Date
23 January 2017
Greece Finance Minister Yanis Varoufakis says anyone who toys with the idea of cutting off bits of the eurozone hoping the rest will survive is playing with fire. Photo: Reuters
Greece Finance Minister Yanis Varoufakis says anyone who toys with the idea of cutting off bits of the eurozone hoping the rest will survive is playing with fire. Photo: Reuters

Greece warns of exit contagion

Greece Finance Minister Yanis Varoufakis is warning of “inevitable contagion” if the country were to leave the eurozone.

“Anyone who toys with the idea of cutting off bits of the eurozone hoping the rest will survive is playing with fire,” Varoufakis told La Sexta, a Spanish TV channel.

The interview was recorded 10 days ago, according to Reuters.

“Some claim that the rest of Europe has been ring-fenced from Greece and that the ECB [European Central Bank] has tools at its disposal to amputate Greece, if need be, cauterize the wound and allow the rest of euro zone to carry on,” he said, speaking in English.

“I very much doubt that that is the case. Not just because of Greece but for any part of the union,” he said.

“Once the idea enters people’s minds that monetary union is not forever, speculation begins… who’s next? That question is the solvent of any monetary union. Sooner or later it’s going to start raising interest rates, political tensions, capital flight.”

His comments were recorded before those of ECB president Mario Draghi who this weekend said the eurozone is better equipped than it had been in the past to deal with a new Greek crisis but warned of uncharted waters if the situation deteriorates.

Greece’s leftist government is trying to negotiate a deal with its lenders from the European Union and the International Monetary Fund to unlock further aid under its 240 billion euro (US$259 billion) bailout.

Eurozone deputy finance ministers gave Athens last Thursday a deadline of six working days to present a revised economic reform plan.

Eurozone finance ministers will meet on April 24 to decide whether to unlock emergency funding to keep Greece afloat.

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RC/RA

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