Yanis Varoufakis, a veteran of the 2015 Greek debt crisis, accused Eurozone finance ministers of “failing Europeans” after a 15-hour row over a post-coronavirus rescue package ended in stalemate. The rebel economist said he was the victim of similar bullying at the height of Greece’s financial crisis when his defiant strategy against debt negotiations with European leaders led to banks being closed and queues at cash machines. “The Eurogroup, again, failed Europeans,” he wrote on social media, after their overnight meeting eventually broke up.
“The Italian finance minister, during the night, was bullied to surrender – as I was in 2015. It was all done behind closed doors and with no minutes kept.”
Mario Centeno, the Eurogroup’s president, called time on the marathon talks this morning after it emerged warring ministers would not sign up to a compromise deal.
Italy and the Netherlands are urged to drop their red lines to allow the bloc to eventually forge a common response coronavirus crisis.
One Brussels source said the atmosphere between member states had become “very toxic” because of the difference in positions between richer northern member states and their poorer southern neighbours.
They added: “It’s a matter of principle and perspective, and that’s never good for compromise.”
Cash-stricken Italy, with the support of Spain, France and six others, are pushing for the EU to agree a mechanism to share the debt burden of the post-coronavirus economic recovery across the bloc.
They claim failure to prop up the high-debt countries risks a new Eurozone sovereign debt crisis that could endanger the currency.
There is a growing panic amongst the group that Italy, Spain and France’s response to the global pandemic could see their economies sunk by the debt costs in the future.
French finance minister Bruno Le Maire said: “Nothing would be worse for Europe than for some states, because they are richer, to get off to a quick start, while others, because they cannot afford it, start slowly.
“We all need to recover at the same speed in order to guarantee the cohesion, solidarity and unity of the eurozone and our common currency.
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Whereas the Netherlands wants to ensure any join debt is issued with a series of preconditions, such as EU investigations into government accounts or prior commitments to spending cuts and structural reforms.
Eurozone finance ministers will hold talks once again on Thursday before making proposals to EU leaders on new rescue package plans.
Dutch finance minister Wopke Hoekstra declared it “too early to agree a total package”, insisting the Netherlands is still adamant that any joint debt mechanism proposals to aid recovery must be scrapped.
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He said: “We think this will create more problems than solutions for the EU.
“We would have to guarantee debts of other countries which isn’t reasonable.
“The majority of the Eurogroup shares this view and does not support Eurobonds.”
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