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Varoufakis slams 'new Versailles' Greek bailout

TAGS: Euro, Economy, Politics

Former finance minister Yanis Varoufakis told parliament on Wednesday Greece's rescue deal was like the Versailles treaty which forced crushing reparations on Germany after World War One and led to the rise of Adolf Hitler.

Varoufakis, whose fiery language alienated many of his eurozone colleagues during five months of negotiations, resigned after Greeks rejected bailout terms in a July 5 referendum in order to facilitate talks. A deal was reached one week later.

"' 'The powerful demanded that the losers accept terms they had no right to demand. The losers accepted commitments they had no right to accept'. These were the words of John Maynard Keynes on the Versailles Treaty. What we are confronted with is a new Versailles Treaty," the self-avowed "erratic Marxist" told fellow lawmakers ahead of a vote on the rescue deal.

He did not say if he would vote against it or if he would even attend the key vote expected after midnight - last week he skipped a vote on giving Prime Minister Alexis Tsipras a mandate to negotiate a deal.

Leather jacket-clad, motorbike-riding Varoufakis shot to rock-star fame thanks to his unusual style for a finance minister after being appointed to the job in the wake of the leftist SYRIZA victory in late January.

But while famous both at home and abroad he is a newcomer in politics who does not command a strong following in the SYRIZA party.

Up to forty SYRIZA lawmakers are expected to vote against the deal that requires parliament to agree to a raft of tax hikes and pension reforms if bailout talks with international lenders are to start.

It is all but certain to pass because pro-EU opposition lawmakers will vote for it, but Tsipras's leadership could be seriously weakened if he has to rely on other parties.
Varoufakis noted in a blog on Tuesday that he had warned of the risks of "a new Versailles treaty" when the first Greek bailout was negotiated in 2010.

German Chancellor Angela Merkel was asked at a news conference after Monday's accord whether it was not reminiscent of the 1919 Versailles treaty reparations.

She tried to make light of the question, saying she would not take part in historical comparisons, "especially when I didn't make them myself".

[Reuters]

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