Varoufakis Reveals Europe's Stunning Denial Of Greek People's Right To Vote

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Subvmitted by Martin Armstrong via,

Greece’s Finance Minister Yanis Varoufakis has come out and revealed the quite shocking and anti-Democratic events that took place during the last Eurogroup meeting.


The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals – proposals crucial for Greece’s future in the Eurozone. The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt. I was even asked: “How do you expect common people to understand such complex issues?”. Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting! But nor did European institutions. After our request was rejected, the Eurogroup President broke with the convention of unanimity (issuing a statement without my consent) and even took the dubious decision to convene a follow up meeting without the Greek minister, ostensibly to discuss the “next steps”.


Can democracy and a monetary union coexist? Or must one give way? This is the pivotal question that the Eurogroup has decided to answer by placing democracy in the too-hard basket. So far, one hopes.

Below is his full speech to the Eurogroup members
Intervention by Yanis Varoufakis, 27th June 2015 – Eurogroup Meeting



In our last meeting (25th June) the institutions tabled their final offer to the Greek authorities, in response to our proposal for a Staff Level Agreement (SLA) as tabled on 22nd June (and signed by Prime Minister Tsipras). After long, careful examination, our government decided that, unfortunately, the institutions’ proposal could not be accepted. In view of how close we have come to the 30th June deadline, the date when the current loan agreement expires, this impasse of grave concern to us all and its causes must be thoroughly examined.


We rejected the institutions’ 25th June proposals because of a variety of powerful reasons. The first reason is the combination of austerity and social injustice they would impose upon a population devastated already by… austerity and social injustice. Even our own SLA proposal (22nd June) is austerian, in a bid to placate the institutions and thus come closer to an agreement. Only our SLA attempted to shift the burden of this renewed austerian onslaught to those more able to afford it – e.g. by concentrating on increasing employer contributions to pension funds rather than on reducing the lowest of pensions. Nonetheless, even our SLA contains many parts that Greek society rejects.


So, having pushed us hard to accept substantial new austerity, in the form of absurdly large primary surpluses (3.5% of GDP over the medium term, albeit somewhat lower than the unfathomable number agreed to by previous Greek governments – i.e. 4.5%), we ended up having to make recessionary trade-offs between, on the one hand, higher taxes/charges in an economy where those who pay their dues pay through the nose and, on the other, reductions in pensions/benefits in a society already devastated by massive cuts in basic income support for the multiplying needy.


Let me say colleagues what we had already conveyed to the institutions on 22nd June, as we were tabling our own proposals: Even this SLA, the one we were proposing, would be extremely onerous to pass through Parliament, given the level of recessionary measures and austerity it entailed. Unfortunately, the institutions’ response was to insist on even more recessionary (aka parametric) measures (e.g. increasing VAT on hotels from 6% to 23%!) and, worse still, on shifting the burden massively from business to the weakest members of society (e.g. to reduce the lowest of pensions, to remove support for farmers, to postpone ad infinitum legislation that offers some protection to badly exploited workers).


The institutions new proposals, as expressed in their 25th June SLA/Prior Actions document, would make a politically problematic package – from the perspective of our Parliament – into a package that would extremely difficult to push through our Parliamentary caucus. But this is not all. It gets worse much worse than that once we take a look at the proposed financing package.


What makes it impossible to pass the institutions’ proposal through Parliament is the lack of an answer to the question: Will these painful measures at least give us a period of tranquillity during which to carry out the agreed reforms and measures? Will a shock of optimism counter the recessionary effect of the extra fiscal consolidation that is being imposed on a country that has been in recession for 21 consecutive quarters? The answer is clear: No, the institutions’ proposal is offering no such prospect.


This is why: The proposed funding for the next 5 months (see below for a breakdown) is problematic in a variety of ways:


First, it makes no provision for the state’s arrears, caused by five months of making payments without disbursements and of falling tax revenues as a result of the constant threat of Grexit that has been wafting in the air, so to speak.


