Greek finance rebel gets the cold shoulder in Riga

When Yanis Varoufakis warned his fellow euro-area finance chiefs of the dangers of pushing his government in Athens too far, Peter Kazimir snapped. Kazimir, Slovakia’s finance minister, launched a volley of criticism at his Greek counterpart, releasing months of pent-up frustrations among the group at the political novice.

They’d had enough of what they called the economics professor’s lecturing style and his failure to make good on his pledges. The others at last Friday’s gathering in Riga, Latvia, took their cue from Mr Kazimir – they called Mr Varoufakis a time waster and said he would never get a deal if he persisted with such tactics.

The criticism continued after the meeting: eight participants broke decorum to describe what happened behind closed doors. A spokesman for Mr Varoufakis declined to respond to their descriptions. “All the ministers told him: this can’t go on,” Spain’s Luis de Guindos said the following day. “The feeling among the 18 was exactly the same. There was no kind of divergence.”

Isolation

The others who provided an account of the meeting in interviews asked not to be named, citing the privacy of the talks. Mr Varoufakis’s isolation raises the stakes, which include a potential default and keeping the euro indivisible.

After more than five years as a ward of the European Union, Greece is virtually out of cash. The aid pipeline is shut until prime minister Alexis Tsipras, elected in January promising to push back against budget cuts, bends to EU policy demands.

Alluding to the political conflict, Mr Varoufakis borrowed a line from a 1936 speech by US president Franklin D Roosevelt. “They are unanimous in their hate for me; and I welcome their hatred,” Mr Varoufakis said on Twitter on Sunday. The quotation is “close to my heart (and reality) these days”, he wrote.

The breakdown came as Greece heads into a week of heightening fiscal tension. The first of two International Monetary Fund payments is due on May 6th and the government still doesn’t know if it has enough money to pay pensioners and state employees this week. Mr Varoufakis sought to squeeze aid from the rest of the euro area accepting the full slate of EU demands, a gambit rejected by the group’s leader, Jeroen Dijsselbloem.

Mr Varoufakis described the talks as “intense” and said his country is ready to make “big compromises” for a deal. “The cost of no solution would be enormous not only for us but also for all,” he said.

Varoufakis cut a lonely figure on Friday morning as he prepared for the meeting. In remarks to the assembled ministers, he defended protecting public pensions, a key sticking point in the negotiations. He threatened to walk away from talks if creditors pushed too hard. When Dijsselbloem invited the group to respond, he was greeted by silence. He asked again and Mr Kazimir spoke up.

Mr Varoufakis’s refusal to accept the conditions of Greece’s creditors particularly riled the Mr Kazimir because Slovakia’s government has slashed the budget deficit and cracked down on tax evasion.

Deaf ears

Mr Varoufakis’s position may also have fallen on deaf ears among his hosts in Riga. Latvia’s economy shrank by more than a fifth in 2008 and 2009 when the country was led by Valdis Dombrovskis, now vice-president of the European Commission.

Mr Dombrovskis pushed through some of the world’s harshest austerity measures.

The Greek economy has shrunk by about a quarter since 2008. – (Bloomberg)