Greek Finance Minister Yanis Varoufakis Resigns & Here's What's Next For Greece
Despite the outcome being what he wanted, Greece's finance minister Yanis Varoufakis resigned Monday following the nation's rejection of an austerity program that would help Greece pay back its debts to its European creditors. Considering Varoufakis was a strong supporter of the "no" campaign, this news is unexpected, but the finance minister seems proud of the referendum results. "I shall wear the creditors’ loathing with pride," Varoufakis wrote on his personal blog, on which he announced his resignation.
Greek citizens overwhelmingly voted on Sunday to decline the tough austerity program, which would have provided the economically crippled nation with new bailout terms from the International Monetary Fund, the European Commission and the European Central Bank. The final vote was 61.3 percent "no" to 38.7 percent "yes."
In his blog post, Varoufakis called the nationwide vote on July 5 a "unique moment" that displayed what happens when a tiny European country rises up "against debt-bondage." The former finance minister, who frequently and brashly clashed with members of the European Commission, continued:
Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. It is, therefore, essential that the great capital bestowed upon our government by the splendid NO vote be invested immediately into a YES to a proper resolution – to an agreement that involves debt restructuring, less austerity, redistribution in favour of the needy, and real reforms.
Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted "partners", for my… "absence" from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.
"I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum," Varoufakis added in his blog post. It's uncertain at this time who will step up to replace him.
The finance minister's abrupt resignation is just the first ramification from Greece's "no" vote, which members of the European Commission warned could force Greece out of the eurozone — countries that use the euro currency — and even push them out of the European Union. However, Greek Prime Minister Alexis Tsipras promised his people Sunday night in a televised statement that Greece's position in the European Union is not in danger. "I'm fully aware that the mandate that I was given (by voters) is not for a rupture with Europe, but a mandate boosting our negotiating strength for reaching a sustainable deal," Tsipras said.
Yet losing the euro currency is a very big — and plausible — ramification for Greece's rejection of the austerity program. Greece officials are meeting with officials from the European Central Bank on Monday to discuss its emergency liquidation funding for Greek banks, which were closed for the last week. According to The Wall Street Journal, Greece will be expected to pay back nearly 4 billion to the ECB by July 20. If the country doesn't, it would be pushed out of the euro currency — and most likely cause a new financial collapse.
Members of the eurozone are scheduled to meet on Tuesday, and Tsipras will likely try to renegotiate his nation's loans and forgiveness plans. But whether the Greek prime minister will actually be able to fairly negotiate with the already frustrated members of the eurozone remains to be seen.
European leaders who have poured billions of their nations' funds into Greece over the last seven years are also running out of patience. German Chancellor Angela Merkel, who gave Greece over 60 billion in funds, is holding an emergency meeting with French President Francois Hollande on Monday to discuss the "no" vote, The Guardian reported. A spokesperson for the chancellor told the news outlet that "the vote of the Greek citizens is to be respected," yet Hollande and Merkel are expected to discuss whether or not their two nations should continue their involvement in Greece.
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