So the Greeks have voted “No” to more austerity and the first “casualty” is Varoufakis the Finance Minister. I have always found game theory very confusing and no doubt he feels the same way this morning! On his blog site http://yanisvaroufakis.eu/ he said this
“Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that 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 and I shall wear the creditors’ loathing with pride.”
In other words he’s been sacked, but he has helped the majority of Greeks to come to the rational decision that current Troika policies will get Greece and the rest of the eurozone absolutely nowhere. Dijisselbloem the EU Finance Minister said that this was a regrettable for the future of Greece; he meant to say regrettable for the future of the euro but then as an unelected member of the Troika gang along with Juncker and Draghi he will in all probability ignore the referendum outcome and carry on with business as usual ie inflicting as much pain on the Greeks as possible pour encourager les autres.
Already this morning Le Pen in France and the Italian Finance Minister have suggested that the whole euro project needs re-evaluating which must be causing ructions in Brussels am Berlin. The Chinese have subtly got in on the act too. Deputy Chinese Foreign Minister Cheng Guoping’s statement to journalists last night, following the OXI victory, “I believe the Greek economy will turn round, and the economic crisis will be appropriately handled. Whether or not it can be appropriately handled will not only have an important impact on Greece and its people, but will have an important impact on the world too”. The Russians have been strangely silent but Putin still has Ukraine to deal with and although he enjoys a good punch up he may not want to upset the EU over much right now. The US State department will also be having conniptions at the thought of the Russian fleet in the eastern Med and Greece in the Asian Investment Bank let alone the fall out if/when the next domino falls. Faite vos jeux! Spain? Portugal? Italy? France??!
There are a number of meetings scheduled this week and we expect the markets to remain in a state of flux. The knee jerk reactions overnight on the futures exchange, in currency and equity markets, have been tempered this morning, but we are not tempted to catch any falling knives while this next chapter in the over running euro saga plays out.