Varoufakis Says Debt Deal ‘Extends Greek Bankruptcy into 2060’



Former Greek finance minister Yanis Varoufakis (R) with Greek premier Alexis Tsipras (file photo)

Former Greek finance minister and one-time ally of Prime Minister Alexis Tsipras, Yanis Varoufakis, has claimed Greece’s “bankruptcy” has been extended by five more decades.

Varoufakis, now a founder of the DiEM25 movement, tweeted in aftermath of the Greek debt-relief deal struck at Thursday’s Eurogroup meeting in Luxembourg

He claimed Europe’s “descent into greater denial is in full swing” and claimed the deal would prolong Greek indebtedness into 2060.

Under the agreed debt-relief plan, maturities on 96.6 billion euros ($112 billion) on loans Greece has received from its second bailout would be pushed out by 10 years. The extension will be accompanied by a 10-year grace period in interest and amortization payments on the same loans.

Tsipras celebrated the conclusion of a deal with Eurozone ministers by addressing his cabinet officials wearing a necktie in public for the first time on Friday evening.

In an event broadcast live on Greek public TV, Tsipras said Thursday’s agreement marked the “end of the memorandum era”.

Others have emerged to pour cold water on the deal. Greece’s main opposition party, New Democracy, said there would be a new round of pension cuts in six months’ time plus a lowering of the tax-free allowance. Greece will still have to meet primary surplus targets of 3.5 percent of GDP until 2022 and then 2.2 percent until 2060.

Meanwhile, a senior journalist with the U.K.’s Financial Times newspaper claimed the new debt relief deal “won’t get us anywhere near 110 percent [debt-to-GDP ratio] by 2022”.