Greek FM Varoufakis resigns in shock announcement to 'smooth path to new aid deal'

Greek Finance Minister Yanis Varoufakis gives a press conference in Athens on July 5, 2015.
Greek Finance Minister Yanis Varoufakis gives a press conference in Athens on July 5, 2015. PHOTO: AFP

ATHENS (REUTERS, AFP) Greek Finance Minister Yanis Varoufakis, whose forceful denunciations of creditors alienated many of his euro zone colleagues, resigned on Monday, saying Prime Minister Alexis Tsipras believed it would help smooth the path to a new aid deal.

 

His resignation comes after Greeks delivered a resounding'No' to the conditions of a rescue package with international creditors, casting the country into uncharted waters and a possible exit from Europe's common currency.

With relations already frosty, Varoufakis infuriated Greece's European partners last week when he accused creditors of using "terrorism" against the Greek people to intimidate them into accepting more austerity.

In a statement on his blog after announcing the news on Twitter, Varoufakis said he had been "made aware" that some members of the euro zone considered him unwelcome at meetings of finance ministers, "an idea the prime minister judged to be potentially helpful to him in reaching an agreement".

"For this reason I am leaving the ministry of finance today." "I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday's referendum," Varoufakis said.

He warned that the referendum result - which saw over 60 per cent of Greeks vote to reject the austerity measures demanded by its international creditors - "comes with a large price tag attached... like all struggles for democratic rights".

"The great capital bestowed upon our government" must be "invested immediately into a YES to a proper resolution," he said, calling for a deal that involves "debt restructuring, less austerity, redistribution in favour of the needy, and real reforms."

Outspoken and flamboyant Varoufakis, who has sent tremors through the Eurogroup since his appointment in January with his refusal to bow to convention, said: "I shall wear the creditors' loathing with pride".