EU warned future hangs in balance as Greece ‘more bankrupt than it has ever been’

Greece ‘more bankrupt than ever’ says Varoufakis

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Greece’s former Finance Minister had been invited onto an Economic Research Council panel to discuss the future of the EU after Brexit when he decided to issue the stark warning over the Greek economy. He insisted that despite the fact that the Greek financial crisis was no longer front-page news, the country was more “bankrupt than ever.” Mr Varoufakis warned that following the coronavirus pandemic, Germany and the European Union would likely seek to enforce “fiscal consolidation” on the cash-strapped member state.

“You don’t hear about Greece these days,” said Mr Varoufakis.

“You read the Financial Times, you read the Wall Street Journal, Greece is not in the picture any more.

“One would surmise, would one not, that Greece must have been on the mend for a while now, not to have been front-page news or even tenth-page news these days.

“Well you know we are more bankrupt today than we ever were.”

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In light of the ongoing pandemic and its impact on European economies, richer European member states have increasingly been asking for reassurances about their own taxpayers’ money not being wasted to rescue hailing nations across the bloc.

Greece has long been one of the worst-off EU member states, a situation further exacerbated by the 2008 financial crisis during which the EU had to come together to bail out the country on several occasions.

Mr Varoufakis explained how the level of Greek debt has risen sharply at the same time the value of the country’s economy has shrunk.

He said: “When the crisis began in 2008, our national income was at about 240 billion euros.

“When I walked into the Ministry of Finance it had gone from 240 to 175 and debt had gone up.

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“Do you know what it is today, it is 162 and what is our debt, 380.”

The economist insisted that the European Central Bank would eventually stop “rolling over” the Greek national debt and the EU would in future demand stricter financial rules on members.

He said: “At the moment, because of COVID-19, we have this situation where all the fiscal constraints have been set aside.

“I have no doubt the moment they go back to zero, they balance the budget in Berlin, a phone call or an email or a chat message is going to go from Berlin to Brussels.

“Saying time to start again the process of fiscal consolidation.”

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It comes as Greek politician was asked on Twitter for his thoughts on a common European Budget, which Italy’s soon-to-be Prime Minister Mario Draghi suggested.

Mr Varoufakis responded: “A Federal Budget is a splendid idea. But it requires a Federal Treasury.

“Which, in turn, requires a Federal Government. Which, to be democratic, requires a Federal Constitution.

“Ergo, we need a fully-fledged Democratic Federation. Is Draghi still on board? I think not!”

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