Varoufakis finally forced to face financial facts

IMF Director Christine Lagarde and Greek Finance Minister Yannis Vaurofakis face off, showing a marked resemblance to one another.

By Carolyn Yeager

The latest Greek hero to swagger around on the world stage, Yannis Varoufakis is now having to pull back from his braggadocio and unrestrained comments about Germany. Finally forced to face the financial facts of Europe's unwillingness to continue indulging Greece as Europe's spoiled child, Varoufakis is relenting and may even have lost some standing with his Prime Minister, Alexis Tsipris.

His latest comment no longer insists that the "middle-finger video" was faked, since he's been caught out on that one. He has now written a "pretend" conciliatory blog post addressed to Germany, calling for an end to the "toxic blame game." He presents this blame as coming from both sides, whereas it was 95 to 100% the work of himself and Tsipris, and their Syriza Party political strategy. Their German  counterparts were simply responding as accurately as they could to some outrageous demands and insults from this new Greek government.

But now, in this latest blog post titled "Of Greeks and Germans: Re-imagining our shared future," the wily finance minister says of the video controversy only this:

"Any sensible person can see how a certain video has become part of something beyond a gesture. It has sparked off a kerfuffle reflecting the manner in which the 2008 banking crisis began to undermine Europe's badly designed monetary union, turning proud nations against each other.”

Is this his way of admitting the gesture? No mention now that the "certain video" was not authentic. No apology either, or even an acknowledgement that he might have spoken rashly. No, he seems to have dropped the "fake video" charges against German media.

Disastrous beginning

I would say that the opening weeks of the Syriza party's rule in Greece have been disastrous, leaving them with little sympathy from anyone. Some are expecting (maybe hoping for?) a "Grexit" even though they cannot say so publicly. Just today it was reported that Austrian Finance Minister Hans Joerg Schelling said in a radio interview that a lack of trust was a major problem with Greece among it's euro zone partners. He said:

If Athens does not step up efforts to honour terms of its current bailout package, it will find few allies in Europe should it need a third rescue.

All euro zone members [not just Germany] insist Greece respect the rules to let more money flow [to Greece].

We have two problems at the moment. One is (a) problem of trust with Greece, because when we decide something it is something else again the next day.

The second problem is we are not getting facts and figures and it is very difficult to decide on (the basis of) nothing.

Greece's accord with euro zone finance ministers spelled out that Prime Minister Alexis Tsipras's government should not introduce measures in parliament that have not been agreed in advance.

But they do this every day, and that does not promote the basis of trust. That is the biggest problem we have at the moment.

A third bailout package for Greece would be legally possible only once the second one was successfully concluded.

This process is under way now. According to many assessments it may not conclude successfully.

We have said clearly that we want to help Greece but it also has to accept the help. Every programme has certain conditions and these conditions are to be respected, but if one doesn't want to respect the conditions then I think most countries are no longer ready to go into a third package.

My assessment is that Greece is not going to change, so I hope Europe doesn't go to extreme measures to help them. To be on the safe side, Tsipris has scheduled a visit to Moscow for April 8. Maybe that is the ultimate answer for this bankrupt, now communist government.