EUROZONE-GREECE/SPD REACTIONS Varoufakis bit off more than he can chew, German parliamentarian says

Record ID: 148104

  • Title: EUROZONE-GREECE/SPD REACTIONS Varoufakis bit off more than he can chew, German parliamentarian says
  • Date: 8th July 2015
  • Summary: BERLIN, GERMANY (JULY 6, 2015) (REUTERS) SOCIAL DEMOCRATIC PARTY (SPD) HEADQUARTERS IN BERLIN CLOSE UP OF SPD FLAG WAVING ON TOP OF BUILDING SPD, GERMAN AND EUROPEAN FLAG WAVING AT ENTRANCE TO BUILDING DEPUTY HEAD OF THE SPD (SOCIAL DEMOCRATIC PARTY) PARLIAMENTARY FACTION, CARSTEN SCHNEIDER, ARRIVING TO HEADQUARTERS CAMERAMAN (SOUNDBITE) (German) DEPUTY HEAD OF THE SPD (SO
  • Embargoed: 23rd July 2015 13:00
  • Keywords:
  • Location: Germany
  • Country: Germany
  • Topics: General
  • Reuters ID: LVAC8SM8MD700DWOOTOKV8PIHOBA
  • Aspect Ratio: 16:9
  • Story Text: Members of the German Social Democratic Party welcomed on Monday (July 6) the resignation of Greek Finance minister Yanis Varoufakis as inevitable but remained cautious regarding Syriza's next moves.
    Varoufakis' resignation clears a major obstacle to any deal to keep Athens in the eurozone as his unconventional style had infuriated eurozone partners.
    The move followed an overwhelming "no" in a referendum on Sunday (July 5) in which Greeks rejected the conditions of a rescue package from creditors, throwing the future of the country's eurozone membership into further doubt and deepening a standoff with lenders.
    Varoufakis had campaigned for Sunday's sweeping 'No' vote, accusing Greece' creditors of "terrorism", and his sacrifice suggested leftist Prime Minister Alexis Tsipras is determined to try to reach a last-ditch compromise with European leaders.
    Deputy head of the SPD parliamentary faction, Carsten Schneider, said the Greek economist had "bit off more than he could chew".
    "He made promises that couldn't be kept. He gave the people assurances which didn't exist, which weren't his to decide. And now he has to face the consequences. Before he has to admit everything and it becomes apparent, he resigns. But that doesn't change the negotiating position of Greece, and I am very interested to know what the Greek government will do or suggest in the next few days. It is up to Greece to act now and not the other European countries," the 39-year-old politician said.
    Greece's banking system is on the brink of collapse, with estimates its four top banks have less than 1 billion euros of liquidity remaining, and could need nationalizing.
    The ECB is likely to maintain emergency funding for Greek banks at its current restricted level, according to market analysts, which will see lenders run out of cash soon.
    For Schneider, the referendum result has not helped Greece's negotiating position.
    "It has worsened the situation for Greece in my point of view. The economy is nose-diving, the banks are closed and won't be opened. If Greece isn't ready to commit to a reform plan and accept the cuts in the military spending and the tax rises for the super-rich, then there is no way out. So I don't see Greece's position as strengthened. In the opposite, it is more that it has strengthened the radical forces in Greece and made it much, much harder for Europe to compromise with them," he stated.
    Head of the SPD parliamentary faction, Thomas Oppenheimer, agreed.
    "Nothing has become clearer through the referendum in Greece. The only thing that is clear is that there won't be an aid-packet without any effort nor without a concrete program. And so now we want to wait and see how the negotiations pan out," he said.
    The exposure of overseas banks to Greece is relatively modest, after lenders, notably those from France and Germany, sold businesses and scaled back their Greek assets in the past four years. But investors are worried the crisis could drive up borrowing costs for governments and companies and increase losses from bad loans.
    European leaders have called a summit for Tuesday (July 7) to discuss their next move after the surprisingly strong victory by the 'No' camp. German Chancellor Angela Merkel will travel to Paris later on Monday to discuss the result of the Greek referendum with French President Francois Hollande.
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