Greek Finance Minister resigns; Euclid Tsakalotos, New Finance Minister.

Greece’s outspoken Finance Minister Yanis Varoufakis resigned on Monday, removing one major obstacle to any deal to keep Athens in the euro zone after Greeks voted resoundingly to back the government in rejecting the austerity terms of a bailout.

Leftist Prime Minister Alexis Tsipras promised German Chancellor Angela Merkel that Greece would bring a proposal for a cash-for-reforms deal to an emergency summit of euro zone leaders on Tuesday, an official said.

However, Ms. Merkel said on Monday that the conditions for fresh talks on a new rescue package sought by Greece from the European Stability Mechanism were “not yet met.”

Mr. Tsipras said on Sunday that the ‘No’ victory in the country’s bailout referendum did not mean Athens was headed for a so-called Grexit. “This is not a mandate of rupture with Europe, but a mandate that bolsters our negotiating strength to achieve a viable deal,” he said in a televised address.

However, officials in Brussels and Berlin said a Greek exit from euro zone now looked ever more likely. But they also said talks to avert it would be easier without Mr. Varoufakis, an “erratic Marxist” economist who infuriated his euro zone finance ministers with an informal style and hectoring lectures.

His sacrifice suggested Mr. Tsipras is determined to try to reach a last-ditch compromise with European leaders.

The government has named lead bailout negotiator Euclid Tsakalotos, a softspoken academic economist, as the new Finance Minister.

Greece’s political leaders, more accustomed to screaming abuse at each other in Parliament, spent the day locked in talks at the President’s office trying to produce a national unity statement.

After five years of economic crisis and mass unemployment, Greek electors voted 61.3 per cent ‘no’ to the bailout conditions already rejected by their radical leftist government, casting Greece into the unknown.

The euro slid against the dollar after the setback for Europe’s monetary union, and European shares and bonds took a hit when markets opened after the weekend. But the losses were contained and there was no sign of serious contagion to other weaker euro zone sovereigns.

Analysts with several international banks said a “Grexit” from the euro zone was now their most likely scenario.

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Source:Thehindu