Greek Finance Minister Resigns

In the wake of the voting yesterday, Greek Finance Minister Yanis Varoufakis realized that he would not be able to stay on as finance minister. He explains it as such on his blog, saying:

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.

Kostas Koutsaftikis / Shutterstock.com

Kostas Koutsaftikis / Shutterstock.com

This could be an indication that the Eurozone lenders believe that Varoufakis himself is a barrier to conducive negotiations, but it could also be the age-old martyrdom that some member of any administration under duress goes through. Varoufakis has yet to announce what he plans to do now that he has resigned as the Greek Minister of Finance, but this level of candor is indicative that he will not be continuing in career politics.

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However, he does not specifically state that he is leaving the government, only that he is leaving the Ministry of Finance. This could indicate that he is moving on to another position in the government, as throughout the post he continues to express his support for the Greek Prime Minister.

Blessing in Disguise?

It is likely a blessing to Varoufakis to be relieved of this position as the country now returns to the negotiating table with lenders in an attempt to improve conditions of the bailout process.

The government believes that by having a mandate from the people to reach terms which center on “debt restructuring, less austerity, redistribution in favour of the needy, and real reforms” they will have greater bargaining power. It remains to be seen if the weekend referendum will have any effect whatsoever in the minds of lenders in the Eurogroup. However, it could be seen as a measure of good faith that Varoufakis will be replaced.

Images from Shutterstock.