‘Are you serious? Have you gone completely off your rocker? Why would they ever concede on debt restructuring if you offer them 3.5 per cent primary surpluses for ever? Your argument is like trying to fend off a shark by pouring blood into the sea. Think about it: in declaring your readiness to extract from the body of what’s left of the Greek economy 3.5 per cent of national income every year in the form of a surplus you’re implicitly declaring that you can pay the creditors 3.5 per cent of national income every year for ten years! How difficult is it to see that, in saying this, you are declaring that we don’t really need debt relief? That we would like it but that we don’t really need it?’
‘Chouliarakis believes that we can achieve the 3.5 per cent surplus target if we start growing again.’
This was the inane argument of the regime we had fought so hard to replace.
‘If this is so, Alexi, why did we strive to win government? For the glory? Did we not argue strongly against the Samaras government that our economy will never recover unless we end austerity, which means tearing up ridiculous surplus targets and replacing them with one of at most 1.5 per cent?’
Alexis looked troubled and tried to mollify me. ‘Nothing is final, Yani. Until there’s a comprehensive agreement no concession I have made is cast in stone – I can always take it back.’
‘What?’ I exploded. ‘Do you really think that you can take back the massive austerity you just gave them? You gave the shark a taste of your blood, its jaws grabbed your arm, and now you think you can pull it back because there is no deal until there is a final deal? Are you confusing us with the powerful side in this negotiation?’
By that stage my blood was boiling. In fact I was so enraged during most of this exchange that I almost forgot I had visited him to offer my resignation. When I did remember, towards the end, I decided not to make a hasty move in anger. I needed to leave, calm down and think things over before making a final decision.
When I returned to my office, I called my friend Wassily and told him what had happened. He breathed in deeply and emitted a sound expressing deep discontent before telling me to forget about resigning. ‘Remember the one hundred and forty thousand people who voted for you. They don’t want you to resign. They want to see you stay in the mix and give those bastards hell.’
Back at home, without knowing what Wassily had said to me, Danae made the same point. ‘Think of the one hundred and forty thousand people who put their trust in you,’ she said. I then spent a heart-wrenching hour on the phone explaining to Nicholas Theocarakis that the prime minister had ‘burned’ him in favour of Chouliarakis.
I faced a merciless dilemma. The Financial Times, as Nicholas informed me, was already reporting that I had been replaced as chief negotiator by Euclid even though in reality the negotiations were clearly being handled by George Chouliarakis. The war cabinet, meanwhile, had been turned, with a large majority now favouring wholesale capitulation and seeing me as the main impediment. Dignity demanded that I resign. But that night, once I had calmed down and thought things through, I realized that it was not just duty that obliged me to stay on.
Beneath Alexis’s political, economic and moral error in surrendering to austerity lay another, larger error: his belief that the troika would give him a speedy agreement and a third bailout in return. Undoubtedly, Merkel and Wieser had encouraged Alexis and Chouliarakis to believe this. But setting aside the fact that we had no mandate from our voters for such an agreement, there were two reasons why not even this was on the cards. First, the creditors would surely want to make an example of Alexis – who had spent years in opposition, and some months in government, lambasting them – as a deterrent to any other politician in Spain, Italy, Portugal or indeed France who might be tempted to confront them. For this they would need not just his capitulation but his very public humiliation too. Second, the troika had been denying for years that either a third bailout loan or significant debt relief were necessary. The only way they could explain a third bailout loan now was by claiming, as Poul Thomsen had done during the Riga Eurogroup, that the Greek debt had in fact been sustainable until Syriza won government, and to prove their charge it would be necessary to close down Greece’s banks, cause massive new losses and bankruptcies and then blame the costs on Alexis’s government.
