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Greece Rules Out Bailout Deal that Won't Allow Crisis Exit

Greek Finance Minister Yanis Varoufakis gives a speech during an economic conference in Athens, May 14, 2015.

Greece's finance minister insisted Thursday that he will reject any deal with international bailout creditors that does not help the country exit its economic crisis.

The radical left-led government in Athens is locked in very slow-moving negotiations with its European creditors over a package of reforms demanded in exchange for a long-overdue rescue loan installment. Without the funds, Greece risks bankruptcy within weeks, and eventually, a possible exit from the euro currency.

Yanis Varoufakis said Greece must escape the “strictness trap” of budget measures that might hurt the economy and so prevent the country from reducing its debt mountain to manageable levels.

After emerging briefly last year from a six-year economic depression, Greece is officially back in recession, adding urgency to the need for a swift deal in the bailout talks.

But Varoufakis told an economic conference in Athens that he would not sign an agreement unless it helps ease the country out of its crisis.

“Because if I do sign, I will be yet another finance minister who signs a midterm fiscal adjustment program that he knows will not work,” he said. “And it can be proved mathematically that it doesn't work.”

Varoufakis insisted that the country needs a debt “redesigning” that will substantially extend repayment deadlines, with possible solutions including bond swaps.

He claimed that, once a satisfactory agreement with creditors is reached, Greece will enjoy “a torrent of investment capital” from investors outside the European Union.

Varoufakis described a Greek exit from the euro and return to the old national currency as “going back to the Neolithic Age.”

“I wish that we had the drachma — make no mistake, this is not to say that I want the drachma,” he said. “I wish we had not entered this monetary union, but once you're in you don't get out, without catastrophe.”