REUTERS/Eric Vidal
Greece's Finance Minister Yanis Varoufakis looks up during an extraordinary euro zone finance ministers meeting (Eurogroup) to discuss Athens' plans to reverse austerity measures agreed as part of its bailout, in Brussels February 20, 2015.
After claims, counter-claims and counter-counter-claims emerged over the video's authenticity, Varoufakis has clearly had enough. In a blog post on his website he sets out his take on the passage in question, during which a video appeared to show him making the insulting gesture as he told his audience that "Greece should simply announce that it is defaulting within the euro...in January 2010 and stick the finger to Germany".
He says that the quote above has been taken out of context. Rather than an insult to Germany, his point was that Greece should never have accepted bailout funds from the German taxpayers but instead have allowed private sector creditors to take the hit in 2010.
As he puts it in his post:
In 2010 Greece owed not one euro to German taxpayers. We had no right to borrow from them, or from other European taxpayers, while our public debt was unsustainable. Period!
That was my 'controversial' point in 2010: In 2010, Greece should have borrowed not one euro before entering into debt restructuring procedures and partially defaulting to its private sector creditors.
The inability of Greek taxpayers to repay the bailout funds inevitably led, Varoufakis claims, into a situation that turned "Germans against Greeks, Greeks against Germans and, eventually, Europe against itself". Instead of continuing down the route of "moralising finger-pointing" the Greek finance minister calls on both sides to work together on reforming both Greece and the monetary union more broadly.
While his conciliatory tone will no doubt be welcome, in reality the middle finger video was only the latest in a growing line of problems that the Syriza-led government in Athens has managed to get themselves into of late.
From apparent last minute changes of heart during crucial negotiations with their European partners, to threatening to seize German assets in Greece as reparations for war debts, to the latest chapter of video-gate the inexperience of the government appears to be showing.
However, with the country running out of both time and money the current negotiations offer something of a last-chance saloon for the Prime Minister Alexis Tsipras and his team to secure a desperately needed extension of bailout funds and calm nerves both abroad and at home.
The hope is that Varoufakis' apparent attempt at deescalating his clash of heads with the media is a sign that the government is fully aware of the stakes