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| Greece debt crisis news: Yanis Varoufakis says 'disastrous' bailout reforms 'will fail' | Greece debt crisis news: Yanis Varoufakis says 'disastrous' bailout reforms 'will fail' |
| (about 1 hour later) | |
| Reforms that Greece must implement in return for its latest bailout “will fail” to revive its economy, the country’s former finance minister Yanis Varoufakis has predicted. | Reforms that Greece must implement in return for its latest bailout “will fail” to revive its economy, the country’s former finance minister Yanis Varoufakis has predicted. |
| The package – including VAT rises and pensions cuts – would "go down in history as the greatest disaster of macroeconomic management ever", Mr Varoufakis said. | The package – including VAT rises and pensions cuts – would "go down in history as the greatest disaster of macroeconomic management ever", Mr Varoufakis said. |
| The comments come after both the Greek and German parliaments voted in favour of the deal between Greece and its creditors, with the country receiving up to €86bn (£60bn) in exchange for austerity measures. | The comments come after both the Greek and German parliaments voted in favour of the deal between Greece and its creditors, with the country receiving up to €86bn (£60bn) in exchange for austerity measures. |
| Mr Varoufakis, who resigned over the deal and was among rebel deputies from the governing Syriza party to vote against it, gave the damning assessment in an interview with the BBC. | Mr Varoufakis, who resigned over the deal and was among rebel deputies from the governing Syriza party to vote against it, gave the damning assessment in an interview with the BBC. |
| He said: "This programme is going to fail whoever undertakes its implementation." | He said: "This programme is going to fail whoever undertakes its implementation." |
| The deal had “failed already”, Mr Varoufakis added when asked when the deal would fail – apparently a reference to the failure of two previous bailout deals to produce economic growth. | The deal had “failed already”, Mr Varoufakis added when asked when the deal would fail – apparently a reference to the failure of two previous bailout deals to produce economic growth. |
| Mr Varoufakis said that the prime minister, Alexis Tsipras – who has admitted he does not believe in the package either – had little option but to sign up to it. | Mr Varoufakis said that the prime minister, Alexis Tsipras – who has admitted he does not believe in the package either – had little option but to sign up to it. |
| "We were given a choice between being executed and capitulating. And he decided that capitulation was the ultimate strategy," he told the corporation. | "We were given a choice between being executed and capitulating. And he decided that capitulation was the ultimate strategy," he told the corporation. |
| The Greek parliament must pass further reforms on Wednesday of next week to secure the bailout cash. | The Greek parliament must pass further reforms on Wednesday of next week to secure the bailout cash. |
| Mr Tsipras has reshuffled his cabinet following this week’s rebellion within his party, replacing two ministers who voted against the reforms and changing a further eight ministers and deputy ministers. Mr Tsipras reshuffled his cabinet following this week's rebellion | Mr Tsipras has reshuffled his cabinet following this week’s rebellion within his party, replacing two ministers who voted against the reforms and changing a further eight ministers and deputy ministers. Mr Tsipras reshuffled his cabinet following this week's rebellion |
| Thirty-eight of Mr Tsipras's 149 radical-left Syriza party policy-makers dissented, with 32 voting against him outright and six abstaining. The dissenters included two cabinet members – including energy minister Panagiotis Lafazanis - as well as the parliament speaker and Mr Varoufakis. | Thirty-eight of Mr Tsipras's 149 radical-left Syriza party policy-makers dissented, with 32 voting against him outright and six abstaining. The dissenters included two cabinet members – including energy minister Panagiotis Lafazanis - as well as the parliament speaker and Mr Varoufakis. |
| Mr Lafazanis was replaced by the former labour minister, Panos Skourletis, while Trifon Alexiadis becomes the new alternate finance minister following Nadia Valavani's resignation in the run-up to the vote earlier this week. | Mr Lafazanis was replaced by the former labour minister, Panos Skourletis, while Trifon Alexiadis becomes the new alternate finance minister following Nadia Valavani's resignation in the run-up to the vote earlier this week. |
| Significantly, Mr Tsipras did not replace the sacked ministers with technocrats or opposition figures – meaning that new ministers are Syriza MPs who will harbour similar reservations about the bailout package. | Significantly, Mr Tsipras did not replace the sacked ministers with technocrats or opposition figures – meaning that new ministers are Syriza MPs who will harbour similar reservations about the bailout package. |
| The new ministers were sworn in on Saturday. | |
| The austerity measures were demanded by Greece's European creditors before negotiations on a third bailout could begin. The bill passed by 229 votes to 64 in the 300-member Greek parliament, with three pro-European opposition parties backing Mr Tsipras. | |
| Negotiations over the latest bailout deal are likely to last four weeks. | Negotiations over the latest bailout deal are likely to last four weeks. |