‘And what about Wolfgang?’
‘No, Wolfgang was not part of it. He will not like it. But once he sees everyone else agrees, he will relent.’
‘I’m finding it hard to picture Jeroen agreeing with this communiqué in opposition to a disaffected Wolfgang – especially after our last Eurogroup.’
‘Just leave it to me. All I want from you is to leave it to me and to the others to push it through. Speak as little as possible so as not to antagonize Wolfgang.’
‘I’m more than happy to stay silent, Pierre.
‘No, no, do speak, but say that you support the draft communiqué and leave it at that.’
A long silence followed. We had fifteen minutes until the Eurogroup began. I continued to drink my coffee in a state of relief. An easy Eurogroup; who could have imagined it? I thought. Eventually my incredulity overcame me. It seemed too good to be true, I told Pierre. I just could not picture Jeroen reading out and supporting this draft under Wolfgang’s piercing gaze. Pierre smiled confidently, took the draft communiqué in his hands, stood up and said he would prove it to me. We would go and talk to Jeroen right away. And so we did, Pierre leading the way down the corridor to Jeroen’s office. We had ten minutes until the Eurogroup was scheduled to commence.
Pierre knocked on Jeroen’s door and entered without waiting. The Eurogroup president’s office was twice the size of the commissioner’s and filled with aides, some sitting on a couch, others on chairs, one of them on the floor, working busily on laptops, talking to one another, all preoccupied with last-minute preparations. A powerful smell of bodies and the steamed-up windows suggested they had been labouring for a while and with some intensity. As we entered, Jeroen was standing by a long conference table in the midst of his toiling aides, reading a sheet of A4. The moment the aides saw us, they picked up their gear and papers and left the room. The thick atmosphere and the speed of their retreat heightened my premonition that all was not well.
Jeroen nodded to us to come in and sit down. He sat at the head of the table, his back to the window. Pierre sat two chairs along to Jeroen’s right with his draft communiqué in his right hand. I positioned myself two chairs to Pierre’s right, facing Jeroen with Pierre’s profile between us. Jeroen took the A4 sheet he had been reading and slid it towards me across the table. ‘Read this and tell me what you think,’ he said.
I read it. It was worse even than the draft 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.
I told Jeroen what I thought: that the last Eurogroup had come to an impasse because he had insisted on a communiqué that was, if anything, a touch more fathomable than this one. Turning to Pierre, who was already looking downcast, I asked what was going on. ‘You just showed me a draft communiqué that I was happy to sign on the spot. You are the EU’s commissioner for economic affairs. I am the finance minister of a stricken EU member state. Can I please have some clarity from the only person in this room that has official status to represent the EU?’10
Without looking at me, Pierre turned to Jeroen and made his first and last attempt to salvage the European Commission’s dignity. ‘Can we combine some of the phrases in your draft and this?’ he implored in a broken voice, pointing at the draft he was holding in his right hand.
‘No!’ Jeroen cut him down with what could only be described as controlled aggression. ‘Everything that could be taken from that draft has been taken,’ he stated categorically.
I turned to Pierre. Something important was at stake at that moment, I told him, something that went beyond Greece’s plight or that day’s Eurogroup meeting: it was the principle of compromise and of mutual respect and of the European Commission’s authority to safeguard them. ‘Pierre,’ I asked, ‘are you just going to submit to the enforcement of this totally one-sided communiqué against the commission’s views and the draft that you prepared?’
Avoiding eye contact and in a voice that quavered with dejection, Pierre responded with a phrase that might one day feature on the European Union’s tombstone: ‘Whatever the Eurogroup president says.’
More relaxed now, Jeroen proposed that I cross out words or phrases I ‘did not like’ and replace them with alternatives. So I took out my pen and did exactly that. In the opening line of Jeroen’s communiqué, after ‘the remarkable adjustment efforts undertaken by Greece and the Greek people of the last years’ I added, ‘which unfortunately failed to deliver recovery due to the existing programme’s design faults’. Further down, I crossed out the commitment ‘to complete the current programme’ and replaced it with a commitment ‘to work with Greece’s European and international partners towards the design and implementation of a reform and recovery programme that the Greek people can embrace and own’. Once I was done, I slid the draft back to Jeroen.
