Varoufakis rides into the sunset. Will it help Europe and Greece?

The resignation of Greece's finance minister after Sunday's referendum could be a balm to European officials, who were highly annoyed by his abrasive ways. But the gap between Athens and Brussels still looms large. 

Petros Karadjias/AP
Outgoing Greek Finance Minister Yanis Varoufakis tries to leave on his motorcycle surrounded by media, after his resignation in Athens, Monday.

Greece’s Finance Minister Yanis Varoufakis, who made European leaders bristle with his lengthy lectures on economic theory, had promised to resign if Greece voted “yes” to accept Europe's terms for a bailout extension. 

Greeks overwhelmingly voted “no.” But Mr. Varoufakis stepped down anyway. With typical flair, he said in a resignation statement this morning that he “shall wear the creditors’ loathing with pride.”

While his departure added to a week of high-stakes drama that puts Greece and Europe into uncharted waters, will it make a difference?

His departure was clearly intended to show Greek Prime Minister Alexis Tsipras’s good faith to win a new bailout agreement from Europe, after Greece defaulted on a loan from the International Monetary Fund last Tuesday. Such a gesture is vital for Greece, as it faces financial collapse without more aid.

But it seems unlikely to clear the air sufficiently to regain the trust of European leaders, who viewed the snap referendum as a sucker punch in the first place. Even with Varoufakis gone from the negotiating room, the bridge between both sides has, as one German politician put it, been “torn down.”

“Varoufakis has become a symbol of the ... ideologically-driven approach that the Greek government has brought to the table. So in terms of symbolism and atmosphere [his resignation] might help,” says Jan Techau, the director of Carnegie Europe in Brussels. “But on substance not very much. Tsipras believes in this path forward. [Varoufakis’ resignation] won’t take most of the edge out there.”

Greek defiance

Defying pollsters' predictions of a "yes" vote, a clear majority of Greeks sided with Syriza's intransigence in bailout talks. Sixty-one percent cast "no" votes Sunday, showing their disdain for creditors who had refused to loosen the austerity measures that are blamed for failing to pull Greece out of what's been called its Great Depression. 

Hubris is running high in Athens, capped by Varoufakis’s resignation Monday morning. He called the referendum a moment in history when “a small European nation rose up against debt-bondage.”

Those words resonated in Athens, where a sense of pride propelled many to vote “no,” even though the consequences are far from clear. “I chose not to be the guinea pig anymore of European officials,” says Maria Voreakou, an unemployed college graduate whose entire family lives off her grandmother’s pension.

With Varoufakis’s departure, Greeks are hopeful that the promise of Tsipras – that a “no” vote strengthens his hand in negotiations for a new bailout deal and that Greece would remain in the euro – can be realized. Giannis Metaxas, a political analyst at the University of Athens, says that Tsipras must move quickly to score a better deal. “With 61 percent, you grab the opportunity,” he says, “and this will be a victory for all of us."

But it’s unclear that leaders outside of Greece see it this way. The referendum has garnered accolades in some corners of Europe, especially from leftists in southern Europe – as well as anti-EU parties across Europe. France, which has criticized Germany for its insistence on austerity over growth, has also shown more compassion towards Greece.

German impatience

Elsewhere in Europe, mistrust is at new highs after Sunday's referendum, particularly in Germany, whose opinion counts the most. And small eastern European and Baltic countries that carried out their own painful economic reforms remain impatient with Greece not doing the same. 

“Nothing will be easier,” says François Lafond, the director of EuropaNova, a think tank in Paris. “Germany will not accept a deal more easily because Greeks voted in favor of Tsipras.”

Today German Chancellor Angela Merkel is meeting her French counterpart François Hollande in Paris ahead of a Europe-wide meeting called for Tuesday. Merkel and Tsipras talked via phone today, and a Greek official told reporters that the Syriza government would offer yet another bailout proposal at Tuesday's summit. 

So far, leaders have given little sign that they plan to accommodate Greece given the results. Dutch finance minister and Eurogroup chief Jeroen Dijsselbloem said the referendum brings Athens "no closer to a solution" on its financial problems.

German Vice-Chancellor Sigmar Gabriel told the Tagesspiegel daily that Tsipras had "torn down the last bridges on which Greece and Europe could have moved towards a compromise,” he 

Germans have increasingly lost patience with Greece, especially in the past five months of brinkmanship with Syriza. "Back in 2010, when the Greek crisis was beginning, public opinion toward Greece was actually relatively positive," says Peter Matuschek from the German pollster Forsa. "Now we have, especially in recent weeks, a majority of Germans that want to see Greece leave the eurozone."

Today commentaries in Germany were scathing. “No, a spark of hope for Greece is nowhere to be seen, even as supporters of Syriza celebrate after the referendum. At best, it's the light of delusion which shines so dazzlingly. In a few days, people in Athens will notice how gloomy things are in the country," wrote the daily Süddeutsche Zeitung. Greece has reached the end of the road when it comes to the euro.”

Jumping ship?

Helena Theodorou, who is studying psychology in Athens, says that she believes Greece will ultimately be better off outside the eurozone. “Don’t forget that independent does not mean necessarily alone,” she says.

But many other Greeks worry that Tsipras’s goal to keep Greece in the eurozone – as 75 percent have said they want – but with more concessions, is impossible. 

Dimitrios Kikareas, a pensioner, says he voted “yes” because, even if he doesn’t agree with the hardship that bailout deals have brought Greece, at least it keeps the country firmly in the eurozone. “I voted ‘yes’ because with a ‘no’ who is to say that the alternative wouldn’t be worse?”

Mr. Lafond, the expert in Paris, sees Varoufakis’s departure not as an act of political enlightenment, but of jumping ship after making promises Syriza can’t keep.

“He is clever,” he says.

Chris Cottrell contributed to this report from Berlin.

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