The answer came once we had reconvened – from Wolfgang. If he were to receive my proposals, he claimed, he would be legally obliged to table them in the Bundestag, Germany’s federal parliament in Berlin. And then all hell would break loose as the various factions within his party and the opposition raised concerns about them. My proposals would be dead even before the institutions had had a chance to consider them. ‘So, take your proposals to the institutions,’ he suggested once more. (Indeed, whenever I sought to share my proposals with other ministers in various Eurogroup meetings, I would be rebuffed. On one occasion Jeroen informed me that were I to email my proposals to the other finance ministries I would be in breach of protocol, which would mean the proposals could never be considered.) Not wishing to clash over everything at once and with the draft communiqué about to be distributed, I held my tongue.
Eventually the draft was handed out. 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’.
‘Maximum flexibility’ is the troika’s equivalent of Henry Ford’s sales pitch for the Model T: you can have it in any colour you wish as long as it is black. It meant that the overall level of fiscal cuts was non-negotiable, although Athens could propose an alternative distribution of the pain within the population. It was the fiscal equivalent of Sophie’s Choice.
Taking the floor I pointed out that Jeroen’s draft constituted a wholesale rejection of the bridge we had proposed, supported by France, between the programme of the MoU and our fresh mandate. To demonstrate good faith, I said I would accept it nonetheless if we could agree to the insertion of one adjective which would make an important difference. ‘Could you add “amended” in front of “programme”?’ I asked Jeroen.
He was pleasantly surprised by my suggestion. In fact I was making a huge concession by allowing the word “programme” to remain.
‘Would you be happy to commit to the completion of the amended programme?’ he replied.
I consulted briefly with Dragasakis and Chouliarakis. While the agreement would be opposed by many of our cabinet colleagues and MPs, who would rightly react angrily to any commitment to the programme, in the end it all hinged on the interpretation of the word ‘amended’. They agreed.
‘Yes, Jeroen, we are prepared to commit to an amended programme that is financially sound, fiscally sustainable, socially just and contains reforms that our people can embrace,’ I said.
‘We shall adjourn briefly,’ the Eurogroup president announced.
While waiting, I struck up a jovial conversation with my Spanish neighbour, Luis de Guindos. Despite my representing a government that constituted a deadly threat to his own, the chemistry between us was good. ‘You should have seen what I went through when I first landed this job and our banks were collapsing. It was terrible!’ he said, pointing in Wolfgang’s direction. It was not the beginning of a wonderful friendship between the two of us, although it would ultimately yield a fascinating exchange a few months later in his office in Madrid, but there were a few officials with whom it was easy to communicate without nastiness, pettiness or incomprehension getting in the way. We did not agree politically or ideologically but shared a common language and the desire to get to the bottom of whatever problem was staring at us. One day I realized what they all had in common: they were all Goldman Sachs alumni!
When the meeting reconvened, Jeroen looked downcast. Wolfgang could not accept the insertion of ‘amended’ in front of ‘programme’, he announced. Wolfgang switched his microphone on to explain that the insertion would oblige him to take the matter to the Bundestag for approval. The Greek programme as prescribed in the MoU had been voted in by the German parliament, he reminded us. Any amendment would need to be voted on too. But since the programme was due to expire in exactly seventeen days, there was no time to agree to detailed amendments, table them at the Bundestag and pass them. Thus, the Greek government had no alternative but to commit to the existing programme or accept that its banks should close on 28 February. The clash over Greece’s economic policy and reform agenda was turning into a tale of two parliaments. But while Wolfgang Schäuble invoked the German parliament in order to force the Greek parliament to relinquish its authority, I was not to grant him that concession. Judging by his body language, he knew it.
When Wolfgang had finished, Jeroen looked at me with open hostility. ‘Yanis, I hope you realize that you cannot afford to leave this room without an agreed communiqué. You are facing a hard deadline. Any extension of the programme needs at least two weeks to be passed through the four parliaments that must vote for it to satisfy constitutional imperatives.11 Our Finnish colleague tells me that their parliamentary calendar is extremely tight and they need to start the process of approving any application to give you an extension by tomorrow morning. If there is no agreed communiqué tonight, the Finnish parliament will not have the time to approve the extension and the ECB will be forced, on 28 February, to pull the plug. So there is no room left. Accept this communiqué now or the train will leave the station.’
