FinMin Varoufakis: Europe has shown that it knows how to find solutions and avoid ultimatums

Greece’s new Finance Minister Yanis Varoufakis on Wednesday appeared confident that Greece will succeed in reaching an agreement with its creditors, while addressing reporters at the ministry handover ceremony with former minister Gikas Hardouvelis.

“Europe has shown that it knows how to find solutions and avoid ultimatums,” the new minister said. Varoufakis noted that, prior to the elections, he had predicted that the climate of fear would give way to reason and negotiations after the elections were over, adding that “this is happening now”.

The new minister said that the ministry’s leadership will have a series of meetings with Greece’s EU partners in order to arrive at an agreement “bridging” the old adjustment programme and a new final agreement. He said that this would put an end to the introversion, promote reforms and put an end to the “self-reinforcing crisis”.

Varoufakis said the government had undertaken to make not one but three major breaks with the past at the finance ministry:
“The first concerns tackling the self-reinforcing crisis,” he said, calling the bailout agreed in 2010 a “major, toxic mistake” in that it treated a problem of default and as a problem of liquidity shortage. This led to Greece receiving the biggest loan in history on condition, among others, that incomes were reduced. According to Varoufakis, “this affair could not end well,” and ultimately had a cost in lives lost and undermined. Today marked the start of resolving this problem and a “new page,” he said.

“The second concerns austerity,” Varoufakis said, noting that he was in favour of living simply but not of “Ponzi austerity”.
“Growth does not mean how having so many Porsches and Cayennes in the narrow roads of Athens, rubbish on the beach and destruction of the environment,” he noted. “Greeks were creative when they lived simply, without credit cards and loans, and used their savings to educate their children,” he said.

He said change in this direction will begin at the ministry itself, where one of the first moves will aim to save funds by reducing spending on advisors, associates and others, which will allow the ministry to rehire laid-off cleaning staff.
The third change, Varoufakis said, was to make use of the ministry’s existing personnel: “We will not bring a party army or any other army,” he emphasised.

Reporting on a conversation he had on the phone with Eurogroup President Jeroen Dijsselbloem, who is due in Athens on Friday, Varoufakis said there had been agreement on many points and a “common ground”. There was also a joint commitment to dismantle the narrative of a supposed “duel” between Europe and the Greek government over who would back down first, he added, noting that the crisis that erupted in 2010 in Europe had so far had only victims and losers.

“On Friday, the foundation will be laid for dismantling this climate,” he said.

The minister also reported talking to his French counterpart Michel Sapin on Tuesday night, with a meeting scheduled early next week, and that the discussion focused on an investment shortage in Europe and proposals on a European ‘New Deal’. On Wednesday he held talks with his Italian counterpart and again arranged a meeting soon.

Varoufakis stressed that the negotations with Greece’s partners will not be easy – noting that they had never been easy – but he appeared confident that things were moving in the right direction and that Greece’s partners recognised the new government’s right to a “new chance and a reboot”.

“The state has continuity. What will not have continuity is the self-reinforcing crisis of recent years,” he said.
Hardouvelis, on his part, noted that political uncertainty had now ended and that this was an advantage for the new government. He noted that the economy faced real restrictions, due to the country’s financing needs, adding that the fall in revenues as a result of the elections brought the financing needs closer than March.

He said that he also wanted an additional extension to be given to the new government and wished it every success, adding that “this is what all the world wants”.