Former Greek Finance Minister: Bailout Deal Is ‘Fiscal Waterboarding’

Former Greek Finance Minister Yanis Varoufakis is arguably the most divisive figure in the seemingly never-ending Greek debt crisis. In the run-up to Greece’s missed IMF June 30 payment deadline, he compared modern Germans to Nazis. He resigned hours after the Greek people rejected European austerity demands in a July 5 referendum. The most vocal critic of the burgeoning bailout deal, he went on holiday before the Greek Parliament overruled its people and capitulated to Europe’s strict austerity demands last Friday.

Now, as the Greek Parliament prepares for a key vote necessary to free up a third, three-year bailout of between 82 billion and 86 billion euros, or $91.5 billion and $96 billion, he’s giving his opinion of the deal. To put it mildly, Varoufakis — a member of Greek Prime Minister Alexis Tsipras’s far-left Syriza party — doesn’t like it very much.

In a line-by-line takedown of the July 12 agreement, posted to his blog on Wednesday, Varoufakis accuses Europe of everything from trying to make Greeks “inhuman” to attempting to destroy the Greek economy. He said that the deal forces Greek employers to lower wages and that it gives Greece’s creditors — the IMF, the European Commission, and the European Central Bank — de facto control over the Greek government.

You can read the full document here. I’ve listed some highlights below (typos are from the original). Varoufakis’s comments are bolded.

On the overall agreement:

The Euro Summit stresses the crucial need to rebuild trust with the Greek authorities [i.e. the Greek government must introduce new stringent austerity directed at the weakest Greeks that have already suffered grossly].

A euro area Member State requesting financial assistance from the ESM [the European fund that would provide bailout funds] is expected to address, wherever possible, a similar request to the IMF This is a precondition for the Eurogroup to agree on a new ESM programme. Therefore Greece will request continued IMF support (monitoring and financing) from March 2016 [i.e. Berlin continues to believe that the Commission cannot be trusted to ‘police’ Europe’s own ‘bailout’ programs].

Given the need to rebuild trust with Greece, the Euro Summit welcomes the commitments of the Greek authorities to legislate without delay a first set of measures [i.e. Greece must subject itself to fiscal waterboarding, even before any financing is offered].

On what the Greek Parliament is voting on Wednesday:

the streamlining of the VAT system [i.e. making it more regressive, through rate rises that encourage more VAT evasion] and the broadening of the tax base to increase revenue [i.e. dealing a major blow at the only Greek growth industry — tourism].

On what Greeks must do by July 22:

The adoption of the Code of Civil Procedure, which is a major overhaul of procedures and arrangements for the civil justice system and can significantly accelerate the judicial process and reduce costs [i.e. foreclosures, evictions and liquidation of thousands of homes and businesses who are not in a position to keep up with their mortgages/loans.]

In order to form the basis for a successful conclusion of the MoU, the Greek offer of reform measures needs to be seriously strengthened to take into account the strongly deteriorated economic and fiscal position of the country during the last year [i.e. the Syriza government must accept the lie that it, and not the asphyxiation tactics of the creditors, caused the sharp economic deterioration of the past six months – the victim is being asked to take the blame by the on behalf of the villain.]

The Greek government needs to formally commit to strengthening their proposals [i.e. to make them more regressive and more inhuman] in a number of areas identified by the Institutions.

To fully normalize working methods with the Institutions, including the necessary work on the ground in Athens, to improve programme implementation and monitoring [i.e. The Troika strikes back and demands that the Greek government invite it to return to Athens as Conqueror – the Carthaginian Peace in all its glory.]

The Euro Summit takes note of the possible programme financing needs of between EUR 82 and 86bn, as assessed by the Institutions [i.e. the Eurogroup conjured up a huge number, well above what is necessary, in order to signal the debt restructuring is out and that debt bondage ad infinitum is the name of the game.]

The Euro Summit stresses that nominal haircuts on the debt cannot be undertaken [N.b. The Syriza government has been suggesting, since January, a moderate debt restructure, with no haircuts, maximizing the expected net present value of Greece’s repayments to creditors’ – which was rejected by the Troika because their aim was, simply, to humiliate Syriza.]

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