The people of Greece probably surprised almost nobody when they rejected plans to exercise some financial restraint in exchange for further help from the rest of Europe. (Particularly Germany.) As I was saying on Twitter yesterday, the home of the world’s first true democracy has clearly stated that they will not be subjugated by the tyranny of math. Right up until the election, Greece’s Finance Minister had been saying that if the people voted in favor of the deal and “more austerity” then he was going to quit.
That’s why it seems to have come as quite the surprise when, after the big anti-austerity vote, he quit anyway.
Greek Finance Minister Yanis Varoufakis has resigned.
The move was unexpected, as Greek voters overwhelmingly rejected the latest bailout package from European creditors in a referendum on Sunday.
Varoufakis, who has been finance minister since January, had been rallying support for a “No” vote leading up to the referendum, and said that he would step down if the Greek people voted “Yes” to further austerity.
So why quit if you just got what you wanted? Our friends across the pond are speculating wildly at this point, but one guess is that the Prime Minister, Alexis Tsipras, may think he’s playing three dimensional chess here. Varoufakis himself said that removing himself from the playing field was something that Tsipras judged to be potentially helpful to him in reaching an agreement. One way to read those tea leaves is that the Prime Minister wants to paint Varoufakis as the bad guy here and the one who incited the population against the new loan deal. Then he can go back to the Eurozone and plead for a different deal with less “austerity” where they still get more money, essentially saying that his hands were tied because the people refused to go along with the plan, but at least he’d gotten rid of the troublemaker. Of course, I’m not sure how he thinks that works out for him unless none of the rest of Europe’s leaders have access to the internet or a television, since Tsipras himself was basically raving against the plan as a deal with the devil.
Thus far Germany is sounding like that was the end of the road, with their Deputy Chancellor saying that further deal negotiations with the Greeks would be difficult to imagine. So what does Greece do now? Option one is to remain with the Euro, assuming the big kids in the class even allow them to. But they’re still going to be in the same situation they face now because they basically don’t have any Euros. With the banks run dry (if they are even open) you’re going to be seeing bread and soup lines and more riots in the streets. Option two is to exit the Europe deal entirely and go back to the drachma, but then they’ll need to essentially wipe out all the remaining forests around the Mediterranean just to print enough of them to buy a loaf of bread by the end of the month. Neither plan looks terribly appealing.
And to think, problems developed in a nation where the average worker was spending roughly a quarter of the year on vacation and retiring at what most of us would still consider “middle aged” on a full pension. Paying taxes in that country is apparently looked upon as something of an amusing novelty, so even if there was enough GDP to cover their bottom line they weren’t collecting the money anyway. This is the point in any snarky coverage of a story such as this where we ask, what could possibly go wrong? Well, now we’ve seen what can go wrong and that country may very well collapse. On the plus side, with so many other countries imploding around the world, at least this one wasn’t taken down (entirely) by terrorism.