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Greece crisis: Finance Minister Yanis Varoufakis resigns despite Greek people voting against Eurozone 'ultimatum'

'I wear the creditors' loathing with pride'

By Caroline Crawford, Gavin Cordon and Mehreen Khan

Published 06/07/2015

Greek Finance Minister Yanis Varoufakis has resigned after the Greek referendum rejected international bailout terms.
Greek Finance Minister Yanis Varoufakis has resigned after the Greek referendum rejected international bailout terms.
People celebrate in Athens on July 5, 2015 after the first exit-polls of the Greek referendum. Over 60 percent of Greeks rejected further austerity dictated by the country's EU-IMF creditors in a referendum, results from 20 percent of polling stations showed. AFP PHOTO / LOUISA GOULIAMAKILOUISA GOULIAMAKI/AFP/Getty Images
A bank employee distributes tag queue positions to elderly people to enter into the bank to withdraw a maximum of 120 euros ($134) for the week in Athens, Monday, July 6, 2015.
Greek Prime Minister Alexis Tsipras leaves his office, before his meeting with the Greek president and Greek political leaders, in Athens, on July 6, 2015, after early results showed those who rejected further austerity measures in a Greek crucial bailout referendum were poised to win.

Greeks have stunned the European Union by voting overwhelmingly to reject the austerity terms demanded by the country's international creditors.

With almost all votes counted, Finance Minister Yanis Varoufakis said the Greek people had sent back the "ultimatum" from the eurozone and the International Monetary Fund (IMF).

The Greek finance minister, whose forceful denunciations of creditors alienated many of his euro zone colleagues, said Prime Minister Alexis Tsipras believed it would help smooth the path to a new aid deal.

His resignation comes after Greeks delivered a resounding 'No' to the conditions of a rescue package with international creditors, casting the country into uncharted waters and a possible exit from Europe's common currency.

With relations already frosty, Varoufakis infuriated Greece's European partners last week when he accused creditors of using "terrorism" against the Greek people to intimidate them into accepting more austerity.

In a statement, Varoufakis said he had been "made aware" that some members of the euro zone considered him unwelcome at meetings of finance ministers, "an idea 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 said.

"And I shall wear the creditors' loathing with pride."

The result - with more than 60pc voting No - represents a sensational victory for the country's radical left Prime Minister Alexis Tsipras, who had gambled all on the outcome of the referendum.

But it leaves the country facing an uncertain future - with opponents warning he needs a new bailout deal fast if he is to avoid a catastrophic financial crash that could send it spinning out of the single currency.

With Greek banks rapidly running out of cash, European Council President Donald Tusk has called an emergency summit of eurozone leaders for tomorrow after appeals by German Chancellor Angela Merkel and French President Francois Hollande

Ms Merkel and Mr Hollande - the leaders of the two biggest eurozone members - will meet today in Paris for crisis talks.

In London, David Cameron will meet Chancellor George Osborne, Bank of England Governor Mark Carney and other senior officials to discuss the likely impact on the UK.

In Athens, jubilant supporters of the Syriza government poured into Syntagma Square opposite the Greek parliament to celebrate what they regarded as a famous triumph and a decisive rejection of austerity.

Mr Varoufakis said the Greek Government would now reach out to the institutions - the IMF, the European Commission, and the European Central Bank (ECB) - to try to find an agreed way forward.

Mr Tsipras said the debt issue would now be on the negotiating table and said he was willing to continue discussions about economic reforms.

"With this No we will try to co-operate with our partners and we will invite them one by one to see if we can find some common ground," he said.

However, it was far from clear what appetite there would be among the creditors for fresh talks with trust on both sides apparently at rock bottom.

As the Syriza government celebrated a historic win, members of the party insisted that Europe now needed to listen to the people.

Speaking to the Irish Independent, a member of the Syriza central committee described the outcome as "an enormous victory".

Strathis Kouvelakis said: "We have secured a No vote with the banks closed since Monday and a lot of instability.

"We have been under siege and the reaction has been hysterical.

"There has been a climate of fear and hysteria."

Mr Kouvelakis said Syriza was now focusing on a return to negotiations, but would not accept the previous deal that was offered.

"The Greek people have made it absolutely clear they will not accept this deal," he said.

Mr Kouvelakis, who teaches at King's College London, said it would now be up to the ECB as to whether Greek banks would reopen tomorrow.

"This will depend on a decision by the ECB and it will show how serious Europe is about proper negotiation," he told the Irish Independent.

Meanwhile, European investors were braced for tumbling stock markets today after Greeks overwhelmingly rejected the bailout terms of their creditors.

The No vote is set to ensure that Greece's creaking banking system will continue to be starved of liquidity, keeping them closed beyond the end of their mandated bank holiday, which is due to end tomorrow.

Sources insist the banks will be unable to open in the forseeable future and that ATMs will begin running out of cash by the middle of this week.

At least one of the four major banks was reported to have all but run out of cash, despite the imposition of capital controls which have limited ATM transactions to €60 a day.

The Bank of Greece was due to request an additional injection of emergency liquidity assistance from the ECB.

However, with voters rejecting the conditions of the country's paymasters, the ECB is almost certain to keep liquidity assistance frozen at nearly €88.4bn.

Mr Varoufakis was due to discuss extending capital controls measures with the Greece's senior bankers last night. Greek stock markets have also been suspended.

European Parliament president Martin Schulz warned a No vote in the referendum would mean Greeks could no longer use the euro, forcing them to print IOUs to pay public sector salaries and pensions, and introduce another currency:

Irish Independent

Yanis Varoufakis's resignation statement

"The referendum of 5 July will stay in history as a unique moment when a small European nation rose up against debt bondage.

"Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25 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.

"And I shall wear the creditors’ loathing with pride.

"We of the left know how to act collectively with no care for the privileges of office. I shall support fully Prime Minister Tsipras, the new minister of finance, and our government.

"The superhuman effort to honour the brave people of Greece, and the famous oxi (no) that they granted to democrats the world over, is just beginning."

Irish Independent

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