Secondly, the idea of cannibalising the HFSF in order to repay the ECB’s SMP-era bonds constitutes a clear and present danger: These monies were earmarked, correctly, for strengthening Greece’s fragile banks, possibly through an operation that deals with their mountainous NPLs that eat into their capitalisation. The answer I have been given by senior ECB officials, whose name will remain unsaid, is that, if need be, the HFSF will be replenished to cope with the banks’ capitalisation needs. And who will do the replenishing? The ESM, is the answer I was given. But, and this is a gigantic but, this is not part of the proposed deal and, moreover, it could not be part of the deal as the institutions have no mandate to commit the ESM in this manner – as I am sure Wolfgang will remind us all. And, moreover, if such a new arrangement could be made, why then is our sensible, moderate, proposal of a new ESM facility for Greece that helps shift SMP liability from the ECB to the ESM not discussed? The answer “we will not discuss it because we will not discuss it” will be very hard for me to convey to my Parliament, together with another package of austerity.


Thirdly, the proposed disbursements’ schedule is a minefield of reviews – one per month – that will ensure two things. First, that the Greek government will be immersed every day, every week in the review process for five long months. And well before these five months expire, we shall enter into another tedious negotiation over the next program – since there is nothing in the institutions’ proposal capable of inspiring even the faintest of hopes that at the end of this new extension Greece can stand on its own two feet.


Fourthly, given that it is abundantly clear that our debt will remain unsustainable by the end of the year, and that market access will remain as distant then as it is now, the IMF cannot be counted upon to disburse its share, the 3.5 billion that the institutions are counting as part of the funding package on the table.


These are solid reasons why our government does not consider it has a mandate to accept the institutions’ proposal or to use its majority in Parliament in order to push it through and onto the statutes.


At the same time, we do not have a mandate to turn down the institutions’ proposals either, cognizant of the critical moment in history we find ourselves in. Our party received 36% of the vote and the government as a whole commanded a little more than 40%. Fully aware of how weighty our decision is, we feel obliged to put the institutions’ proposal to the people of Greece. We shall endeavour to spell out to them fully what a Yes to the Institutions’ Proposal means, to do the same regarding a No vote, and then let them decide. For our part we shall accept the people’s verdict and will do whatever it takes to implement it – one way or another.


Some worry that a Yes vote would be a vote of no confidence in our government (as we shall be recommending a No vote), in which case we cannot promise to the Eurogroup that we shall be in a position to sign and implement the agreement with the institutions. This is not so. We are committed democrats. If the people gives us a clear instruction to sign up on the institutions’ proposals, we shall do whatever it takes to do so – even if it means a reconfigured government.

Colleagues, the referendum solution is optimal for all, given the constraints we face.

  • If our government were to accept the institutions’ offer today, promising to push it through Parliament tomorrow, we would be defeated in Parliament with the result of a new election being called within a very long month – then, the delay, the uncertainty and the prospects of a successful resolution would be much, much diminished
  • But even if we managed to pass the institutions’ proposal through Parliament, we would be facing a major problem of ownership and implementation. Put simply, just as in the past the governments that pushed through policies dictated by the institutions could not carry the people with them, we too would fail to do so.

On the question that will be put to the Greek people, much has been said about what it should be. Many of you tell us, advise us, instruct us even, that we should make it a Yes or No question on the euro. Let me be clear on this. First, the question was formulated by the Cabinet and has just been passed through Parliament – and it is “Do you accept the institutions’ proposal as it was presented to us on 25th June in the Eurogroup?” This is the only pertinent question. If we had accepted that proposal two days ago, we would have had a deal. The Greek government is now asking the electorate to answer the question you put it to me Jeroen – especially when you said, and I quote, “you can consider this, if you wish, a take or leave it proposal”. Well, this is how we took it and we are now honouring the institutions and the Greek people by asking the latter to deliver a clear answer on the institutions’ proposal.


