Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

Varoufakis struck a more conciliatory tone, insisting on Syriza’s European credentials and its commitment to work in good faith. He insisted that they were not “populists, promising all things to all people.” But Schäuble’s response was blunt. Syriza had not been part of the 2012 deal with the Greek political parties. But Varoufakis needed to understand, as far as the fundamentals of the eurozone were concerned, that “elections cannot be allowed to change economic policy.”32 It was an astonishing statement on its face, but one that encapsulated the dilemma in which the eurozone found itself. As a result of the crisis, national economic policy was increasingly a matter of international agreements. As far as the Eurogroup was concerned, the Greek debt memorandum was the road map. Whatever the complexion of its national government, Greece was expected to stick to it. Though form was preserved, tempers frayed and there were rumors that Varoufakis and Dijsselbloem had almost come to blows.33 Schäuble would no doubt have been happy to see Greece thrown out there and then. But a personal intervention by Merkel on February 20 secured a stay of execution, allowing the new Greek government, with the approval of the creditors, to offer its own list of reform proposals to replace the memorandum.34 The release of the outstanding 7.2 billion euros was postponed until agreement was reached and the reforms were implemented.