Greek finance minister: Euro will collapse if Greece exits (Sharp response from Italian Economy Minister Pier Carlo Padoan)

If Greece is forced out of the euro zone, other countries will inevitably follow and the currency bloc will collapse, Greek Finance Minister Yanis Varoufakis said, in comments which drew a rebuke from Italy...

Greece's new leftist government is trying to re-negotiate its debt repayments and has begun to roll back austerity policies agreed with its international creditors.

In an interview with Italian state television network RAI, Varoufakis said Greece's debt problems must be solved as part of a rejection of austerity policies for the euro zone as a whole. He called for a massive "new deal" investment programme funded by the European Investment Bank.

"The euro is fragile, it's like building a castle of cards, if you take out the Greek card the others will collapse." Varoufakis said according to an Italian transcript of the interview released by RAI ahead of broadcast.

The euro zone faces a risk of fragmentation and "de-construction" unless it faces up to the fact that Greece, and not only Greece, is unable to pay back its debt under the current terms, Varoufakis said.

"I would warn anyone who is considering strategically amputating Greece from Europe because this is very dangerous," he said. "Who will be next after us? Portugal? What will happen when Italy discovers it is impossible to remain inside the straitjacket of austerity?"
Varoufakis and his Prime Minister Alexis Tsipras received friendly words but no support for debt re-negotiation from their Italian counterparts when they visited Rome last week. But Varoufakis said things were different behind the scenes.

"Italian officials, I can't tell you from which big institution, approached me to tell me they backed us but they can't tell the truth because Italy also risks bankruptcy and they are afraid of the reaction from Germany," he said.

• "Let's face it, Italy's debt situation is unsustainable," he added, a comment that drew a sharp response from Italian Economy Minister Pier Carlo Padoan, who said in a tweet that Italy's debt was "solid and sustainable."

• Varoufakis's remarks were "out of place", Padoan said, adding that Italy was working for a European solution to Greece's problems, which requires "mutual trust".

Italy's public debt is the largest in the euro zone after Greece's and Italian bond yields surged in 2011 at the height of the euro zone crisis. They have since fallen steeply and have so far come under little pressure from the renewed tensions in Greece.
Varoufakis said his government would propose a "new deal" for Europe like the one enacted in the United States in the 1930s. This would involve the European Investment Bank investing ten times as much as it has so far, Varoufakis said.
If Europe continues to pursue counterproductive austerity policies the only people who will benefit will be "those who hate European democracy," he said, citing the Golden Dawn party in Greece, the National Front in France and the United Kingdom Independence Party in Britain.
  http://www.buenosairesherald.com/article/181503/greek-finance-minister-euro-will-collapse-if-greece-exits
8/2/15
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Related:

• Greece: Greenspan predicts exit from euro inevitable ...

• The standoff between Greece and the euro zone over Greek debt is raising the risks to the British economy “every day”, Chancellor George Osborne said on Sunday, warning a Greek exit from the euro would cause “real ructions” in his country...

• Tsipras presenta en el Parlamento su plan de choque para Grecia...

Promete ayuda alimentaria y electricidad gratuita para los más necesitados El primer ministro griego anuncia que se volverá a contratar a los funcionarios despedidos Este plan escalonado de medidas costaría unos 2.000 millones de euros

• Varoufakis-Padoan sulle difficoltà dell’Italia...

Qualche frizione Italia-Grecia è scaturita dal botta e risposta tra i due ministri dell’Economia, in attesa del discorso programmatico di Alexis Tsipras al Parlamento di Atene. Il premier ha rivendicato la bontà della sua strategia politica e detto che: «La Grecia vuole pagare il suo debito ma vuole raggiungere un’intesa comune con i partner per l’interesse di tutti: il problema del debito greco non è economico ma politico».  

• Il botta e risposta  

Il debito italiano è «solido e sostenibile» e le dichiarazioni di Yanis Varoufakis, secondo il quale il debito italiano è insostenibile e Roma rischia la bancarotta, sono «fuori luogo». Lo scrive su Twitter il ministro dell’Economia, Pier Carlo Padoan, replicando al ministro delle Finanze greco e aggiungendo che «servono soluzioni europee che richiedono fiducia condivisa. A questo lavora il governo italiano». 

La risposta di Padoan è alle dichiarazioni rilasciate da Varoufakis in un’intervista al programma «Presa diretta» in onda stasera su Rai 3 e anticipata da un video online.....................http://www.lastampa.it/2015/02/08/esteri/tispras-vogliamo-pagare-il-debito-scontro-varoufakispadoan-sulle-difficolt-dellitalia-qSZvBLW6GMDBaD10Gfdu5O/pagina.html
8/2/15