ECONOMY

Varoufakis warns creditors of possible Greece default

Greek Finance Minister Yanis Varoufakis, in an interview with the Huffington Post, indicated that Greek authorities could default if the country’s creditors retain a tough stance in negotiations and leave authorities with no other choice.

Responding to question about whether it would be possible for Greece to default and still stay on the euro, Varoufakis pointed out that Greece had previously defaulted in 2012, suggesting that Greece may respond in the same way if it cannot reach a new deal with its creditors by April 24. “It has already happened,” Varoufakis said. “In 2012, the Greek government defaulted on 100 billion euros of existing debt commitments.”

“Let me be precise on this,” Varoufakis said, “because these are problematic times and there a lot of people who will latch on to any word or phrase that they deem fit in order to make mischief. This is not a time to allow them to make mischief. The fact is that Greece is out of the markets and it has been redeeming its debts for the last few months using its own scarce liquidity.”

“It can’t go on,” he continued. “If it could, then we wouldn’t be a program country, right? So if our partners in the institutions say, ‘No liquidity for you, no disbursements, no new contract,’ then of course this is unsustainable, as it would be with any country that is in a kind of IMF program, a Troika program or ECB program.”