Athens: Greece reshuffled its bailout-negotiating team, clipping Finance Minister Yanis Varoufakis’s wings, after three months of talks with creditors failed to unlock aid and a meeting with his euro-area counterparts ended in acrimony.
The coordination of day-to-day efforts to strike a deal with creditors was handed to Deputy Foreign Minister Euclid Tsakalotos, a Greek government official said in an email to reporters on Monday. Varoufakis’s role will be limited to supervising the political negotiations with euro-area member states and the International Monetary Fund.
A Eurogroup meeting in Riga, Latvia on Friday descended into name-calling as the currency bloc’s finance ministers hurled abuse at Varoufakis, accusing him of being a time-waster, a gambler and an amateur. Still, the 54-year-old academic- turned-politician in the government of Prime Minister Alexis Tsipras remains popular at home.
“This move squares the circle, because it doesn’t look like Tsipras is surrendering by firing Varoufakis, but it to some extent has the same result,” said Michael Michaelides, a strategist at Royal Bank of Scotland Group Plc in London. “It doesn’t change the issues, but given the interpersonal nature of the Eurogroup, and since the finance ministers still remain in charge, this is significant.”
The change comes as Greece struggles to amass cash to pay its pensioners and employees this week. Europe’s most-indebted state is counting on deposits of local governments, cities and other funds to meet end-of-month payments of over 1.5 billion euros ($1.62 billion) after euro-area finance ministers on Friday said they won’t disburse more aid until bailout terms are met. State coffers will be further strained on May 6, when Greece needs to find 200 million euros for an IMF payment.
