When I got back to my room, I took the resignation letter I had been planning to submit to Alexis that day, tore it up and put the pieces in the bin. Now we had a referendum to fight. If necessary, I would draft another letter in a little over a week’s time. I then set about preparing my speech for the following day’s Eurogroup meeting and drafting an official letter requesting a one-month extension of our loan agreement to allow the referendum to take place.
After several hours, I looked out of the window and realized it had got dark. I decided to step outside for some fresh air and something to eat. In the hotel lobby I bumped into Glenn Kim, slightly surprised that he was still in Brussels. Always happy to see Glenn, I invited him to join me. Immediately I sensed reluctance. ‘I have a meeting to attend,’ he said.
‘Really?’ I replied. ‘Who with?’
‘With Chouliarakis, Wieser and Costello.’
Over the past weeks, despite initial resistance from some within Syriza to Glenn’s involvement in my team, Sagias had recognized his skills and enlisted his help in drafting their concessions to the troika. Embarrassing as Glenn’s reply was for both of us, it was the presence of Wieser and Costello at this meeting that really disturbed me. I bade him goodnight, said nothing else and walked out into the street.
I then called Chouliarakis and calmly asked him what the meeting was about and whether I had failed to make myself clear earlier that day.
‘It’s no big deal,’ he said. ‘We’re just meeting to exchange ideas.’
Without another word, I hung up and dialled Alexis’s number. His secretary answered and told me that he was about to start the cabinet meeting. ‘It is imperative that I speak to him,’ I persisted. When Alexis came to the phone, I told him how Chouliarakis was disregarding his explicit instruction to avoid any contact with the troika.
For the first time ever, Alexis raised his voice at me. ‘I’ve had enough of your animosity towards Chouliarakis,’ he said. ‘If you continue I shall have to put the phone down on you.’
Fed up and exasperated, I said, ‘Go ahead! Put the phone down on me, Alexi!’
He did. Two minutes later he called me back to apologize, blaming his outburst on stress. ‘As for Chouliarakis, it doesn’t matter any more,’ he added. ‘Soon I shall be announcing the referendum.’
Over my solitary dinner I thought things over. However much I wanted to escape this cesspit, I had two jobs to do: first, see through the next day’s Eurogroup and, second, return to Athens to ensure that the no campaign got the best possible support in the referendum. Alexis was issuing a call to arms. For the first time the Greek people would be given the opportunity to express their will. This was no time for introversion or squabbling.
On the morning of Saturday, 27 June, just before the Eurogroup, Euclid and I met Dijsselbloem, Wieser and Michel Sapin. Unsettled by the announcement of the referendum, they pushed me to have it cancelled. I explained the rationale that lay behind the decision: we did not feel we had a mandate from the people of Greece either to clash with our European partners or to sign an agreement that made no sense, not just to us but to the German finance minister, to another five finance ministers and indeed to the staff of the IMF. Jeroen then took me to task for the recommendation we were making to the Greek people when they came to cast their votes.
DIJSSELBLOEM: You recommend they say no.
VAROUFAKIS: The sovereign power is the electorate. It is not the government, not the minister. We get our marching orders from the electorate.
DIJSSELBLOEM: Political parties campaign …
VAROUFAKIS: Of course. And that is not the subject of this discussion. What we are going to campaign for is our business. What you need to know—
DIJSSELBLOEM: But it shows your intentions.
VAROUFAKIS: Your view of our intentions as politicians, Jeroen, is neither here nor there. Just like my views about your intentions as a politician are neither here nor there. It is between yourself and your electorate.
At that point Sapin objected that we would be asking the Greeks to vote against the tough parts of the deal, such as austerity, without acknowledging its advantages. I asked what advantages he was referring to. ‘The debt measures, investment help and so on,’ Sapin replied. Euclid pointed out that these had never been on the table, as our creditors had refused doggedly to put them there, and Jeroen stepped in again.
DIJSSELBLOEM: Let us look at political feasibility. Build trust, and then even the toughest ministers after the summer will be prepared to discuss this. If they have gained some confidence that the programme will be back on track.
