Greek Finance Minister Yanis Varoufakis Quits After Defying EU

After leading his country to reject the austerity deal with its creditors yesterday, Greek Finance Minister Yanis Varoufakis resigned from his position in the government this morning.

The still defiant Varoufakis published a blog post today breaking the news to the public and all global investors nervously following the Greek saga. He indicated that the resignation is due to the Greek Prime Minister's understanding that he would make negotiations with creditors unproductive.

Minister No More! https://t.co/Oa6MlhTPjG

— Yanis Varoufakis (@yanisvaroufakis) July 6, 2015

Varoufakis writes: "Soon after the announcement of the referendum results, 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."

Despite this, the Greek Finance Minister did not acknowledge in his announcement today that he indeed did as much as he could to antagonize the IMF, his European partners and Angela Merkel in particular. Only over the weekend he referred to their demands for an austerity plan as "terrorism." Varoufakis did make it a point to add today, "I shall wear the creditors’ loathing with pride."

Market Reactions

The resignation announcement may add more fuel to the uncertainty around European FX pairs as reactions from players in the market start to come out.

Dennis De Jong, UFX Managing Director, commented: “While Varoufakis' resignation was abrupt, it was not surprising, given his continuous absence from meetings with Euro officials. We expect to see the EUR/USD continue to go up slightly, after correcting a 100 pip gap, following today’s referendum voting announcement. We should see the pair settle on 1.12 for the coming days, until a final announcement is made by Greek and Euro-Zone officials.”