Meeting with Draghi fruitful claims Varoufakis

“We had a meeting which was fruitful,” Varoufakis stated immediately following the critical meeting with Draghi. He told journalists that the two men had discussed the Greek plan for dealing with the crisis, “The situation in Greece cannot be handled in the usual ways. Greece presented its message,” he said.

According to Varoufakis, for his part Draghi had underlined the ECB’s role in supporting the Eurozone.

The discussion between the government and its lenders over the future of Greece’s financing is taking place under the threat that the ECB may cut Greek banks off from financing as early as at the end of February when the current bailout programme is due to expire. The ECB has previously said that it would not accept Greek debt as collateral in exchange for loans in the event that Greece finds itself out of a bailout program given its poor credit rating.

However many observers note that this would be an unprecedented move that would effectively destroy Greece’s banking system – a move that would be draconian between countries hostile to each other - let alone between supposed allies.

In an interview with the Telegraph yesterday, Varoufakis called the threats ‘illegitimate’ noting that the governing board of the ECB has the discretion to set its own collateral rules independent of the credit ratings provided by ratings agencies.

“They are trying to asphyxiate us with arbitrary deadlines,” Varoufakis told the British newspaper.

Varoufakis has also asked Brussels to extend the 15 billion euro limit on short term borrowing by the Greek treasury.

“We need the fiscal space until June to hammer out a plan,” he said.

Tomorrow Varoufakis is due to meet with the German Finance Minister, Wolfgang Schauble - a man who he has frequently criticized in the past, in one of his more tricky encounters. Varoufakis will argue the necessity for a new and different program of debt restructuring for Greece while stressing the government’s commitments to structural reforms such as tackling the corruption in Greece responsible for many of the country’s woes.