Varoufakis Chided as EU Shuts Down Shortcut Bid for Aid

by Ian WishartCorina RuheKarl Stagno Navarra

12:52 PM EEST

April 24, 2015

Euro-area finance ministers hurled abuse at Greek Finance Minister Yanis Varoufakis behind closed doors as they shut down his bid to find a shortcut to releasing financial aid.

Jeroen Dijsselbloem, the Dutch chairman of the euro-zone finance chiefs’ group, categorically ruled out making a partial aid payment in exchange for a narrower program of reforms after a stormy meeting in Riga, Latvia, in which Varoufakis was heavily criticized by his euro-area colleagues over his failure to deliver economic reforms.

Euro-area finance chiefs said Varoufakis’s handling of the talks was irresponsible and accused him of being a time-waster, a gambler and an amateur, a person familiar with the conversations said, asking not to be named because the discussions were private.

“It was a very critical discussion and it showed a great sense of urgency around the room,” Dijsselbloem said at a press conference after the meeting. Asked if there was any chance of a partial disbursement, he said, “The answer can be very short: No.”

Varoufakis said the two sides have come “much closer together” and Greece is aiming for a deal as soon as possible.

Draghi Pressure

European Central Bank President Mario Draghi added to the pressure on the Greek finance chief warning that policy makers may review the conditions of the emergency funding keeping his country’s banks afloat.

Euro-area governors will “carefully monitor” the haircuts imposed on Greek banks’ collateral when borrowing from the Bank of Greece, Draghi said, to take into account the “change in the environment.”

“The higher are the yields, the bigger is the volatility, the more collateral gets destroyed,” he said. “Time is running out as the president of the Eurogroup said, and speed is of the essence.”

The euro erased an advance against the dollar on the remarks. The single currency had gained earlier after Kathimerini newspaper reported that Greece secured 450 million euros ($489 million) from local authorities to boost government coffers.

The euro was little changed at $1.0826 at 11:22 a.m. in London after gaining as much as 0.7 percent. The common currency was at 129.32 yen after reaching 130.11 yen earlier on Friday.

The 19-nation bloc’s finance ministers were riled after Greek Prime Minister Alexis Tsipras’s tried to bypass their veto on financial aid with an appeal to Angela Merkel on Thursday. Tsipras sought to circumvent the finance ministers’ authority, pleading his case with the German Chancellor and French President Francois Hollande on the sidelines of a summit on immigration in Brussels.

Under euro-area procedures, it’s the finance ministers who have to sign off on any aid disbursement and Merkel said last month she’s not prepared to override those controls.

“I would describe today’s meeting as a complete breakdown in communication with Greece,” Maltese Finance Minister Edward Scicluna said.