By Francis Coppola
The new Finance Minister of Greece has been making waves. In a meeting with Eurogroup chairman Jeroen Dijsselbloem on January 30th he appeared to say that Greece would no longer cooperate with the Troika – the combination of the IMF, European Commission and the ECB that has been running Greece’s bailout programme. Dijsselbloem’s face was an absolute picture, as FT Alphaville gleefully reported.
Except, of course, that Varoufakis was speaking in Greek, so this isn’t what he actually said. And Dijsselbloem, who was listening via a translation service, did not hear what he actually said. Nor did the world’s journalists, who by and large also don’t speak Greek. Varoufakis (who is bilingual) later said that he perhaps should have made his remarks in English.
Nonetheless, his apparent refusal to deal with the Troika made headline news. The BBC’s headline claimed he said “No debt talks with EU-IMF Troika”. The FT put up an inflammatory headline saying that Varoufakis was refusing to work with the Troika. But the FT’s report explains it differently:
Mr Varoufakis….said Greece “is working from the standpoint of the best possible co-operation with its institutional partners and the International Monetary Fund but not with a [bailout] program that we think is anti-European.”
Eh? How is this “refusing to cooperate”? The reporters continue:
He also blasted the deeply unpopular bailout monitors from the European Commission, IMF and ECB, also known as “the troika”, saying: “We are not going to co-operate with a rottenly constructed committee.
Ah. The problem is what is meant by “the Troika”. In an interview with Emily Maitlis on the BBC’s Newsnight program later on January 30th, Varoufakis explained (in English) that the Troika has two levels: the institutions themselves, and the “bailout monitors” they have sent to Athens to ensure compliance with program demands. It is these monitors who have been rejected.
So Varoufakis is not refusing to cooperate with the European institutions and the IMF. On the contrary, he says he wants a “rational discussion” with them. He is repudiating the bailout program that they have constructed.
But why is he repudiating the bailout program? Varoufakis gave Maitlis an everyday example to explain his reasoning:
Suppose a friend of yours were to come to you and say that he or she had difficulty paying the mortgage because of a reduction in their income – they lost their job or something like that. They have a great idea on how to solve this problem: they would get a credit card and draw money from it in order to meet the mortgage payments for the next few months. Would you advise them that they should continue to take these tranches of loans from the credit card in order to deal with what is essentially an insolvency problem?
Astonishingly, Maitlis completely ignored this. How any decent journalist could let such an opportunity pass is beyond me. It is the heart of the matter.