Feb 172015
 
 February 17, 2015  Posted by at 12:54 pm Finance Tagged with: , , , , ,


NPC Storm of July 30, 1913, Washington DC 1913

So what happened there yesterday? What we know is that European Economic Affairs Commissioner Pierre Moscovici delivered a communiqué, ostensibly coming from European Commission President Jean-Claude Juncker – he at least knew of it – to Greek finance minister Yanis Varoufakis, who later called it ‘splendid’ and said his government had been’ happy’ with it and he had been ready to sign.

The European Commission, the day to day ‘directors’ of the EU, offered Greece four to six months of credit in return for a freeze on its anti-austerity policies. Still quite a sacrifice for Greece to make, it would seem, but they would have signed regardless.

But then, we are told, the eurozone finance ministers threw out the document and Eurogroup head Dijsselbloem presented Varoufakis with a completely different one, which he knew was unacceptable to Greece: an extension of the Troika bailout deal they had already thrown out. A Greek source told Reuters: “..carrying out the bailout programme was off the table at the summit. Those who bring this back are wasting their time.”

I’m wondering who exactly decided to throw that first proposal from the EC out. Did Dijsselbloem have enough time to confer in-depth with all 18 finance ministers, or did he make the decision more or less by himself? It’s a curious thing to do, for a eurozone commission to dismiss the de facto head of the EU in such a way. If the finance ministers had determined it was a no-go beforehand, there would have been no point in presenting it to Varoufakis. So why was he given it?

After the meeting, Moscovici called on the eurozone finance ministers to be “logical, not ideological”. That still sounds polite, and it’s hard to gauge what relations are between the various EU representatives, but it’s obvious they don’t present a united front. There is trouble brewing. And that probably means Juncker and Moscovici don’t agree with the Eurogroup stance, and certainly don’t want to risk Greece leaving the eurozone or even the EU.

We may well hear more from the European Commission before this is over. It’s no secret that Juncker is not pleased with the fact that Angela Merkel trumps him at every significant turn, and he may want to use the Greek situation to rearrange Europe’s musical chairs. I’d like to see Yanis Varoufakis explain what happened, but I think he unfortunately won’t be able to as long as negotiations are ongoing.

For now, Juncker has been pushed back a few spots, and seems to rank behind even Dijsselbloem in the decision tree. He’s not going to like that idea. This rift within Europe, this inside power struggle, looks set to widen as we go forward. For Greece, that may be just what they need. You better believe Varoufakis took note.

Home Forums Europe’s Political Great Rift Valley

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