To those who say that, effectively, this is a referendum on the euro, my answer is: You may very well say this but I shall not comment. This is your judgement, your opinion, your interpretation. Not ours! There is a logic to your view but only if there is an implicit threat that a No from the Greek people to the institutions’ proposal will be followed up by moves to eject Greece, illegally, out of the euro. Such a threat would not be consistent with basic principles of European democratic governance and European Law.


To those who instruct us to phrase the referendum question as a euro-drachma dilemma, my answer is crystal clear: European Treaties make provisions for an exit from the EU. They do not make any provisions for an exit from the Eurozone. With good reason, of course, as the indivisibility of our Monetary Union is part of its raison d’ etre. To ask us to phrase the referendum question as a choice involving exit from the Eurozone is to ask us to violate EU Treaties and EU Law. I suggest to anyone who wants us, or anyone else, to hold a referendum on EMU membership to recommend a change in the Treaties.



It is time to take stock. The reason we find ourselves in the present conundrum is one: Our government’s primary proposal to you and the institutions, which I articulated here in the Eurogroup in my first ever intervention, was never taken seriously. It was the suggestion that common ground be created between the prevailing MoU and our new government’s program. For a fleeting moment, the 20th February Eurogroup statement raised the prospect of such common ground – as it made no reference to the MoU and concentrated on a new reform list by our government that would be put to the institutions.


Regrettably, immediately after the 20th of February the institutions, and most of colleagues in this room, sought to bring the MoU back to the centre, and to reduce our role in marginal changes within the MoU. It is as if we were told, to paraphrase Henry Ford, that we could have any reform list, any agreement, as long as it was the MoU. Common ground was thus sacrificed in favour of imposing upon our government a humiliating retreat. This is my view. But it is not important now. Now it is up to the Greek people to decide.


Our task, in today’s Eurogroup, ought to be to pave the ground for a smooth passage to the referendum of 5th July. This means one thing: that our loan agreement be extended by a few weeks so that the referendum takes place in conditions of tranquillity. Immediately after 5th July, if the people have voted Yes, the institutions’ proposal will be signed. Until then, during the next week, as the referendum approaches, any deviation from normality, especially in the banking sector, will be invariably interpreted as an attempt to coerce Greek voters. Greek society has paid a hefty price, through huge fiscal contraction, in order to be part of our monetary union. But a democratic monetary union that threatens a people about to deliver their verdict with capital controls and bank closures is a contradiction in terms. I would like to think that the Eurogroup will respect this principle. As for the ECB, the custodian on our monetary stability and of the Union itself, I have no doubt that, if the Eurogroup takes a responsible decision today to accept the request for an extension of our loan agreement that I am now tabling, it will do what it takes to give the Greek people a few more days to express their opinion.


Colleagues, these are critical moments and the decisions we make are momentous. In years to come we may well be asked “Where were you on the 27th of June? And what did you do to avert what happened? At the very least we should be able to say that: We gave the people who live under the worst depression a chance to consider their options. We tried democracy as a means of breaking a deadlock. And we did what it took to give them a few days to do so.


POSTSCRIPT – The day the Eurogroup President broke with the tradition of unanimity and excluded Greece from a Eurogroup gathering at will


Following my intervention (see above) the Eurogroup President rejected our request for an extension, with the support of the rest of the members, and announced that the Eurogroup would be issuing a statement placing the burden of this impasse on Greece and suggesting that the 18 ministers (that is the 19 Eurozone finance ministers except the Greek minister) reconvene later to discuss ways and means of protecting themselves from the fallout.


At that point I asked for legal advice, from the secretariat, on whether a Eurogroup statement can be issued without the conventional unanimity and whether the President of the Eurogroup can convene a meeting without inviting the finance minister of a Eurozone member-state. I received the following extraordinary answer: “The Eurogroup is an informal group. Thus it is not bound by Treaties or written regulations. While unanimity is conventionally adhered to, the Eurogroup President is not bound to explicit rules.” I let the reader comment on this remarkable statement.