Looking at him and Wolfgang, I replied, ‘It is a sad day for Europe’s democracy when, on his first visit to the Eurogroup, a freshly elected finance minister is being told that his arguments and proposals never really mattered, that his mandate is entirely irrelevant. For this is what you are telling me, Jeroen. You are telling me that, owing to technical constraints involving various parliamentary procedures and deadlines, even if I had tabled divine proposals that everyone in this room were ecstatic about, and which could save my people terrible indignity and hardship, the programme is the programme is the programme, and no deviation from it can be contemplated. It is my duty as a European democrat, my burden as the finance minister of a broken country, to say no to this ultimatum.’
Christine Lagarde intervened. She acknowledged the Greek government’s right ‘to be heard’ and made some polite noises about our debt but without challenging Wolfgang.
Thanks to her intervention a new adjective emerged as a possible substitute for ‘amended’ ‘Would you commit to an adjusted programme?’ I was asked.
Thinking on my feet, I decided to be flexible. It was a poor alternative – ‘adjustments’ implied the programme was fundamentally sound, whereas it was because the programme had failed and was impossible to complete that it needed real amendment – but we could accept this new adjective in return for a specific addition to the communiqué. In the spirit of cooperation with the Eurogroup, I said I could recommend to the Greek prime minister that we commit to completing an ‘adjusted programme’ as long as the communiqué also committed the Eurogroup to working with our government to address the humanitarian crisis that was now afflicting our people as a result of the programme.
‘I cannot accept this,’ Jeroen said. ‘The term “humanitarian crisis” is too political!’
‘There is nothing more political, Jeroen,’ I snapped back, ‘than the attempt to overlook a humanitarian crisis because it would be too political to acknowledge it.’
It was clear that we were at an impasse. At around 10.30 p.m. another adjournment was called. Outside Christine Lagarde approached me and attempted to persuade me to accept the word ‘adjusted’ and withdraw my demand that the humanitarian crisis in Greece be acknowledged in the communiqué.
‘Do you realize it is not just up to me?’ I said. ‘We have a parliamentary party that will be up in arms if I declare our mandate null and void at our first Eurogroup. I have a prime minister waiting nearby who would be appalled.’ I then expressed my disappointment that she and Poul Thomsen had not put to the Eurogroup what they had conceded in our private discussions. Christine replied that such matters should be left till later. For now, she insisted, it was important to endorse the communiqué and prevent us all from falling off the cliff. I told her I needed to consult with Alexis.
With Lagarde pushing me towards Wolfgang’s embrace and Commissioner Moscovici and Finance Minister Sapin keeping their distance, only one Frenchman was lending moral support, Emmanuel Macron, the French economy minister. Having no seat in the Eurogroup himself, he had called to wish me well just as I was stepping into the meeting. During the negotiations over the communiqué he sent me regular requests for updates. What was my feeling? How was the meeting going? I replied that I was prepared to bend over backwards to make a decent communiqué possible. ‘The first draft was appalling, let’s hope that they will not prove ridiculously stubborn,’ I texted him. At 10.43 Emmanuel responded, advising me to keep cool and seek a compromise but only if they moved in our direction. At 11.02 I texted back, ‘They are pushing us out of the door … They wanted to roll me into a communiqué that not even Samaras would have signed.’
It was time for another consultation with Dragasakis. I put it to him that we could either win ourselves some time by accepting ‘adjusted’, or we risked having our banks close down almost immediately, before we had had a chance to prepare the country for such a shock. Looking exhausted, he asked me for my opinion. I said that I was leaning towards compromise on the communiqué so that we had an opportunity to put all the plans we had agreed into operation while the banks were still open. He agreed and so did Chouliarakis. All this time Alexis and Pappas were holed up in their nearby hotel room, preparing for the EU summit about to take place. During the Eurogroup I had been keeping them up to date with text messages. Now it was time to talk directly to my prime minister.
We spoke for almost an hour, even though Jeroen approached to tell me that it was not normal for a minister to call their prime minister while in a Eurogroup meeting. I replied that it was not normal to force a minister to make an on-the-spot decision that could lead to the instant closure of his country’s banking system. It was an animated conversation, but with all the other ministers in the room talking in small groups, looking on, I had to keep a poker face.
