Greece's finance minister quits to give reconciliation with EU a chance

06 July 2015

Greece's finance minister Yanis Varoufakis resigned in the wake of a ''no'' vote on European demands for austerity, giving reconciliation between Athens and Brussels a chance and removing a major hurdle to any deal to keep Athens in the euro zone.

Yanis Varoufakis, who annoyed euro zone leaders with his Marxist philosophy and influenced voters by his campaigning against creditor terrorism, will now let Prime Minister Tsipras do soft peddling.

"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," Varoufakis said in a statement.

The resignation of Varoufakis, who had promised the Greek a better deal once the government won Sunday's vote, suggest that a deal with creditors could still be clinched.

Perhaps Prime Minister Alexis Tsipras is determined to try to reach a last-ditch compromise with European leaders.

Greece's chief negotiator in aid talks with international creditors, Euclid Tsakalotos, is reported to be the frontrunner to become finance minister. Tsakalotos had already taken over a prominent role with lenders after Varoufakis was sidelined from the talks in April.

Varoufakis had particularly been the weak link in Greece's relations with major European donors, including Germany, Greece's biggest creditor and the EU's biggest economy, where public opinion has hardened in favour of cutting Greece loose from the euro.

Many in the EU now also feel that a deal with Athens would be easier with Varoufakis gone.

To win any new deal, Greece will have to overcome the distrust of partners, above all Germany.

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