For my part, I concluded as follows:


Colleagues, refusing to extend the loan agreement for a few weeks, and for the purpose of giving the Greek people an opportunity to deliberate in peace and quiet on the institutions’ proposal, especially given the high probability that they will accept these proposals (contrary to our government’s advice), will damage permanently the credibility of the Eurogroup as a democratic decision making body comprising partner states sharing not only a common currency but also common values.

*  *  *

First, they do hate Yanis’ guts for he does understand far more about the economy than anyone in Brussels. Any further discussions they demand will be without him.

What led to the EU breaking off was exactly what we reported previously – they do not want any member state to EVER allow the people to vote on the Euro.

Brussels has become a DICTATORSHIP and is so arrogant without any just cause that they know better than the people.

We are watching the total collapse of Democracy and the birth of a new era – Economic Totalitarianism from Arrogant people who are totally clueless beyond their own greed for power and money.

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Ignatius's picture

We're all Palestinians now, so to speak.

PhilB's picture

If TSipras really wanted to guarantee a referendum then he should have called for one before the programs expire so he gives the public a chance to be informed. This is a desperate move from a dangerous man. He must go!!

whotookmyalias's picture

Power always sincerely, believes itself right. Power always thinks it has a great soul and vast views, beyond the comprehension of the weak.

TheRedScourge's picture

Article is bullshit. The Greek people chose decades of socialism and living beyond their means. Reality in the form of their debtors reasserting itself is not "economic totalitarianism", or "anti-democratic". Democracy is rule by the swords of the dumbest 51%. Live by the sword, die by the sword. It's that simple.

Bumpo's picture

How many Americans would vote for Open Borders, Illegal Amnesty, Carbon Taxes or TPP if it was a democratic vote offered to the people? Not many.

smithcreek's picture

This is so exciting!  I can't decide who to root for, the people that borrowed money they knew they would never repay, or the people that lent money to people they knew would never repay them.

Four chan's picture

the new sovereignty is no sovereignty. 

Chief KnocAHoma's picture

The voters... please... when was the last time they actually mattered? Maybe back in the day when they weren't afraid to build a guiloteen.

BurningFuld's picture

smithcreek. Let me try to sway you. Remember the people that lent the money that they knew would never be repaid just conjured it out of thin air. If it were real money they were lending (gold) they would have actually had to earn said money before lending it and I can guarantee you there is no fucking way they would ever lend it if they had to do that!

Antifaschistische's picture

"will damage permanently the credibility of the Eurogroup as a democratic decision making body comprising partner states sharing not only a common currency but also common values"   Varoufakis

lol....seriously?  Who ever thought the EU was a democratic institution!!!

Veriton's picture

From my NWO Schedule of Implementation page...

“The script of the play calls for Greece, the ‘birthplace of democracy,’ to flee the ‘anti-democratic’ West and join the ‘BRICS rebellion against the evil Western central bankers.’”

Not only does this ZH article's title hit the “anti-democratic West” talking point, it also touches on what I wrote about in Understanding the NWO Strategy. As I’ve said innumerable times, the “Economic Totalitarianism from Arrogant [European] people” is a clear evil that is being widely advertised to stir an emotional reaction amongst the sheeple. The globalists WANT the sheeple to see this evil coming upon them so the herd will want to flee to safety. And to where shall those scared sheepfolk go? To the BRICS and their NWO of course, just like the Greeks will do next week. We are meant to flee the scary Left Hand of the globalists to find sanctuary in their reassuring Right Hand.

Elliott Eldrich's picture

"I can't decide who to root for, the people that borrowed money they knew they would never repay, or the people that lent money to people they knew would never repay them."

