Home > Uncategorized > A Greek conspiracy: How the ECB crushed Varoufakis’ plans

A Greek conspiracy: How the ECB crushed Varoufakis’ plans

from Norbert Häring

A central bank governor in Athens conspires with the President of the Republic to sabotage the negotiation strategy of his government to weaken it in its negotiations with the European Central Bank. After the government has capitulated, this governor, who is a close friend of the new finance minister and boss of the finance ministers wife, and the President of the Republic travel together to the ECB to collect their praise and rewards. This is not an invention, this is now documented.

On 19 January the German Central Bank in Frankfurt informed the media that the Greek President Prokopis Pavlopoulos visited the ECB and met with ECB-President Mario Draghi, and that he was accompanied by the President of the Greek central Bank, Yanis Stournaras.

Remember. When the Syriza-led government in Athens was in tense negotiations with the European institutions, the ECB excerted pressure by cutting Greek banks off the regular financing operations with the ECB. They could get euros only via Emergency Liquidty Assistance from the Greek central bank and the ECB placed a strict limit on these. Finance minister Yanis Varoufakis worked on emergency plans to keep the payment system going in case the ECB would cut off the euro supply completely.

It has already been reported and discussed that a close aide of Stournaras sabotaged the government during this time by sending a memo to a financial journalist, which was very critical with the governments negotiation tactics and blamed it for the troubles of the banks, which the ECB had intensified, if not provoked.

A few days ago, Stournaras himself exposed a conspiracy. He bragged that he had convened former prime ministers and talked to the President of the Republic to raise a wall blocking Varoufakis’ emergency plan.

In retrospect it looks as if Alexis Tsipras might have signed his capitulation to Stournaras and the ECB already in April 2015, when he replaced Varoufakis as chief negotiator by Euklid Tsakalotos, who would later become finance minister after Varoufakis resigned. In this case the nightly negotiating marathon in July, after which Tsipras publicly signed his capitulation, might just have been a show to demonstrate that he fought bravely to the end.

Why would I suspect that? Because I learned in a Handelsblatt-Interview with Tsakalotos published on 15 January 2016 that he is a close friend of Stournaras. Looking around a bit more, I learned that Tsakalotos wife is “Director Advisor” to the Bank of Greece.

This is the Wikipedia entry:

„Heather Denise Gibson (Greek: Χέδερ Ντενίζ Γκίμπσον; born in Glasgow) is a Scottish economist currently serving as Director-Advisor to the Bank of Greece (since 2011). She is the spouse of Euclid Tsakalotos, current Greek Minister of Finance.”

At the time she entered, Stournaras was serving as Director General of a think tank of the Bank of Greece.

The friendship of the trio goes back decades to their time together at a British university. They even wrote a book together in 1992. (Heather D. Gibson, Yannis Stournaras, Euclid Tsakalotos: The Real and Financial Sectors in Southern Europe: Catch-up, Convergence and Financial Institutions, University of Kent, Canterbury 1992.)

Thus: The former chief negotiator of the Greek government is and was a close friend of the central bank governor and the central bank governor was the boss of his wife. The governor of the Bank of Greece, which is part of the Eurosystem of central banks, gets his orders from the ECB, i.e. the opposing side in the negotiations. He actively sabotaged the negotiation strategy of his government.

If this does not look like an inappropriate association for a chief negotiator, I don’t know, what would.

  1. graccibros
    January 22, 2016 at 6:17 pm

    Many, many thanks for this. Reminds me of Hillary Clinton’s attack on Bernie Sanders in the last debate for his one pro Wall Street vote in 2000 to de-regulate derivatives. No reporter has pressed her on her friendship with regulator Brooksley Born, forced out for trying to regulate derivatives, intimidated and worse by Bill Clinton’s Committee to Save the World and Gary Gensler’s role, who facilitated the Democratic alliance with the likes of conservative Senator Phil Gramm, then took Brooksley Born’s job at the CFTC under Obama and now is advising the Hillary Clinton campaign. Robert Scheer has called Clinton on the outrageousness of her charge against Sanders, which, while literally true on the vote, obscures the hypocrisy if not betrayal of the public trust in exempting derivatives from gov’t oversight in 2000.

    So I’m ready to read anything about what happened in Greece when the stakes were even higher.

  2. January 22, 2016 at 11:15 pm

    There is a need for caution here. One important bargaining chip never played was a boycott of additional credit. This hamstrung democratic evolution by tying it to corporatist financial snake oil.

    We know that Greece runs a huge military budget. And we know that Turkey flies five to ten daily probes into Greek air space.

    We also know that Russia owes its existence to Greece.

    The power behind Yanis Varufakis was democratic evolution of ordinary people. We the people are ten times smarter than we thought we were when the year started.


    • elenits
      January 24, 2016 at 10:17 am

      Greece’s “huge” military budget is the required 2% by NATO. It is the only EU country that meets NATO’s target, worth keeping in mind when making judgements. The country itself prioritizes the military because of Turkey. On the other hand no Greek, and particularly not the military, appreciates the fantastic wastage on mismatched arms and nonfunctional submarines (fully paid for and still not delivered 10 years on) that benefits private sector arms dealers and political & civilian middlemen. However this is a matter of EU politics, as were the bailout loans to Greece each of which has been conditioned on buying billions of new French and German arms over the protests of the Greek military. FYI.

  3. January 23, 2016 at 4:45 am

    Making public once again the details of Brooksley Born’s actions and what happened to here is always, I believe a good thing. As is once again making public the complicity of former Senator Gramm in the unraveling of the American economy through the derivatives policies he helped put in place and then lied to the American people about their purposes and effects. As to Greece I have no particular attachment to the nation-state organizational form for the world. But I am concerned about the undermining of democratic governance in whatever organizational form it may be vested. Bottom line (pun intended) is this: democratic governance and capitalism (particularly the neoliberal version) are not compatible and cannot be made compatible. They cannot coexist, peacefully or any other way. So there you have it. A choice must be made. We can’t have them both.

  4. January 24, 2016 at 7:33 am

    That Stournaras and Tsakalotos are old, personal friends is common knowledge. It is also common knowledge that they have diverged politically/ideologically for decades. Basing one’s claim on the sheer existence of their friendship and prior academic collaboration, whilst adding the misleading notion that Stournaras is ‘the boss’ of Tsakalotos’ wife (it may very well be true that, in reality, the relationship between the two is THAT hierarchical, one of complete dependence on Tsakalotos’ wife on Stournaras’ good graces) — this is not quite a for-profit corporation and she does not exactly work ‘at the pleasure’ of Stournaras – is, at best, speculative.

    • elenits
      January 24, 2016 at 10:24 am

      grkstav, I don’t agree. These factors alone should have caused Tsakalotos to refuse the Finance ministry position. Or his wife should have resigned and publicly stated why. But perhaps ethics are considered too old fashioned now, in a context where corruption rules openly and laws and constitutions have been thrown out of the window.

    • St.domestihus
      January 25, 2016 at 6:01 pm

      Well I don’t know . Varoufakis was very close with Chakalotos . It is aufful, if all this is true . Being that V’s wife is uncovering it . Leave it to a dedicated wife , she can save a country !

  5. St. Domestihus
    January 25, 2016 at 5:46 pm

    I feel very sick!

  6. St. Domestihus
    January 30, 2016 at 3:27 pm

    How all this was not known before ? It is most alarming. We are so deep in a mess it is descuraging. I feel auffuly angry .

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