BackGreece warns of possible referendum ahead of crucial meeting
The last time Greece threatned of a referendum, global markets panicked, Euro partners were infuriated and PM Papandreou fell out
Premium(Kostas Tsironis/Bloomberg)
Rome: Finance minister Yanis Varoufakis has upped the stakes sharply ahead of Monday’s crucial Eurogroup meeting in Brussels by raising the prospect of new Greek elections or even a referendum on any debt deal.
If eurozone ministers do not accept seven major reforms Greece has put forward to unlock the next tranche of its much-needed bailout, “there could be problems," he warned in an interview with Italian newspaper Corriere della Sera on Sunday.
“We can go back to elections. Call a referendum," he told the daily, adding “we are not glued to our seats yet."
The last time Greece threatened a referendum on its bailout in November 2011, it sent global markets into panic, infuriated its European partners and led to the fall of its then prime minister George Papandreou.
Varoufakis dismissed reports Greece was hoping to secure a new loan, saying he did “not believe it is necessary" and insisting the country would “not return to the mechanism of loans in exchange for a programme to be respected."
In the interview, given on the sidelines of a conference in Venice, he accused the EU of hampering Greece’s efforts to pull clear of a deep recession by spooking investors with warnings Athens could crash out of the eurozone.
“Greece is not back in recession, for the simple reason that it never came out of recession. Because of deflation, the nominal GDP drops even if the real one grows. I want the nominal GDP to grow," he said.
“But the drop in prices is politically engineered. Who will invest in Greece if they continuously hear about a ‘Grexit’, our exit from the eurozone?" he asked, slamming talk of a Grexit as “poisonous" behaviour.
He also complained Europe is “like a big ship which takes time to change course. And if the change comes from a radical left government, the fear prevails that there is something shady behind it."
The high-profile Varoufakis, who has reportedly been warned by his own prime minister to talk less and do more, broke several days of silence to challenge the Eurogroup ahead of the crucial Brussels meet.
Greece’s new government has until April to present reform proposals to its EU-IMF creditors. Athens is scrambling to find cash to address a daunting repayment schedule, with over €6.0 billion ($6.8 billion) due this month.
But Varoufakis said he was not daunted by the risk of failing to clinch a deal with Brussels or EU paymaster Germany, which has turned down flat Athens’ demands to renegotiate its bailout commitments.
“I believe the government would survive anyway," he said.
“Our great strength is our bond of trust with the people. We do not lie to Greeks. After five years in which the establishment claimed it wanted to save Greece, and put everything on the shoulders of the poor, people understand."
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