himself to a suzerain while proclaiming himself the equal of the suzerain. Let us recall Varoufakis’s words before the Hellenic Parliament just ten days before: “If you cannot imagine walking out of a negotiation, you should never enter it. If you cannot fathom the idea of an impasse you might as well confine yourself to the role of a supplicant who implores the despot to grant him several privileges but who accepts in the final analysis whatever the despot grants.” (p. 227-228)

Varoufakis reports contradictory reactions. Jeffrey Sachs congratulates him, while he is severely criticized by Manolis Glezos, a hero of the Resistance and Syriza MEP since February 2015, and the well-known composer Mikis Theodorakis — both leftwing childhood heroes of his, as he puts it (p. 281) In a public communiqué, Manolis Glezos apologized to the Greek people for having encouraged them to vote for Syriza in January 2015.

Varoufakis explains that from 21 February, he got on with writing the reforms that they would propose “as a substitute for the MoU" to be submitted to the Eurogroup on 23 February. It is interesting to note that today, Varoufakis makes no bones about the fact that the idea was to try to amend the current Memorandum; but at the time, Tsipras and he told the population that it was a new agreement and that Greece was now no longer the prisoner of the Memorandum and the Troika, renamed “the institutions.”

On the evening of 23 February, Varoufakis writes, “Once it [the text] was submitted on Monday evening, Mario Draghi, Christine Lagarde and Pierre Moscovici would have the following morning in which to review it before the Eurogroup teleconference scheduled for Tuesday afternoon. There would be no quibbling; the three of them would pass judgement on the list of measures in turn, giving it either a green light or a red flag, with ministers having no say.” (p. 281-282) How then could anyone claim, as Varoufakis did in public at the time, that the Troika no longer existed and that Greece was free again? He himself acknowledges that he agreed to submit to Lagarde (IMF), Draghi (ECB) and Moscovici (European Commission) the list of proposals that the Greek government then intended to send officially to the Eurogroup.


The agreement made with the Eurogroup on 20 February 2015 states that: “The Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and timely” and “commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms.” By signing it, Varoufakis and Tsipras were breaking their commitment to put an end to the Memorandum and to replace it with a programme of reconstruction. They renounced their intention to question the legitimacy of the debt and suspend payments. They were subjecting Greece to the whims and wishes of the Troika once more, for it was quite certain that the latter was not going to agree to a programme of measures enabling the government to realize its electoral promises. The agreement of 20 February was the first official document whereby Varoufakis and Tsipras abandoned the main proposals of the programme for which Syriza had been brought to government.

As Stathis Kouvelakis wrote in an interview with Alexis Cukier in 2015: 

Things are actually quite simple: the European institutions are trying to construct an iron cage inside which they can lock up the new government to prevent it from carrying out its programme. It is a matter of proving that any policy other than those of austerity and neoliberalism is impossible in the present context and that, whatever the mandate entrusted to a government, whatever the election results, it will always be the same policies that will be applied. Their primary objective is clearly to humiliate Syriza and see the Greek government on its knees. This is also a warning for Podemos and any other force in Europe likely to get into power and to question the policies of austerity and the mechanisms of indebtedness. 16

For its part, the CADTM Europe had published a communiqué ("Hands off Greece, Fighting Back and Resisting") on 31 December 2014 that rang out as a warning: 

Even before the dissolution of the Greek parliament and the ensuing electoral campaign, international and European powers had launched a campaign of lies and threats aimed at scaring the Greek electorate away from voting for Syriza (the Coalition of the Radical Left) in the upcoming general election to take place on 25 January. Seconded by the mainstream European media, the ‘top dogs’, Juncker, Merkel, Hollande, Renzi and Schäuble, are preparing yet another brutal intervention into Greece’s home affairs, a country they have already turned into a mess of social ruin through the inhuman and barbarous austerity policies they have dictated.

The CADTM has not the least doubt about the real intentions of those who have used Greece as a European testing ground for the most extreme neoliberal policies and used the Greeks as guinea pigs for social, political and economic shock therapies. We must be ready for an escalation of their campaign. They cannot tolerate that SYRIZA be allowed to win and become an example to emulate throughout Europe. They will stop at nothing because they are well aware that the result of the Greek elections will be decisive in the social war they are waging against the vast majority of European populations!

It is because the stakes are so high that we can expect ‘the top dogs’ in Europe and Greece to refuse to accept the result of the polls which, for the first time in Greek history, looks set to bring victory to the Greek left. There is no doubt that they will immediately try to stifle the left wing government that will be the democratic result, because were it to succeed, that success would be interpreted by the workers and peoples of Europe as a tremendous encouragement to resist.

In Part 7, we shall see that just a few days after 20 February 2015, Varoufakis, with Tsipras’s consent, would sign a document produced by the Troika asserting the primacy of the current Memorandum over any measures proposed by the Greek government.


