19 Jul 2015

Greek reforms hav 'failed already' - Varoufakis

7:57 am on 19 July 2015

Former Greek Finance Minister Yanis Varoufakis says that economic reforms imposed on his country by creditors are "going to fail", ahead of talks on a huge bailout.

Mr Varoufakis said Greece was subject to a programme that will "go down in history as the greatest disaster of macroeconomic management ever".

Yanis Varoufakis

Yanis Varoufakis says the reforms have "failed already". Photo: AFP

The German parliament approved the opening of negotiations on Friday.

The bailout could total €86 billion in exchange for austerity measures.

In a damning assessment, Mr Varoufakis told the BBC: "This programme is going to fail whoever undertakes its implementation."

Asked how long that would take, he replied: "It has failed already."

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

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 optimal strategy."

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

But he opted not to bring in technocrats or opposition politicians as replacements.

As a result, BBC correspondent Mark Lobel said, Mr Tsipras will preside over ministers who, like himself, harbour serious doubts about the reform programme.

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.

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

On Saturday, the Greek government ordered banks to open on Monday following three weeks of closures.

But the decree stated that the weekly withdrawal limit should be a maximum €420.

Separately, the European Council approved the €7b 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.

- BBC