Just before dawn I arrived at the conclusion that the more concessions Alexis made, the more they would ask for, that there would be no agreement until after the banks had been shut down and that then he would be forced into an agreement so degrading that the Eurogroup could hold it up to the cameras and say to all Europeans, ‘This is what you get if you cross us!’ This realization invited the question of how Alexis would react. He was only forty-two years old, I thought to myself. Surely he could not contemplate hiding for decades after acquiescing in such disgrace? When he finally saw what the troika and Angela Merkel were demanding – his ignominy and the crushing of our people – there must be a strong chance that he would refuse. And as long as there was a significant chance of that I had a duty to be there, ready to assist by putting forward our Plan for Greece and activating the payments system that would allow us to continue to function until Merkel made her mind up: side with Wolfgang Schäuble in kick-starting the eurozone’s disintegration beginning with Grexit, or accept our plan as the basis for an agreement.
So I decided to stay on. I would dedicate myself to keeping our deterrent alive for the moment Alexis might need it and to finishing our Plan for Greece together with Jeff Sachs and Nicholas Theocarakis – whom I also dissuaded that night from resigning – and aided by supporters including Norman Lamont, Larry Summers, Thomas Mayer as well as my immediate team. It was a hard, thankless path. I had known all along that the troika saw me as its primary obstacle, but now I knew that our own war cabinet felt the same. The single thread of hope that kept me going was that Alexis would, at the moment of his impending humiliation, come to me and finally say, ‘Let’s do it!’
Tapped
Friends chastise me for my forbearance. They think I was naive to maintain faith, despite all the evidence, that Alexis might bounce back. Hopefully, the following two episodes will help convey something of the pressure we laboured under and the scale of what we faced.
When I arrived home from Maximos that evening, Danae bombarded me with questions, videoing my replies with her phone. As she was doing so, my mobile rang. It was Jeff Sachs. Reluctant to convey my desperation over an unsecured line, I chose to share with him the only good news of the day: almost a month too late we were at last ready to default to the IMF. While Sagias, Dragasakis and Chouliarakis had objected, Alexis, Pappas and Euclid had sided with me on this. The coffers were bare. If the IMF wanted its money, it was time for the rest of the troika to release some liquidity. ‘The die has been cast,’ I told Jeff. ‘I think Alexis means it this time. The next payment to the IMF will not be made.’
Jeff was ecstatic. ‘It was about time,’ he remarked before offering advice on how to handle the fallout of a default.
Half an hour later my phone rang again. It was Jeff, laughing uncontrollably. ‘You will not believe this, Yanis,’ he said. ‘Five minutes after we hung up, I received a call from the [US] National Security Council. They asked me if I thought you meant what you’d said! I told them that you did mean it and that, if they want to avert a default to the IMF, they’d better knock some sense into the Europeans.’
I had fully expected my phone to be tapped, but two things made Jeff’s news remarkable. First, the eavesdroppers not only had the capacity to recognize that what I had said was of real significance but they must also have had an open line to the NSC. Second, they had no compunction whatsoever about revealing they were tapping my phone!
It was around three in the morning, but I called Alexis to inform him. Despite the collapse of our united front, despite our shattered bond, such moments reminded me that we were, ultimately, fighting a common enemy.
Danae’s feat
The other episode came the following evening, when I was in for a rare treat: dinner with Danae and a friend visiting from Australia at our favourite restaurant in Exarcheia.
Exarcheia is where I lived when I first met Danae. It was at my flat there that my daughter Xenia took her first steps; in fact, the inner-city suburb was where I had taken my first steps as a teenager in the 1970s. A neighbourhood on the wilder side of Athens, it is known for its off-beat record stores, bookshops, bars and, last but not least, for the powerful presence there of Greece’s multifarious anarchist groups. In short, Exarcheia was, and to some extent remains, my neighbourhood, even though I have not lived there since 2005.
Danae and our friend arrived first. I came straight from a meeting with Dragasakis and his team, parked my motorcycle outside the restaurant and joined them at a table in a corner of its lovely walled garden on Valtetsiou Street. It was almost May, and the jasmine bushes were spreading their hypnotic scent through the warm spring evening. After an emotionally draining day it was a much-needed tonic to sit in that garden, sipping wine and relaxing with close companions.