When I read Alexis the draft that featured the phrase ‘adjusted programme’ he was quick to tell me that we could not get it past the cabinet, let alone pass it through parliament. I conveyed Jeroen’s threat, ‘the train will leave the station’. Alexis asked me what Draghi’s position was, given that the ECB would give that proverbial train the green light to do so. ‘Draghi has said nothing. He just looks unhappy,’ I said.
Over the course of our conversation, with my mobile phone growing hotter and my bile rising, 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. I confess that my will wavered and I needed Alexis’s steadiness at the end of the phone to bolster me. After ten hours of continuous, confrontational deliberations in an exceedingly hostile environment I suddenly developed an urgent need to get out of that fluorescent-lit windowless room. I had never imagined that I would crave Brussels’s cold, dark, empty streets in the middle of a February night, that I could feel such a desire to rush outside and soak up the rain and breathe in the air. But that is exactly how I felt. For a fleeting instant I understood how finance ministers before me had succumbed to the pressure to sign up to Bailoutistan. On a human level I sympathized with them. Once it was all over and I was back at my hotel, I phoned Danae to share the night’s burdens, including this thought: ‘If we did not have the millions of Greeks who had believed in us, who expected that in the Eurogroup I would refuse to sign up to the hated programme, I would most likely succumb too. How could Papakonstantinou, Venizelos, Stournaras resist such an irresistible pressure when all they had back home to shore them up was the oligarchs and the bankers?’
Alexis, on the other hand, at a distance from that cauldron of a room, was wavering a lot less, and in the end he was adamant. But with my resolve fully recovered and having received my instructions, I saw an unseemly game played out before my eyes: Schäuble and the Finnish minister were leaving the room. Almost immediately after they had gone, Jeroen approached me to explain: ‘Our Finnish colleague has had to rush to the airport to catch his plane. Wolfgang has left too. There can be no further amendment to the communiqué now that they have gone. Either you accept it as is or it is all over.’
Not to worry, I told Jeroen. It was perhaps best that Wolfgang had left, as we could not possibly sign the communiqué. He shouldn’t take it personally; we just did not have a mandate to do this. I was sure he would not have signed either if the Dutch parliament had denied him the mandate to do so, I said.
Somehow Jeroen managed to look even angrier.
I sat down again and explained what had happened to Dragasakis. He doubted the wisdom of Alexis’s decision, but I told him that, even though I had wavered, the prime minister was right. It had been important to have Alexis in contact but outside the room, in which the heat and the tension had blunted our judgement.
‘You just ran out of money!’
It was not clear what we were waiting for, but Jeroen and Thomas Wieser were now engaged in conversation, with Lagarde contributing occasionally and various functionaries providing assistance. Moscovici, on the other hand, had been excluded. He hovered around, occasionally sending a friendly smile towards me.
At one point Wolfgang came back into the room. ‘They are toying with us,’ I said to Chouliarakis. ‘The more they do this, the more adamant I am becoming that it would be a mistake to compromise.’
Eventually Christine approached me one more time to say, calmly, that she thought we had made a mistake. Then Jeroen tried his luck one more time: would I take this last opportunity to agree to the draft communiqué? he asked. Would he accept my original proposal to insert ‘amended’ before ‘programme’, an idea that he had liked before Wolfgang shot it down? I replied.
We had confirmed that the impasse was final. Ministers were beginning to move towards the doors. I waved to Dragasakis and Chouliarakis that it was time to leave. As we were going, one of Schäuble’s cheerleading team asked in a concerned voice, ‘Is it your plan to leave the euro?’
‘Not at all,’ I replied. ‘But this does not mean that we shall accept conditions that cannot be fulfilled under the threat of expulsion.’
Another minister from the former Soviet bloc opted for a more aggressive stance: ‘You just ran out of money,’ he said spitefully.
‘Well, that’s OK,’ I replied with a grin. ‘The Beatles taught me long ago that it can’t buy me love anyway.’
In the corridor I noticed that Dragasakis was walking unsteadily. I rushed up behind him, took his left arm and helped him to the bathroom. His face was white and covered with sweat, his eyes unfocused, his breathing irregular. I waited outside and was relieved when he emerged much steadier on his feet and with a surer smile. As we made our way towards the Greek delegation’s office I reflected that the human cost of the day’s charade was out of all proportion to what had been achieved. The finance ministers of nineteen 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.