I'm rooting for the human race, and the possibility of it finally being set free after the global debt-money financial clusterfuck and economic rape camp spontaneously implodes and immolates itself in a glorious funeral pyre composed of hundreds of trillions of dollars in cross-linked co-dependent derivatives all becoming worthless in a single day. It will be like watching a building constructed out of flash paper igniting and disintegrating in an instant. It is more than a little ironic that the initial spark to ignite this pyre may be none less than the "birthplace of democracy." 

Zoomorph's picture

Not many middle class white Americans, but those are now so far in the minority that a democratic referendum on the above issues may well pass.

StateofFraud's picture

How many would vote at all?

57% of eligible voters cast a ballot in the 2012 presidential election, and 51% of them voted for Obama.

More than three-fourths of millennials cannot name one of their home state’s senators.

Not saying the solution is technocratic tyranny. But will say the scales tipped when the bankers got control of the dollar and printing press.

TeamDepends's picture

Yes, the differnce between democracy and Republic is night and day. The fact that the majority of westerners don't understand this explains why we are circling the drain.

Bobbo's picture

a rather curious use of the word, "Rebublic," if you ask me.  are you sure you know what that word actually refers to?

TeamDepends's picture

Yes, you clearly don't understand the difference so watch the video then this one:

ThirdWorldDude's picture

Let me rephrase my eternal question to you: 

What exactly is the difference between Democracy and a Republic, or, if the USSA reeeeally is a Republic, then why is gay marriage legal on a federal level?

TeamDepends's picture

Oh no, you blew your chance by talking smack last time. The Red Beckman videos are all there on youtube. Watch them and become enlightened, or don't and remain ignorant. The choice is yours.

ThirdWorldDude's picture

I watched only one and it lowered my IQ by 10 points. No wonder you avoid direct answers...

ThirdWorldDude's picture

Yes, and it's not zero eh but zero hedge.

TeamDepends's picture

Buh-bye then, enjoy your third world hellhole!

ThirdWorldDude's picture

What, you're leaving us? Don't let the door hit ya where your God split ya.

Speaking of 3rd world hellholes, you wouldn't know one even if you lived right in the middle of it...

asteroids's picture

You guys are all missing the point. Greeks understand that politicians are NOT smarter than to common man. Let every man decide from himself. That's why Greek politicians favour elections and referendoms.

Bobbo's picture

On the other hand.  There was this statement made by the Eurogroup legal counsel:


The Eurogroup is an informal group. Thus it is not bound by Treaties or written regulations. While unanimity is conventionally adhered to, the Eurogroup President is not bound to explicit rules.


It would seem to read that the Eurpgroup is not bound by treaties or written regulations.  But, how was this group formed?  By whose authority?  By what authority do they rule if not by the power of usurious debt tenuously backed by "force" of some obscure nature?  Is this what world government really amounts to, this "Eurogroup"?

ThirdWorldDude's picture

The working practices of EU bodies, primarily The Council and it's derivates (meetings of national ministers of various sectors, such as is the Eurogroup which consists of finance ministers of all Eurozone member states) as a concept is based on customary law. 

Reading the bolded statement, my first thought was that the Eurotards have just become "exceptional" and started making their own rules. Although, however infantile and imbecile this outburst of EU fascism against an existing EU member-state was, silencing Greece is the least of Eurotards' problems now; you see, when the Eurogroup decided to kick Varoufakis out and hold a Eurogroup-1 meeting I knew Greece is getting dumped from the EZ, ergo it not longer fulfills the basic requirement for being a Eurogroup member.

There's no love lost between Greece and Brussels and Tsipras is ready to pull the plug on this motherfucker. Geopolitically speaking, we're into uncharted territory.

newdoobie's picture

Hmmmm, who's at fault???

The Bank who loaned money knowing it couldn't be paid back, but loaned anyway due to the immediate kickbacks available?

The politicians who borrowed knowing it couldn't be paid back, but that would be rich and gone by the time the bill came due?

