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Varoufakis will play a limited role in the talks with the creditors

27 April 2015 / 17:04:29  GRReporter
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In response to his negative performance and the harsh criticism towards him at the Eurogroup meeting in Riga last week the Greek government has limited the involvement of Minister of Finance Yanis Varoufakis in the talks with the creditors.

In particular, the government has reformed the negotiating group, calling it "a political negotiation team." Deputy Minister for International Economic Relations Efklidis Tsakalotos will coordinate it and Yanis Varoufakis will be in charge of its functioning.

At the same time George Houliarakis, a close collaborator to Deputy Prime Minister Yiannis Dragasakis who is also a coordinator of the government’s economic policies, will be responsible for the negotiations with the advisory teams of the Brussels group (the former supervisory Troika). According to publications in the Greek media, the relations between Varoufakis and Houliarakis were not good, so his participation in the negotiating group was limited at least since the beginning of March until today.

According to the government sources, the decisions on the changes were taken at a meeting held on Sunday under the leadership of Prime Minister Alexis Tsipras. The same sources indicate that it "confirmed the confidence in Minister of Finance Yanis Varoufakis who was at the centre of regular attacks by the international press." "Minister of Finance Yanis Varoufakis always acts within the context of the collective decisions and the executive government bodies. He will continue to work towards a sustainable solution in the same way," they point out.

The Greek media comment that this is the first of a series of actions undertaken by the government in order to overcome the impasse in the negotiations and to reach an agreement with the creditors by 11 May.

According to sources, the Greek cabinet is considering the following proposals:

- postponing the planned changes in labour law to June or later

- taking measures to limit early retirement

- reducing the high additional pensions

- imposing a special "luxury" tax on accommodation in the tourism sector instead of increasing VAT on the islands

- proposing to use part of the proceeds from privatizations for the payment of the foreign debt and the financing of the pension system.

The pressure on the Greek government due to the lack of resources is great, which is confirmed at the highest level as well. In an interview with the Sunday edition of the pro-government newspaper Avgi Deputy Prime Minister Yiannis Dragasakis implied that if liquidity in the country remained at the same low level the government might be forced not to pay any money to the creditors in order to pay the salaries and pensions inside the country. "This situation cannot continue. It creates conditions for recession and society cannot bear more recession, more unemployment, more austerity. Because if this happened it might imply the taking of such measures that, until now, we have been struggling to avoid," was his statement, which is interpreted as a harbinger that the government is preparing for a "bitter" consensus with the creditors.

New head of the negotiation team of the Greek government Efklidis Tsakalotos was born in Rotterdam in 1960. He is a graduate of Eton College and has a degree in economics and political science from the University of Sussex and the University of Oxford. He was a lecturer at the British University of Kent and the Economic University of Athens. Since 2010 he has been a professor of finance at the University of Athens.
Efklidis Tsakalotos comes from a famous Athenian family, whose roots are in Preveza in Western Greece. His grandfather’s brother Trasivoulos Tsakalotos was an officer of the Greek army during World War II and the Civil War in Greece.

In SYRIZA he is known as the "left aristocrat", a byname that he was given after the disclosure of tax returns of deputies in 2013. The documents made it clear that Efklidis Tsakalotos had invested large sums in hedge funds such as BlackRock and JP Morgan. In response to the relevant attacks, he said that his father had made the investments and he himself was just a co-beneficiary. He is married to his student love Denise Gibson, who is also an economist and director of the research department of the Bank of Greece.


Tags: PoliticsNegotiatinsCreditorsYanis VaroufakisEfklidis Tsakalotos
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