Yanis Varoufakis didn’t think it would come to this.
A little over a year ago, the Greek FinMin documented his thoughts [5] on a possible Greek endgame, asking “what if Berlin and Frankfurt don’t budge and tell Athens to go jump off the tallest cliff”? That, Varoufakis said, was unlikely because “Berlin will prefer to accommodate the Greek government and to look with a great deal more kindness on the request for a debt relief conference.”
14 months and one referendum gamble later and Berlin is all out of accommodation and has indeed told Athens to “go jump off the tallest cliff,” which means that if the Greek people make the ‘wrong’ decision on Sunday by voting to accept the (no longer valid) demands of creditors, Varoufakis may be forced to do what anyone would do in the event of an adverse referendum outcome: pen a resignation letter and cut off an arm. Bloomberg has more [6]:
Yanis Varoufakis said Greece won’t “extend and pretend” that it can pay its debts, vowing to quit as finance minister if voters don’t support him in Sunday’s referendum.
With banks shuttered and Greece’s economy hobbled by capital controls, Varoufakis said in a Bloomberg Television interview in Athens that he would “rather cut my arm off” than sign a deal that fails to restructure Greece’s debt. The 54-year-old economics professor said he “will not” continue in his post if Greece endorses austerity in the plebiscite.
The minister’s comments illustrate the gulf between Greece’s government, which swept into office on a wave of discontent about budget cuts, and the creditors who are threatening to push it out of the euro. European governments led by Germany have condemned last weekend’s decision by Prime Minister Alexis Tsipras to pull out of talks and call a snap referendum on the conditions for financial aid. Polls suggest it’s too close to call.
Tsipras, Varoufakis and their Syriza party are urging Greeks to vote “no,” arguing that Greece can remain in the single currency on better terms if they do so -- a contention rejected by creditors. A “yes” vote could lead to the collapse of the Tsipras government and fresh elections, a possibility to which Varoufakis alluded.
“Maybe we’ll change the configuration of the government because some of us will not be able to stomach it,” said Varoufakis, adding he would help ensure a smooth transition.
The idea that the government may soon have to be reshuffled echoes what we’ve said for months [7]. “It is becoming increasingly clear that the Syriza show will ultimately have to be canceled in Greece (or at least recast) if the country intends to find a long-term solution that allows for stable relations with European creditors,” we noted in “Democracy Under Fire.”
So at the very least, a "yes" vote on Sunday could mean a shakeup in Syriza's leadership. Whether that means Tsipras will simply preside over a more moderate party with new coalition partners or that the PM will himself will be forced out remains to be seen, but either way, it's clear that this weekend's popular vote represents far more than a vote on the troika's proposals. It's a vote on euro membership, democratic principles, and apparently, on whether to whisk Syriza from office with the same fanfare to which they were inaugurated.