I heard them before I saw them. An hour or so later, as we were about to order dessert, three hooded men entered the garden shouting abuse. At first I did not realize that I was their target, but then they threw some bottles which smashed on the brick floor just in front of our table, shards of glass hitting my feet. Telling the other patrons to leave, the attackers approached our table, wielding broken beer bottles and continuing to shout abuse. I sprang up and walked towards them in order to screen my companions from the men but I had not factored in Danae’s determination and speed.
Danae jumped between the attackers and me, hugging me, her back towards them, her hands covering the top of my head. She literally turned herself into a human shield. I tried to push her away towards safety but her hold was so strong I realized that I would not be able to get her off without hurting her. Meanwhile, with the side of her head pressed firmly into my face to shield it, she yelled at them, ‘You’ll have to get through me first!’
The hooded men tried to get at me with the jagged bottles, but Danae’s embrace was too powerful and her body covered me so fully that they couldn’t without hitting her. Frustrated, they dropped the bottles and landed a few blows with their hands and fists on us both. As Danae received more of the blows than I did, they relented, no doubt reluctant to hit a woman, and left the way they had come, bellowing curses and threats. Stunned, we sat down at our table again, our Australian friend shaking.
However, the night was still young. Our attackers must have called for reinforcements, for within half an hour more than sixty of them were lined up outside the restaurant, which was now empty except for us, the patrons of one other table who seemed unperturbed, and the staff, who were concerned and apologetic. I insisted that they not call the police: were they to arrive in large numbers, there would most definitely be bloodshed. In fact, it was just as well perhaps that I did not have a police escort with me already.15
‘What will you do?’ asked our friend. The restaurant owner offered to put us up for the night in the restaurant.
‘I shall just walk out and engage them in dialogue. If they want to hit me, then they will hit me.’ Our friend thought I was crazy.
Danae said, ‘OK, let’s do it.’ We told our friend to stay put until the gang had left, and then the two of us, Danae and I, stepped out onto the pavement.
Sixty hooded youngsters shouting and swearing on a narrow Athenian street is a sight to behold. My heart was beating fast but I did not expect them to hit us again. Danae had impressed them, and I was sure they would appreciate the fact that we had neither called the cops nor hidden in the restaurant. I was also encouraged by the fact that they had not damaged my motorcycle, as they easily could have, but instead remained ten metres or so away. If they had been planning to attack us again, I thought, they would have been all over the bike.
So Danae and I walked straight towards my motorcycle, holding our helmets but not wearing them. The mob continued to shout abuse at us but did not make a move. After I had unlocked the bike, Danae sat on it and slowly began to put her helmet on, but I decided I was not going to be chased out of Exarcheia, my own neighbourhood. So I left my helmet on the bike and walked towards them. ‘I’m here. Tell me why you want to hit me. I’m all ears,’ I said.
The ringleader warned me off: ‘If you come closer you’ll regret it.’
‘I want to know what I’ve done to anger you. If this means I’ll be hit, so be it,’ I said, taking courage from the fact that they had still not attacked.
Thus an improbable, boisterous dialogue began. At first they were reluctant to explain their anger but simply continued swearing and threatening. Eventually, after a lot of prompting, they accused the police in Exarcheia of being in cahoots with heroin dealers. I told them that I would not be surprised if that were the case. ‘But why so much anger at me?’ I asked.
‘Don’t be stupid,’ one told me. It was not me, personally, they were angry with, but ‘state terror and its representatives. You are one of them. A minister. Fuck off out of here. Exarcheia is our liberated zone. Go anywhere else you like. Just not here. Leave us in peace.’
Fresh from my clash with Alexis and the war cabinet and all too aware that Greece and Europe’s deep establishment were trying to pulverize me, I decided to let them into a secret.
‘I see your point,’ I said. ‘I can accept that you hate me because I represent state power. But know this: the same establishment that you loathe, loathes me. I am a thorn in their backside and, believe me, they are about to discard me. To vomit me out. Just so that you know…’
Miraculously their anger dissipated. A pause ensued, after which their leader spoke for the first time in a calm, almost friendly, voice: ‘Enough now. Get on your motorcycle and go home.’
