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Three reasons why Tsipras and Varoufakis decided to part ways

Three reasons why Tsipras and Varoufakis decided to part ways

Greek Prime Minister Alexis Tsipras, late last night called (then) Finance Minister Yanis Varoufakis to his office in order to discuss, in an orderly manner, his resignation.

Why the sudden, and unexpected shake up at such a critical time…three reasons:

First, contrary to political etiquette and basic rules of diplomatic protocol and courtesy, Yanis Varoufakis made a public statement and official press statement after the referendum results before the country’s Prime Minister.

In Greek politics, and most political systems around the world, it is customary after such important events to allow the country’s head of state to make the first public statements before any government ministers and officials address the public.

Varoufakis broke with protocol, and asserted his view of the referendums meaning, as well as preempted the Prime Minister in setting up the agenda, and “framing” the next days going forward.

Second, the content of Varoufakis’s press statement was deemed unproductive to Tsipras’ mandate to deliver a viable debt deal in the next 48 hours. Given the extreme situation and dire circumstances facing the Greek economy, Tsipras was not pleased with the tone of Varoufakis’ statement. The Greek government is looking to ratchet down the rhetoric and work towards a deal in as calm a manner as possible.

Finally, the IOUs rumor/statement released by the UK’s Telegraph did not help Varoufakis’ cause.

“If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it a week ago,” said Yanis Varoufakis, the finance minister.

The comment “made” or “supposedly” made by Varoufakis claiming that Greece was to begin issuing IOUs, like California post Lehman crash, was a bombshell media report. Whether fact or fiction, leaked by the Telegraph in order to crash Greece’s victory celebration, is up for debate….The damage had been done.

Tsipras needed to move away from the panic such statements cause. The last thing Athens wanted, or needed, during the upcoming negotiations was to face their European peers with rumors of IOUs and Drachma printing presses.

See Also

Tispras had no choice but to move beyond Varoufakis and towards a more “Euro-friendly” finance minister.

The Greek people spoke their minds yesterday, and while 61% of the people want a solution that is viable and without additional austerity, an overwhelming majority of Greeks wish to remain part of the Eurozone.

An impossible mandate, most likely…but nonetheless this is what Tsipras and his new team must try to secure in the next days.

As for who will replace Varoufakis…we will find out after Tsipras’ meeting today with other party leaders.

Some possible replacements include current government Ministers such as Giannis Dragasakis or George Stathakis, as well as current Chief Economics Spokesman Eucleides Tsakalotos.

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