Bank of Greece (BoG) Gov. Yannis Stournaras launched into a stinging attack on former Greek finance minister Yanis Varoufakis on Thursday evening, saying the flamboyant ex-minister’s “brave” negotiations with creditors last year cost an already crisis-battered Greece an additional 86 billion euros.
Stournaras, himself a former finance minister but in the previous center-right government, said Varoufakis’ negotiations from the end of January 2015 to the end of June 2015 resulted in the third memorandum and capital controls imposed after 45 billion euros of deposit outflows, adding that these (CC) were imposed to protect the financial sector’s stability in the wake of the “brave negotiations.”
The Greek central banker made the statements at an event organized by the Hellenic Observatory of the London School of Economics, and after an earlier speaker, former Varoufakis associate Nikos Theocarakis, described the government where Stournaras held the finance portfolio are almost “colonial” in nature. Theoharakis served as finance ministry general secretary of fiscal policy for the five months Varoufakis was minister.
In an uncharacteristically curt response by the usually mild-mannered Stournaras, the latter said Varoufakis and his associate, Theocarakis, merely achieved a change in the name “troika” to the “institutions”, and to shift meetings with lenders’ representatives from ministries to the Athens Hilton.
His entire quote, as posted by the Bank of Greece, read:
“And I am really very sorry to notice tonight that Nikos Theocarakis’ speech before mine was such an example of partisan politics, since I used to be a Finance minister in the government that he described as almost colonial in his partisan speech. He failed though to admit that the “brave” negotiations that he and Yanis Varoufakis led, which led to the change of the name of the Troika to institutions and removed the Troika from the ministries to the Hilton, had also a cost.
“If we assume that what he described were benefits, the cost of course was €86 billion: That was the third memorandum and the capital controls that have been imposed after €45 billion of deposit outflows. And these capital controls have been imposed in order to safeguard financial stability following the “brave” negotiations of Mr. Theocarakis and Mr. Varoufakis. I am sorry to say that, but I had the obligation to put the record straight.”
Beyond his criticism of the mercurial Varoufakis’ tenure in the leftist SYRIZA government, Stournaras the BoG’s reports during the crisis aimed to boost its presence in the public debate and to increase its interventions and warnings over “significant risks, which despite the fact that they were at our doorstep, had not been recognized by the majority of the public and were ignored by the governments…”
