World Economy

Greece Clips Varoufakis’ Wings

Greece Clips Varoufakis’ WingsGreece Clips Varoufakis’ Wings

Greece reshuffled its bailout-negotiating team, reining in Finance Minister Yanis Varoufakis, after three months of talks with creditors failed to unlock aid and a meeting with his euro-area counterparts ended in acrimony.

The coordination of day-to-day efforts to strike a deal with creditors was handed to Deputy Foreign Minister Euclid Tsakalotos, a Greek government official said in an e-mail to reporters Monday. Varoufakis’s role will be limited to supervising the political negotiations with euro-area member states and the International Monetary Fund, Bloomberg reported. A Eurogroup meeting in Riga, Latvia on Friday descended into name-calling as the currency bloc’s finance ministers hurled abuse at Varoufakis, accusing him of being a time-waster and an amateur. Still, the 54-year-old academic-turned-politician in the government of Prime Minister Alexis Tsipras remains popular at home.

The change comes as Greece struggles to amass cash to pay its pensioners and employees this week. Europe’s most-indebted state is counting on deposits of local governments, cities and other funds to meet end-of-month payments of over 1.5 billion euro ($1.62 billion) after euro-area finance ministers on Friday said they won’t disburse more aid until bailout terms are met. State coffers will be further strained on May 6, when Greece needs to find 200 million euro for an IMF payment.

Under the reshuffle, George Chouliarakis, Greece’s representative at the Euro Working Group of finance ministry officials, will be responsible for the so-called Brussels Group meetings between Greek technocrats and representatives of creditor institutions. After “wasting three months” and drying up liquidity in the economy since the elections, the prime minister is “emasculating” Varoufakis, opposition party Pasok said in a statement.

The move is sending a signal its creditors that Greece wants an agreement, according to Pasok.