The resignation of Greek Finance Minister Varoufakis this morning ‘does help a lot’ Finance Minister Edward Scicluna said in an interview today.

In an interview on Bloomberg Business, Prof Scicluna said negotiations were done by people and when people got irritated, negotiations got hard.

Nobody would like to interfere in who Greece appointed as its finance minister he said. What was important was to get stability and certainty.

Referring to yesterday's referendum, where Greek voters rejected an EU offer by over 60 per cent, Prof Scicluna said that had similar referenda been held in Ireland, Cyprus and Portugal (which also got bailout help) the result would probably have been the same, if not higher.

"So I am not impressed with the 60 per cent, but it does tell that the people do not know the realities and the alternatives."

Perhaps, he should, there should be a referendum if a Greek exit from the Eurozone became inevitable.

If that stage was reached, he stressed, it had to be carefully managed as it would have a devastating effect on Greece and on the euro.

Nobody within the Eurogruop (of EU finance ministers) and on the Greek side wanted to pull the plug on Greece's membership of the eurozone.

"However what is happening is that we are sliding towards that point,” Prof Scicluna said.

The issue now, he said, was whether the people of the creditor countries wanted to lend more money to Greece.

The issue now is whether the people of the creditor countries want to lend more money to Greece.

“The people of the lender countries are going to be asked not whether the money of the last tranche €7.2 billion, would be paid, because that almost appears trivial, but they will be asked about a whole new bailout. The hole has got bigger and bigger and that’t when you  look reality in the face and say: I am going back to my country, are we going  to ask our people to borrow again in order to lend to Greece when we do not have certainty of getting our money back”.

Asked whether there would be any debt forgiveness, Prof Scicluna said he could not pre-empt what would happen. Much would depend on whether the proposed package remained and whether it would lead to a turnaround. Everybody was trying to be cooperative, he said.

What we do not want to see is tricks and brinkmanship. We want Greece to succeed, but in order to lend money, one needs some assurance that one would succeed. 

It was true, he said, that Greek people were  suffering, but there were poor people in the other eurozone countries as well. There were pensions in the lender countries which were much lower than in Greece.

“So it is all comparative. If you are asking the other 18 countries to help you, they will ask questions, it’s as simple as that.”

Asked which countries were most against debt forgiveness, Prof Scicluna said, pointedly that the interlocutor for Greece had united the whole group. 

“There were a lot of friends and they started losing them one by one. There were ministers who were trying really hard to help Greece, but they were rebuffed by the attitude and the way things went on. The Eurogroup is very united, very irritated ans we need to get back and see things really calmly as this can damage not only Greece but also ourselves and the markets,” Prof Scicluna said. 

http://www.bloomberg.com/news/videos/2015-07-06/varoufakis-resignation-does-help-a-lot-scicluna