Greece ‘s unconventional new Finance Minister Yanis Varoufakis is turning moderate as negotiations with the country’s international lenders approach, says a New York Times article. Varoufakis has made controversial statements regarding the Greek bailout program, calling it a “toxic mistake,” or describing the imposed austerity measures as “fiscal waterboarding.” However, his stance is changing as Greece’s creditors are about to review the progress of the bailout program and debt renegotiation is due. After an Athens stock market plunge when the new Greek cabinet was announced, political and financial analysts predict a direct confrontation between Greece’s leftist administration and the European partners and the International Monetary Fund. During an interview for The New York Times on Thursday, Varoufakis played down the possibility of a head-on collision. “People have described this as a Wild West showdown,” he said, “but it is not a ‘yes or no, take it or leave it’ situation.” He said Greece wanted to negotiate with its creditors and insisted that Greece is not seeking a confrontation with creditors, whether in Frankfurt, Brussels or on Wall Street. “All we’re asking is for is an opportunity to put together a proposal that will minimize the costs of Greece’s loan agreement and give this country a chance to breathe again after policies that created massive social depravity.” With a 7.2 billion euro tranche remaining for Greece’s bailout on the existing agreement, the country needs the funds to pay its dues. However, Varoufakis said, “we don’t want the 7 billion euros.” “We want to sit down and rethink the whole program,” he added. “Our task is not to get the next loan tranche,” which he described as “kicking the can down the road.” He said that what Greece really needs is restructuring the debt and the economy. Varoufakis suggested that Greece could finance its obligations by reducing the target for the primary surplus, the amount of cash in Greece’s coffers after expenses and interest payments. So far creditors are demanding that Greece run a primary surplus of 4.5 percent of GDP. Varoufakis said Athens would propose to hold the level to 1 percent to 1.5 percent of GDP. Greece is also counting on creditors to write off part of the debt, something that would free up funds. Much of the rest of Greece’s total debt of 318 billion euros is in the form of loans from other European Union governments, which do not want write-downs that would burden their taxpayers. Varoufakis wants to discuss with other finance ministers to find ways to reduce that burden and Greece will soon have proposals. What Greece needs to get out of the debt is growth Varoufakis said, but growth needs to be addressed first at a Pan-European level. What he suggested was a “New Deal” type of investment-led recovery program around Europe. Varoufakis played down concerns about the safety of Greek banks and the Athens stock market plunge: “Once the markets see that the proposals coming from this government are sensible, cooperative and therapeutic, we anticipate that share prices are going to recover.” He added that Greece is not halting privatizations, despite remarks on Wednesday from another minister suggesting that this was the case. He said that the country wants to attract foreign investors and exploit state assets without resorting to “a fire sale or selling the family silver.” Finally, he reassured Greece’s partners that the country will not go back to the old ways after it recovers “because we don’t want to do it ourselves.”
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