(cont'd)
Mr Varoufakis said Syriza had "vetoed" the Eurogroup demands for further increases in the primary budget surplus from 0.6pc of GDP in 2014, to 3pc this year, and 4.5pc next year - a crime against economic science, he says - and they intend to take a liberal view of what this concession means.
These demands would have been "catastrophic" for a county already in depression and without a functioning credit system, he said. The target will henceforth be "appropriate" to economic circumstances, and closer to the IMF's more dovish view of the fiscal multiplier. "This is a great conquest," he said.
Mr Tsipras told the party faithful the day after the deal that Greece had "won the battle, but not the war", inflicting the first defeat on the austerity regime. The narrative at home is that right-wing forces in Europe had attempted to crush their democratic revolution at the first pass, and had been checked.
There was a revealing episode afterwards when ageing composer Mikis Theodorakis wrote an open letter to Mr Tsipras exhorting him to defy Mr Schaueble and throw out the "Bavarians". He was evoking a deep historical grievance, decrying the Wittelsbach dynasty that was imposed on Greece in 1833 by foreign powers - without seeking Greek consent - and which quickly bankrupted the young state, but not before it had obliterated Greek customary law and "disfigured" a Byzantine nation.
Mr Theodorakis alleged "two centuries of European crimes against Greece," implicitly calling for for a civilisational divorce from the Western enemies of the Hellenic Orthodox world. Mr Tsipras could have ignored it. Instead, he called to congratulate the old lion, inviting him to the presidential palace the next day. Such reflexes are being watched closely by Berlin, and by Moscow.
Mr Tsipras is of course walking a fine line, even if his approval rating has surged to 87pc. The first anti-Syriza riots tore through the Exarchia district of Athens on Thursday night as hooded anarchists hurled Molotov cocktails and fire-bombed a car to protest the EMU "sell-out".
Less visible, but more threatening, are powerful forces within the economic oligarchy who are starting to question whether they might not do better protecting their vested interests outside the euro, shielded from EU scrutiny. They have links to the military, police, and security apparatus.
Mr Varoufakis said the latent danger is the far-Right. "If pro-European and democratic governments like ours are asphyxiated, and voters are driven to despair, the only people who will benefit are fanatics, racists, nationalists, and all those who feed on fear," he told France's Charlie Hebdo.
For now it is quiet in the working-class Nikaia district of West Athens where a rap-singer was clubbed to death on the streets by militias from the Fascist Golden Dawn party in 2013. Yet it would be unwise to take this for granted.
The municipality had 30 families registered as poor and needy in 2009. This rose to 330 in 2011. It is now 1,350. "They have no money left," said Michalis Fiorentis, a veteran poverty-fighter for the council.
"The recession finished off the small leather and clothes factories in this quarter. People lost their jobs, their shops, their family insurance, and spiralled into debt, all at once."
Mr Fiorentis confesses that there is very little that his under-funded office can do to mitigate the distress. With no illusions, he gives Syriza his acid blessing. "If they don't tell as many lies as the last government, that would be a start."
Mr Tsipras is juggling agendas, so far with remarkably steely nerves and sang-froid for such a young man. He survived a stormy 10-hour debate of the Syriza caucus this week, with just five MPs voting against the EMU deal. Yet the criticisms over the Brussels deal were blistering. Panagiotis Lafazanis, head of Syriza's 'Left Platform', said his forces will not accept any retreat from a "radical left orientation".
The prime minister is heeding the warnings. Privatisation of the power utilities, airports, and ports have been cancelled or face drastic review, leaving only "completed" deals in tact. This a minimalist reading of the text signed in Brussels, another sign that Syriza has no intention of buckling to Mr Schaueble's very different hermeneutics.
"We will cancel the privatisation of the Piraeus Port," said George Stathakis, the economy minister, wearing the trade-mark leather jacket of the movement. He is a Marxist economist, yet also the British-educated son of a Cretan shipping magnate, the two sides of Syriza.
"It will remain permanently under state majority holding. There is no good reason to turn it into a private monopoly," he said. Indeed, the port generates an income for the state. Syriza suspects that the chief reason why the Troika is pushing €25bn of fire-sales into a depressed market is to collect debts for the creditor powers, for it makes no other sense.
The parallel with the International Committee for Greek Debt Management in 1898 is lost on nobody. The six-power league of bondholders seized customs duties in the Port of Piraeus, and took over revenues from stamp duty, tobacco, salt, kerosene, and even playing cards.
A veteran EU diplomat in Athens said the Troika is so determined to extract money that it has turned a blind eye to some of the dubious deals tailored to the interests of powerful oligarchs. "The sales are a stitch-up, all going to the same small circle. We know exactly who the biggest smuggler of shipping fuel is, and why nothing has been done. He was very close to the previous government. Syriza are not part of this system and don't have 'checks to pay back'," he said.
It is this debt collector's agenda that has fed contempt for the word "reform" in Greece. The Greeks know from leaked IMF minutes that their country was sacrificed in the first bail-out of 2010 in order to save the euro and Europe's banks at a time when EMU had no defences against contagion. “Debt restructuring should have been on the table,” said Brazil's IMF member.
Instead the Troika foisted more debt onto Greece, roping EMU taxpayers into what should have been a dispute between the Greek state and private bondholders. “Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders, the Greek taxpayer. What we’ve had ever since is fiscal waterboarding," said Mr Varoufakis.
The government has cut its wage bill by a third in five years. Public sector jobs have fallen by 170,000. Average pay has fallen 22.5pc. Yet the debt has spiralled up, from 157pc in 2012 to 182pc last year.
Such is Greece's Sisyphean Task. The ferocity of the fiscal cuts - without monetary stimulus, or the usual devaluation and debt relief in IMF packages - has caused the economy to contract by a quarter, shrinking the base that must carry the debt burden. Gains from austerity have been overwhelmed by more powerful debt-deflation forces. The IMF has admitted in a mea culpa that the Troika exceeded the therapeutic dose for fiscal tightening.
Greece is now told it must to cut the debt to 124pc of GDP over the next five years to comply with the Troika memorandum. It is the Big Lie of the Greek bail-out, perpetuated by the creditors to deceive their own democracies at home. The economy minister shrugged his shoulders and laughed when I asked him how his country planned to meet this patently absurd target.
Syriza hoped to end the charade by securing allies in Southern Europe with calls for an EMU-wide debt conference modelled on the London Accord of 1953, which cleared the way for post-War recovery. Here they over-reached. The insidious effect of the bail-out is that Greece now owes the money to Italian and Spanish taxpayers, among others, vastly complicating the political landscape.
In any normal contest with creditors, Syriza's position would be hopeless. But nothing about this episode is normal. If EMU were to force Greece out of the euro by withdrawing bank liquidity and deliberately causing the collapse of the Greek financial system - to which the ECB has a duty of care under EU treaty law - they would create a martyr state for the whole European Left.
They would violate the sanctity of monetary union and risk reducing it to a fixed exchange "ERM3", inviting an attack on the weakest link to follow. The EU's extraordinary experiment in solidarity would lie in ruins.
The Western security system would the face turmoil in the Balkans. It would have to deal with an embittered state - hostile to Nato, and willing to play the Russian card - along an arc of instability stretching from Ukraine, though the Levant, to North Africa. That is why US President Barack Obama has intervened, pleading with Chancellor Merkel to avert the worst. The stakes are too high for finance ministers.
It is far from clear who really has the upper hand in this game of strategic chicken. Both sides can reasonably calculate that the other will blink first at each deadline to come. One of them is wrong. That is what makes this drama so riveting, and so dangerous.