1. The first three paragraphs of this article were taken from the previous article of this series Part 4.

2. Federal Minister of Finance from 28 October 2009 to 24 October 2017. Since then, he has presided the Bundestag.

3. Y. Varoufakis, Adults in the Room: my Battle with Europe’s Deep Establishment, The Bodley Head, London, 2017, Chapter 7, p. 211.

4. Moreover it is very hard to believe that Varoufakis, Tsakalotos, and the ruling circle around Tsipras seriously believed that their proposal would convince the European leaders.

5.The countries belonging to the Eurozone cannot devalue their currency as they have adopted the euro. So the European authorities and their national governments apply what is known as internal devaluation. They impose pay cuts which greatly benefit the management of major private companies. Thus what they call internal devaluation is synonymous with pay cuts. This means is used to increase competitiveness but turns out to be ineffective in recovering economic growth, as austerity policies and repression of wages are practiced in all countries. On the other hand, from the employers’ point of view, the Eurozone crisis which has worsened since 2010-2011 is to their advantage. The legal minimum salary has been considerably reduced in Greece, Ireland and other countries.

6. Varoufakis adds: “As these lines are being written, Michael Christoforakos continues to live freely in Germany, Stournaras continues as Governor of Greece’s Central Bank, the Siemens scandal has still not resulted in a single politician facing charges.” Note that in 2012 Stournaras had put forward to the Greek Parliament an extra-judicial resolution to be signed by Siemens which would prevent any further prosecution. Let me add that trials relating to Siemens’ actions have been underway in Greece since September 2017, with the prosecution of 18 of Siemens’s senior executives (including Christoforakos) in Greece and Germany, for the corruption of “unidentified” agents of the State. Christoforakos’s diaries handed over by his former secretary show that he had repeated meetings with some of the main political figures of New Democracy and Pasok, to pay them “soft commissions.”

7. See also the official act establishing the Truth Committee on Greek Public Debt, "Grèce : Acte officiel de création de la Commission de la Vérité sur la Dette publique" (in French only).

8. Valavani took the initiative of elaborating a law which was the sole measure to combat the lethal effects of Memorandum austerity on the real economy, with the possibility of clearing the tax debts of individuals or companies in 100 payments. See "Grèce : Troisième mémorandum - Le renversement d’un renversement" (in French only).

9. The Tsipras government also hoped to be able to count on the sum of €11 billion which was the balance of the amount allocated for the recapitalization of banks and that Syriza wished to redirect towards the creation of a development bank and reinforcing the public sector. Excerpt from the Thessaloniki Programme: “Regarding the starting capital of the intermediary organization and the cost of establishing a public development bank as well as special-purpose banks, totalling €3 billion, we will finance it from the so-called ‘comfort pillow’ of around €11 billion of the Hellenic Financial Stability Fund, intended for the banking system.” (see Part 5)

10. Stathis Kouvelakis describes the feeling that a fundamental change was underway: “The speech Tsipras gave on general policy in Parliament on 8 February was a moment of truth. It came after the symbolic breaks, just as the new government was entering office, with the civil oath and the placing of a wreath at Kaisariani on the memorial to the 200 Communist heroes of the Resistance executed by the Nazis on 1st May 1940. Let us not forget that those 200 executed Communists were the entire leadership of the party. This gesture marked the new government as part of a powerful historic strand, deeply embedded in the history of the popular movement and of the Communist left wing in Greece. In that moment of the speech on general policy, one felt that the break was once again truly within reach.”(Stathis Kouvelakis, La Grèce, Syriza et l’Europe néolibérale. Entretiens avec Alexis Cukier, La Dispute, Paris, 2015 (in French), p. 17-18. Trans. CADTM). Of course, various other left-wing organizations did not fail to attack or severely criticize Tsipras: these were the KKE — the highly sectarian Communist Party of Greece — and non-parliamentary left-wing organizations such as members of Antarsya (the Front of the Greek Anticapitalist Left) and Anarchist groups that occupied Syriza’s premises soon after the government had been constituted.

11. Éric Toussaint, “How to apply unpopular austerity policies. The OECD issues guidance to governments.” 

12. Indeed, there is no other possible interpretation, as extending the current Memorandum automatically implied that the partners would not change. Thus, for Berlin, insisting on the presence of the IMF could only mean a Third Memorandum to be signed at the end of the extension of the current one. Moreover this is what Berlin achieved in July 2015.

13. Passage underlined by Varoufakis.

14. Underlined by Eric Toussaint.

15. The original text can be consulted at: http://www.consilium.europa.eu/en/p...

16. Stathis Kouvelakis, La Grèce, Syriza et l’Europe néolibérale. Entretiens avec Alexis Cukier, La Dispute, Paris, 2015, p. 76-77. (In French; English trans. CADTM)

Eric Toussaint is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France. He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present (2012), etc. Since the 4th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.