The Eurogroup president lost his temper. Raising his voice, he accused me of time-wasting and of threatening to torpedo a second Eurogroup – accusations that were being tweeted and reported only minutes later by respected journalists, such is the efficiency of Brussels’s propaganda machine.
I replied carefully but with increasing firmness, ‘Jeroen, you are in no position to raise your voice at me. In the last Eurogroup you violated your obligation as Eurogroup president to offer guidance to a new finance minister. Instead, you misled me intentionally by repeatedly issuing a threat that the very next morning proved to be empty. I strongly advise you to refrain from raising your voice at me ever again. If not you will leave me with no option but to make your scandalous behaviour public.’
Jeroen immediately backed down. In times of tension he sometimes got overly animated, he admitted.
‘Not to worry, it happens to all of us.’
With the animosity dissipating, Jeroen looked at his watch, which revealed that we were late for the Eurogroup meeting. ‘Let’s not delay further,’ he said, as every minute that went by with the three of us absent from the floor would encourage unhelpful rumours. As we rose to leave, he suggested that as the meeting obviously could not produce an agreement we should keep it short in order to contain the damage. It occurred to me that damage of some kind was surely his intended outcome, but I held my tongue.
From the moment Jeroen shot down his suggestion of a compromise until the three of us walked into the Eurogroup, Pierre had remained silent. During the Eurogroup meeting, whenever I looked at him I imagined the horror Jacques Delors or any of the EU’s founding fathers would have felt had they observed the scene in Jeroen’s office. Listening to him express views in the meeting that were subservient to Schäuble and Dijsselbloem, views that I knew perfectly well he did not agree with, I was hearing the sound of the EU’s descent into ignominy. His humiliation was emblematic to me of the complete subjugation of the European Commission to forces lacking legal standing or democratic legitimacy. In the months that followed, Pierre Moscovici and I remained on friendly terms and agreed on all matters of substance, but our agreement was as irrelevant as the draft communiqué he was still holding in his hand when we left Jeroen’s office. Indeed, from that day onwards, every time he or Jean-Claude Juncker tried to help our side, I felt a sense of dread, for I knew that those with real power would strike us down pitilessly in order to teach Moscovici and Juncker a lesson and beat the European Commission back into its pen.
A few weeks later Pierre began to spread the story that at that meeting in Dijsselbloem’s office on 16 February 2015 Jeroen and I had nearly come to blows and that he had had to step in to separate us. Later, in his memoirs, he claimed that it had been impossible to negotiate with me and welcomed my disappearance from the Eurogroup. I can only assume that these were attempts to deal with his own disgrace.
A crucial non-event
Those fifteen minutes in Jeroen’s office felt much longer – and certainly more momentous – than the hours spent in the subsequent Eurogroup meeting, which began with a report from the institutions on the discussions between our two technical teams. Having made some polite noises about my team’s presentation, the troika’s representatives expressed their ‘concerns’ that our government’s plans were not inspiring them with confidence that we could ‘successfully complete the current programme’. Had they been trying to sound like a stuck record, they could not have done better.
So, once again, I did what I had to do.
Our reluctance to accept the phrase ‘extend the current programme and successfully complete it’ stems from the determination of this government never to issue a promise that it cannot keep … I could, for instance, placate everyone by accepting for example the €5 billion privatization target, so as to reach agreement. But I know that I cannot deliver. Just like previous governments could not deliver in a marketplace of collapsing asset prices … Our task is to carry out the deep reforms that my country needs and to maximize the net present value of our debt repayments to you. But if I accept the priorities, the matrix, of the current programme, I know that I shall be giving the debt-deflationary spiral another boost, I shall lose our people’s support and, as a result, the country will become un-reformable … As the recently appointed finance minister of a country that has a credibility deficit in this room, I trust that you will understand my reluctance to promise that which I do not believe I can deliver.