Once in our office I briefly updated Alexis on the phone. ‘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. A German supporter of a completely different stripe came to mind: the secret service officer at Frankfurt airport.
The meeting might have ended but my work was far from done: hundreds of reporters were waiting in the press room. Jeroen was sure to use our refusal to agree to a communiqué as a means of accelerating our bank run by ensuring the news was broadcast around the globe. My task would be to perform with sufficient aplomb for the public and the markets not to despair at the misbehaviour of the ‘adults in the room’. That was why Alexis had been trying to raise my spirits.
On my way to the press room the security staff helped me run the gauntlet of cameramen who took no prisoners in their pursuit of the revealing close-up shot. Once inside the small, packed room, it was down to me to drive a large wedge between the way I felt and the way I appeared. My insides felt crushed by the stress, and I feared the tension would cause my voice to break or, worse still, produce a tear or two. But when the moment came, I found to my astonishment that within me there lived a stranger, one who was capable of rising to the task of facing a media circus, even of drawing strength from it. This encounter with the stranger within was truly a surprise.
This Eurogroup was never meant to settle any issues. I was invited because I am the new kid on the block, so to speak. 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.
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. Our mandate was to reject any oath of allegiance to the existing programme, to the previous governments’ MoU, to any new loans or austerity measures. Our purpose was to go to the wire without any intention of backing down. I had accepted the finance ministry on the understanding that we would respond to behind-the-scenes threats with our own deterrence plan. Our mission, in other words, was neither to declare war nor to surrender at the secret threat of war. Moreover, it was imperative to call Jeroen’s bluff – that the train would leave the station that very night – by waiting until the next morning.
A journalist asked me if it was true that the prime minister had called during the Eurogroup to back me and Dragasakis in our decision to scuttle a communiqué. I wanted to reply that both Dragasakis and I had been wavering in the direction of accepting and that I owed Alexis a debt of gratitude for supporting me during a moment of weakness, but of course I could not say anything of the sort. Instead, I said, ‘No one scuttled anything. This meeting was about getting to know each other and to create a road map for the future.’ Another journalist interjected to ask for my impression of my first Eurogroup experience. ‘It was fascinating!’ I replied. ‘I particularly enjoyed the very different views I sampled tonight.’
The media reporting of the impasse did not go entirely the troika’s way. The New York Times summed it up nicely: ‘With Greece about to run out of money and in need of German support for emergency funds, Mr Varoufakis appeared to be outmanned and outgunned. Nonetheless, he was the one who delivered the ultimatum in the meeting: renegotiate Greece’s €240 billion bailout deal or risk a mutually destructive disaster.’
It was 3 a.m. by the time the embassy car dropped me off at my hotel. The night was dark. Brussels looked bleak. The rain was falling hard on the hotel awning, making an almighty racket, a northerly wind driving it almost horizontal. But this was exactly what I had been dreaming of for hours. Instead of heading to my room, I walked out into the downpour, meandering through the empty streets. How the human mind forges vistas of pleasure out of pure bleakness is a fascinating mystery.
9 A moment to savour, darkly
Early next morning Pappas, Dragasakis and I met Alexis in his hotel suite. The European Council summit was beginning that night with all eyes on the Ukrainian crisis. Chancellor Merkel and President Hollande had been immersed in negotiations in Kiev and Moscow and would be arriving in Brussels exhausted, their minds full of the Crimea, Putin and war – pressing matters far removed from Greece’s travails.
We faced a risk but also an opportunity. From 2011 I had been advising Alexis that Angela Merkel was the key to any resolution of the Greek drama. Since I had become a minister, journalists had repeatedly asked me who Greece’s best allies were within the EU. My response was always a single word: Merkel. ‘Not President Hollande or Prime Minister Renzi?’ they would ask. ‘No,’ I would reply. ‘Chancellor Merkel is the only politician who can recalibrate Europe’s policies on Greece.’ And so I advised Alexis to approach Merkel that very evening with a direct request to end the stalemate in the Eurogroup, where Wolfgang Schäuble ruled supreme.
