Greek ex-finance minister says reforms ‘going to fail’

PanARMENIAN.Net - The former Greek finance minster has said his country's economic reforms are "going to fail", just as formal talks on a huge bailout are set to begin.

In a BBC interview, Yanis Varoufakis said Greece was subject to a program that will "go down in history as the greatest disaster of macroeconomic management ever".

The German parliament approved the opening of negotiations on Friday, July 17. The bailout could total €86bn in exchange for austerity measures.

In a damning assessment, Varoufakis said: "This program is going to fail whoever undertakes its implementation." Asked how long that would take, he replied: "It has failed already."

Varoufakis resigned earlier this month, in what was widely seen as a conciliatory gesture towards the eurozone finance ministers he had frequently clashed with.

He said Greek Prime Minister Alexis Tsipras, who has admitted that he does not believe in the bailout, had little option but to sign. "We were given a choice between being executed and capitulating. And he decided that capitulation was the ultimate strategy."

Tsipras has announced a cabinet reshuffle, sacking several ministers who voted against the reforms in parliament this week.

Energy minister Panagiotis Lafazanis, one of the hardline rebels, was among those replaced. But Tsipras opted not to bring in technocrats or opposition politicians as replacements.

As a result, the BBC says, Tsipras will preside over ministers who, like himself, harbor serious doubts about the reform program.

Greece must pass further reforms on Wednesday next week to secure the bailout.

Germany was the last of the eurozone countries needing parliamentary approval to begin the talks, with Greece voting to accept hard-hitting austerity measures earlier in the week.

But the head of the Eurogroup of finance ministers, Jeroen Dijsselbloem has warned that the process will not be easy, saying he expected the negotiations to take four weeks.

Some Greek banks could reopen on Monday following weeks of closures, after the European Central Bank (ECB) raised the level of emergency funding available.

Separately, the European Council approved the €7bn bridging loan for Greece from an EU-wide emergency fund. The loan was approved in principle by eurozone ministers on Thursday and now has the go-ahead from all non-euro states. It means Greece will now be able to repay debts to two of its creditors, the ECB and International Monetary Fund (IMF), due on Monday.