Seated in a wheelchair awaiting him was Germany’s dour and all-powerful finance chief, Wolfgang Schäuble. The personification of fiscal discipline, Mr. Schauble was flanked by several officials, dossiers at the ready.
With Greece about to run out of money and in need of German support for emergency funds, Mr. Varoufakis appeared to be outmanned and outgunned. Nonetheless, he was the one who delivered the ultimatum in the meeting: Renegotiate Greece’s €240 billion bailout deal or risk a mutually destructive disaster.
Mr. Schäuble’s answer was a firm “no.” Greece must follow the rules. It was a response repeated by eurozone finance ministers during tense debt talks in Brussels this week, a showdown that will continue on Monday.
The stakes are high. While Greece’s debt woes pose less of a threat to Europe than they did two years ago, an abrupt default would rattle markets and complicate efforts to kick-start growth in the region.
As they face off, Greece, Germany and Europe are all making the same bet: The other side will blink first.
“It’s a poker game right now,” said Steve Keen, an economist and debt specialist. There may be a method to Mr. Varoufakis’s madness.
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The previous night at the finance ministers’ meeting, Mr. Varoufakis, working on two hours of sleep and flashing a Burberry scarf, refused again to renew its bailout contract.
“It’s a madman’s game theory,” said Stavros Zenios, an economist and member of the board at the central bank of Cyprus. “Don’t press us too much or we will jump off a cliff and take everyone with us.”
Alison Smale contributed reporting.
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