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Varoufakis: “Agreement by June 30th”; reveals he was threatened with “capital controls” by European official

Finance Minister Yanis Varoufakis told media Thursday morning that an agreement with Greece’s creditors can be reached by “June 30th.” The date is some 10 days after Greece has to meet its obligations to the IMF with the payment of four tranches (5-19 June). The creditors have repeatedly said: no deal , not bailout money. this is the financial injection of €7.2 billion due as of August 2014. But the new Greek government had insisted from the very beginning that negotiations with creditors would last till the end of June. But to what result…

Speaking to Parapolitika fm, Yannis Varoufakis revealed that an official had threatened him with capital controls in the first week he assumed office.

“They threatened to impose capital controls if I don’t sign the Memorandum of Understanding the first week I assumed office as Finance minister,” Varoufakis said without revealing the name of the EZ or EU official but he explained that this official was not German FinMin Wolfgang Schaeuble.

Varoufakis described the negotiations as “complicated” and spoke of “good chemistry” between Juncker and Tsipras. He added that the role of the European Commission President is to bring together the creditors’ proposals and give a perspective to Greece and blamed the creditors’ disagreements among themselves as  as the “hurdle to an agreement.”

Furthermore he described the attitude of the IMF as “paradox’ saying that “they know we cannot sign any agreement when the Greek debt is not sustainable.”

The IMF speaks of “necessity for debt restructure but the European side considers, it  cannot afford it politically.”

Meanwhile, there are some indications that Greece will indeed make the crucial payment of 300 million euro the International Monetary Fund tomorrow, Friday.

Varoufakis did not want to reveal anything on this issue.

PS Is this guy who threatened Varoufakis with capital controls? Very Possible. He had said anyway in March 2013, that that the “Cyprus ‘solution’ of capital controls was a template for other Euro zone member states.


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  1. Don’t worry. We will find out soon enough who blackmailed once Varoufakis starts writing his books quoting from his tapes.

    First, unless I am totally ignorant, no one other than Greece can impose capital controls on its banking system. After all, that’s domestic legislation within the borders of Greece and we are not yet at the point where foreigners can legislate in Greece (from 1893 until 1978, the International Finance Commission could!).

    Greece, of course, like Cyprus then, can be pressured (‘blackmail’ is a term which I always only hear from the Greek side) to legislate capital controls. I see no other party than the ECB which could exercise such pressure by threatening to cut funding of the banking sector.

    The head of the Eurogroup has no effective instrument to pressure Greece into legislating capital controls short-term. He can only say “no deal unless you do it” and then there will be no deal for a while. The ECB can cut its funding overnight.

    I am often amazed how overly sensitive a person Varoufakis sometimes is (you know the German word “Mimose”). He felt blackmailed or pressured so many times but when he tells the whole world (via the NYT) that he is prepared to ‘blow the whole thing up’, it’s only normal negotiating tactic.

    • keeptalkinggreece

      it’s 99% obvious who did it, no?

      • I thought you suggested Dijsselbloem did it. Dijsselbloem can make all the threats he wants to, just like you and I can make threats. The question is whether he has the power to implement them and that he certainly does not.

        • keeptalkinggreece

          he may thinks he can do it

          • Obviously, Dijsselbloem himself cannot impose capital controls in Greece. He plays a key role, though, in one of the links of a potential chain reaction:

            – The group of EZ finance ministers (which Dijsselbloem heads) has to approve the agreement.

            -> If the EZ finance ministers do not approve the agreement, sooner rather than later the Greek government will default on its debts. (If Greece could continue to make payments until the debt is reduced to a manageable amount, we would not be having this whole hoopla).

            -> Once the Greek government defaults (if not sooner), ECB will not be allowed to accept Greek bonds as collateral from the Greek commercial banks and will stop supporting them through the emergency liquidity assistance (ELA).

            -> Once ELA stops, the Greek commercial banks will no longer be solvent and depositors would not be able to get their money out.

            Nationalizing the commercial banks and capital controls seem to be very logical steps the Greek government will have to take to prevent the complete chaos (or at least slow down its advent). Having said that, I am not even sure capital controls will be very effective for Greece. Unlike Cyprus, Greece has long and porous borders to prevent bags of cash being moved out of the country.

          • Surely it was corrupt Draghula and not the corrupt dutch pip-squeak

          • Giaourti Giaourtaki

            But Draghula was serious, never played shell game with draft papers to trick Varf’s name onto it.

  2. If Greece pays the IMF tomorrow it will be a HUGE mistake

  3. Dijsselbloem is mentioned as the one making the threats. Plausible.
    Dijsselbloem btw. can stay “Mr. Euro” for another 2 years. That has been approved. Surely after he expediently transferred extra contribution from the NL to the EU because of favorable economic figures (some 1.3 billion Euro in extra contribution; NL already per capita the biggest contributor to the EU). The expedient payment secured him another two years.

    He and the government he is member of in NL refuse to give accountability over the process of paying these contributions. Under Dutch law on open governance, several attempts have been made but so far only blackened out transcripts of the communications regarding that process have been given. Also several opposition members in parliament asked for openness but every time the motions were rejected by the MPs of the governing parties supported by some other MPs, having a narrow majority. Some Dutch MEP now tries to get openness at the EU level.

    It is all cloaked in secrecy. Also he called for a meeting in the Dutch parliament regarding banking unification in the EU. On the condition that the content of that meeting stays secret. And no transcripts of that meeting will be made….Dijsselbloem has things to hide.