Megas Napoleon's picture

Both in my opinion, wouldn't be something if someday all politicians and all bankers faced punishment?

Doña K's picture

Most appropriate time for Spain's Podemos and France's Lapen to make strong statements supporting Greek positions.


Something Laconic such as "Next..." 

Oh regional Indian's picture

Excellent observation there.

Power blinds and absolute power blinds absolutely.

booboo's picture

The greeks will vote the same way a virgin does.

No! Don't! Stop!

no don't stop




l8apex's picture

For everyone downvoting PhilB, you need to educate yourself regarding the timeline of events.  Phil's comment is spot on.

The Greek people are getting screwed by their politicians, oligarchs, and the EU banking system.  Syriza could have asked for a referendum months ago.  Once the EU cuts them off, the people will be screwed as Syriza hasn't been working towards the next steps (i.e. printing drachmas)  So things are going to get ugly for the common folk.



TheReplacement's picture

That would be a problem for the Greeks and the Greeks only.  Anyone else demanding such can only be a tyrant and a dick.tator.

pods's picture

Oh yeah, and Largarde pees standing up!

pods's picture

"Let's put it this way, it will be easier to open up Angela's legs again than my banks."

chrsn's picture

Next up:  the expertise needed to vote for the appropriate candidate is too complicated to leave up to the people!

Ignatius's picture

Yes, they need an emergency infusion of Euro technocrats -- stat.

TheRedScourge's picture

If you vote for socialists for several decades, you turn the place to shit. Doesn't matter whether you're Detroit or Athens.

forexskin's picture

and this is greece's chance to live free, in poverty, until such time as they re-think whether the shared poverty of socialism is to their liking. or live as slaves to the technocrats.

coming soon to a govt negotiation near you.

FireBrander's picture

"Next up:"????

Fuck, that happened years back...2016've been GIVEN the choice of BushWhackerV2, CombOver, or Hildabeast.

AAA21's picture

As usual, Martin Armstrong is full of CRAP! The real problem is very simple:  Greeks (who should never have been allowed to join the Euro) want to continue MOOCHING off the rest of Europe in order to protect their ridiculous pension plans and armies of Government Employees.  The rest of Europe understandably doesn't want to continue subsidizing the boondoggle that is Greece.   So it is very simple:  The Greeks either balance their books or they leave the Euro!!!  NO MORE SUBSIDIES!

disabledvet's picture

18 percent seems like a pretty good "subsidy" to me.

booboo's picture

I tend to agree but at the same time the banks were shoving money at them and in effect HAD to because as we all know, modern banking depends on an ever increasing debt or it collapses so they both knew but this time the clock ran out on them as it will on everyone this time.

Scooby Doo's picture

AAA21 - Ok, they leave the Euro... What about all the monies already lent to them?  They are allowed to not repay any of it?  (Not that I think that they will repay it) The rest of Europe just absorbs the loss.  And then comes along Podemos in Spain, then Portugal, France, & Italy. Does the rest of Europe just absorb the loss from these countries also?  

It's a tough spot to be in.  Who will suffer more - the Greeks or the countries who lent money to those who could not repay it?

_Biggs_'s picture

Seriously dude.  Did you really just say that he is full of crap?

Everything is unfolding just as the computer has forecasted.  You must not have seen that slide from a 1985 Princeton Economics conference that said 2015:  Sovereign Debt Big Bang.  I suppose you have a website that has been promoting gold since 2011.  Give it up man.  The guy knows EXACTLY what he is talking about.  We are finally heading into that Cat 5 hurricane that some people want around here.  

I triple-dog-dare you to email what you said here to him.  He will blow you up for the whole world to see on his amazing blog.

Bay Area Guy's picture

So let me get this straight, the FinMin agrees with Victoria Nuland now and says, "Fuck the EU!"?

Government needs you to pay taxes's picture

First you have to pass the legislation before you can see what it means.  Everyone knows this.