VAROUFAKIS: I accept that. I understand that. But do you understand that confidence is a two-way process? That the Greek population does not have confidence in the Eurogroup to deliver this? The Eurogroup does not have confidence in Greek governments, but trust has broken down on both sides of the equation, Jeroen. You need something binding on the table and so do we.
The ensuing conversation did not get us much further, so I suggested we leave it for the time being and resume our discussions in the Eurogroup a few minutes later, with everyone present.
The Eurogroup does not exist!
The Eurogroup Meeting of Saturday, 27 June 2015 will not go down as a proud moment in European history. Our request that the Greek people be granted a brief window in which to decide whether to accept or reject the institutions’ proposals was denied. As the extension of the loan agreement, which I had secured on 20 February, expired on 30 June, the rejection of our request for another extension meant that the ECB would be within its rights to refuse the Greek banks more liquidity via the Central Bank of Greece’s ELA facility. In other words, the Greek banks would not reopen on Monday.
Interestingly, the idea that a government should consult its people on a problematic proposal put to it by the institutions met with incomprehension and was treated with a disdain that bordered on contempt. How could we expect normal people to understand such complex issues? I was asked by Italy’s Pier Carlo Padoan.
‘We are strong believers in the capacity of the people, of voters, to be active citizens,’ I replied. ‘And to make a considered analysis and take decisions responsibly concerning the future of their country. This is what democracy is all about.’
The fact that I had to make this point and the negative reaction to it from almost everyone in the room reflected badly on European democracy and its institutions.
After our request had been rejected, the Eurogroup president broke with EU tradition to make two extraordinary announcements. The first was that he would issue a communiqué without Greece’s consent, violating the Eurogroup (and EU) convention that unanimity was required. The second was that, later that day, he would reconvene the Eurogroup without inviting Greece’s representative in order to discuss the ‘next steps’.
At that point I asked the secretariat, which sat at a table behind Dijsselbloem and Wieser, ‘Is the Eurogroup president at liberty to issue communiqués when there is no unanimity and also to exclude finance ministers at will from Eurogroup meetings?’ There was a short adjournment while some of them made phone calls and others consulted thick volumes.
After a while, Jeroen called us back to order and a member of the secretariat addressed me: ‘Minister, the Eurogroup does not exist in law, as it is not part of any of the EU treaties. It is an informal group of the finance ministers of the eurozone member states. Thus there are no written rules about the way it conducts its business, and therefore its president is not legally bound.’
On my way out, as I was waiting for the lift I bumped into a worried-looking and unexpectedly friendly Mario Draghi. ‘What on earth is Jeroen doing?’ he said.
‘Damaging Europe, Mario. Damaging Europe,’ I replied.
He nodded, looking even more concerned. We took the lift down and then parted silently.
17 Lions led by donkeys
Back in Maximos that night, the war cabinet convened. As soon as Euclid and I entered the room, I reminded them of the agreement which they had repeatedly sworn to uphold: if the ECB were to close down our banks, we would respond by haircutting the SMP bonds owned by the ECB, activating the euro-denominated parallel payments system and announcing our intention to return the Central Bank of Greece to the full control of the Greek parliament. I told Alexis that the moment had now come; on Monday the banks would be closed. Would we now implement the countermeasures that we always said we would?
‘We don’t have to rush into them,’ I said. ‘Just signal them today. My proposal is that we announce today that we shall defer Draghi’s SMP July and August repayments by a couple of years. Also, we can announce the activation of the parallel payments system for the week after the referendum. And the change in the law regarding our central bank for next month. That way we signal that we are not rolling over but also that we want to leave them an opening to come back to us with a decent proposal soon.’
Dragasakis spoke against my proposal with uncharacteristic energy and speed. He dismissed it as dangerous bluster, using a Greek word that denotes a lion’s roar. ‘I veto this,’ he said ‘I propose that we do not antagonize Draghi but proceed consensually with him.’
No one else spoke. Everyone was looking at Alexis. He walked over to the bay window; he was smoking a cigar – a relatively recent habit. After a few moments he turned towards me, took another moment and said, ‘We will go with Dragasakis, Yani.’
