Dragasakis and Chouliarakis were nodding approvingly as I wrapped up. Luis de Guindos, the Spaniard on my right, looked concerned.9 As soon as I had finished, Michel Sapin, the French finance minister, stood his nameplate on its side, the standard way of asking for the floor. Jeroen obliged him.
Shortly after announcing my willingness to accept 70 per cent of the MoU measures in the context of a new partnership, I had received a message from Paris that this gesture appealed to the French government greatly. Michel now proceeded to wax lyrical about my suggestion that a bridge be built between the Greek programme and our new government’s plans, paving the way for a new type of contract between Greece and the Eurogroup. But before Michel concluded, Wolfgang placed his own nameplate in an ominously vertical position. Later I would realize that this was probably the first and last time Michel Sapin dared express unequivocal support in the Eurogroup for anything I said. The chain of command within the Franco-German axis was about to be established, even within the first hour of my first Eurogroup.
As he spoke, Schäuble directed a piercing look at Sapin. ‘Elections cannot be allowed to change economic policy,’ he began. Greece had obligations that could not be reconsidered until the Greek programme had been completed, as per the agreements between my predecessors and the troika. The fact that the Greek programme could not be completed was apparently of no concern to him.
What startled me more than Wolfgang Schäuble’s belief that elections are irrelevant was his total lack of compunction in admitting to this view. His reasoning was simple: if every time one of the nineteen member states changed government the Eurogroup was forced to go back to the drawing board, then its overall economic policies would be derailed. Of course he had a point: democracy had indeed died the moment the Eurogroup acquired the authority to dictate economic policy to member states without anything resembling federal democratic sovereignty.
After Dr Schäuble’s speech several of his cheerleaders took to the floor to back him – as also did the Spanish, Irish, even the Belgian and the Austrian ministers, whose premiers had shown support for our government in private meetings.10 While some, including the Lithuanian, Slovakian and Slovenian finance ministers, clearly believed Schäuble’s pronouncements on economic policy to be sound and self-evident, it became apparent that even those who disagreed with the economics of austerity would support him – in the case of Italy, Spain and Ireland out of fear that upstart Greece might escape having to do what they had been forced to do already, in which case their own people might demand to know why they had not resisted austerity too – and in the case of a small but significant group, with France at its centre, out of fear that Schäuble would force austerity upon them in the future if they undermined him.
When my turn came to reply, I tried to make light of Wolfgang’s Platonic contempt for democracy.
The notion that elections cannot be allowed to change economic policy, indeed any policy, is a gift to [founder and leader of Singapore] Lee Kuan Yew supporters or indeed the Chinese communist party, who also believe this to be true. There is of course a long tradition of doubting the efficacy of the democratic process. But I would like to think that this tradition has been expelled long ago from the heart of democratic Europe. It now seems that the euro crisis has brought it back. I urge you all to band together in a collective bid to resist it. Democracy is not a luxury to be afforded to the creditors and denied to the debtors. Indeed, it is the lack of due democratic process in the heart of our monetary union that is perpetuating the euro crisis. Then again, I might be wrong. Colleagues, if you think that I am wrong, 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. What is the point of spending money on elections and asking our people to get all fired up to elect governments that will have no capacity to change anything?
Dragasakis leaned over and congratulated me. Whatever our differences, he had enjoyed hearing me make that point. But as no one else had anything to say on the matter, Dijsselbloem announced, ‘We shall now adjourn for ten minutes and then resume to draft the communiqué.’ The time was 6 p.m., one and a half hours since the meeting began, but our work was just beginning: the communiqué was clearly all that really mattered.
Communiqué sans communication
Previously I had asked the secretariat to circulate my three non-papers so that all the Eurogroup ministers would be able to consider my proposals on paper and in some detail. The secretariat now alerted me to a difficulty, and Jeroen Dijsselbloem and Thomas Wieser approached me to explain that it was ‘not possible’. Incredulous, I asked, ‘Are you telling me that you will prevent me from communicating to my colleagues a few pages with the gist of our proposals on key issues concerning the Greek programme that is today’s sole topic of conversation?’ Yes, this was precisely what they were telling me. But why? What was the reason? Could there be any rationale for such a refusal?
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!’
