Greek Finance Minister Quits To Smooth Talks After Thunderous 'No'

Greece's combative finance minister 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.

Greek Finance Minister Quits To Smooth Talks After Thunderous 'No'

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, a Greek official said. It was unclear how much it would differ from other proposals rejected in the past.

Gloomy officials in Brussels and Berlin said a Greek exit from the currency area now looked ever more likely.

But they also said talks to avert it would be easier without Yanis Varoufakis, an avowed "erratic Marxist" economist who infuriated fellow euro zone finance ministers with his casual style and indignant lectures. He had campaigned for Sunday's 'No' vote, accusing Greece' creditors of "terrorism".

"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.

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

Greece's political leaders, more accustomed to screaming abuse at each other in parliament, issued an unprecedented joint statement after a day of talks at the president's office backing efforts to reach a deal with creditors.

They called for immediate steps to reopen banks and said any deal must address debt sustainability - code for reducing Athens' crushing debt - but gave no hint of concessions from the Greek side toward lenders' demands for deep spending cuts and far-reaching reforms of pensions and labor markets.

The chief negotiator in aid talks with international creditors, Euclid Tsakalotos, a soft-spoken academic economist, was appointed finance minister.

Austrian Finance Minister Hans Joerg Schelling said publicly what other euro zone players had said in private: "Varoufakis was someone who massively destroyed trust through his name-calling and by repeatedly criticizing the institutions ... that's why I hope that the basis for talks will now be better."

To win any new deal, Greece will have to overcome deep distrust among partners, above all Germany, Greece's biggest creditor and the EU's biggest economy, where public opinion has hardened in favor of cutting Greece loose from the euro.

Varoufakis had a particularly acrimonious relationship with Germany's Finance Minister Wolfgang Schaeuble, who said the new Greek minister would not have an easy task.

German government spokesman Steffen Seibert said conditions were not yet in place for a resumption of negotiations with Greece.