As I was speaking I was thinking of the people of Greece, of Europeans everywhere, as well as of the infamous markets. How would they all respond to the news that a second Eurogroup had concluded with an impasse? How would they interpret it? I decided that the best path was one of truth and straight talking. In my press conference address I felt relaxed as I told the world as politely as possible what had really happened behind closed doors.
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 new 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 an 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. Remember, a debt-deflationary spiral does not lend itself to successful reforms of the form that Greece needs in order to stop being dependent on loans from its partners and from the institutions.
Last Wednesday, in the previous Eurogroup meeting, we turned down a pressing demand to subscribe to ‘extending and successfully concluding the current programme’. As a result of that impasse, on the following afternoon (last Thursday, and prior to the summit) President Jeroen Dijsselbloem and Prime Minister Alexis Tsipras agreed on a joint communiqué to the effect that the two sides would explore common ground between the current programme and the plans of the new government for a new contract with Europe. This was a genuine breakthrough.
This afternoon there was another breakthrough. Prior to the Eurogroup meeting I met with Mr Moscovici, whom I want to thank for his highly positive role in this process, who presented me with a draft communiqué that I was happy to sign there and then, as it recognized the humanitarian crisis and spoke of an extension of the current loan agreement, which could take the form of a four-month intermediate programme as a transitional stage to a new contract for growth for Greece that will be deliberated and concluded during this period. It also stated that the commission would provide technical assistance to Greece to strengthen and accelerate the implementation of reforms. On the basis of that understanding between us and the commission, we were more than happy to apply for the loan agreement to be extended … Our only condition for the other side was that we should not be asked to commit to measures that are recessionary during the extension, such as pension cuts or VAT hikes.
Unfortunately, minutes before the Eurogroup meeting that splendid document was replaced by the Eurogroup president with another document that took us back not even to last Thursday, but indeed to last Wednesday, when we were pressurized to sign up to an extension not of the loan agreement but with the programme itself … Under those circumstances it proved impossible for the Greek government, despite our infinite goodwill, to sign the offered communiqué. And so the discussions continue.
We are ready and willing to do whatever it takes to reach an honourable agreement over the next two days. Our government will accept all the conditions that it can deliver upon and which do not reinforce our society’s crisis. No one has the right to work towards an impasse, especially one that is mutually detrimental to the people of Europe.
This was the second time we had said no to the troika within five days. With twelve days left before the imposition of an indefinite and undesirable bank holiday, we had shown that we would not blink for the simple reason that we were not bluffing.
The war cabinet
In spite of all the evidence to the contrary, there is one abiding reason to remain confident that Europe is capable of creating good institutions: the European Investment Bank (EIB). The EIB is owned by all EU member states, whose finance ministers are its governors. The morning after my second Eurogroup meeting I had the privilege of participating in the EIB board of governors’ meeting. In my inaugural presentation I expressed my enthusiasm about the EIB’s potential and said a few words on how an EIB–ECB alliance might wrench Europe out of its deflationary spiral without any need for politically difficult treaty changes.11
Werner Hoyer, the German president of the EIB, expressed his strong interest in developing the idea, but my old mate George Osborne remained silent, preoccupied perhaps by the wave of Europhobia back home, as did Jeroen Dijsselbloem, who must also have had more important things than Europe’s deflationary forces on his mind. It was time to return to Athens.
Arriving home, I was at last delivered from a state of loneliness that no amount of adrenalin can compensate for. Danae had returned from Austin, having completed our move in spite of the prize-worthy bureaucratic incompetence not just of Greece but of the United States. During the frenzied three days that followed the fact that we were still unable to spend any proper time together mattered little. It was enough to know she was near.
At Maximos, however, Alexis, Pappas and Dimitris Tzanakopoulos, Alexis’s chief of Staff, were subject to fits of rage.12 ‘What did you expect of the troika?’ I would ask. ‘A quick capitulation?’
