Greek finance minister: The euro will collapse if Greece exits

ROME(Reuters) - IfGreeceis forced out of the euro zone, other countries will inevitably follow and the currency bloc will collapse, Greek Finance MinisterYanis Varoufakissaid on Sunday.Greece's new leftist government is trying to re-negotiate its debt repayments and has begun to roll back austerity policies agreed with its international creditors.In an interview with Italian state television network RAI, Varoufakis saidGreece's debt problems must be solved as part of a rejection of austerity policies for the euro zone as a whole. He called for a massive "new deal" investment program funded by the European Investment Bank."The euro is fragile, it's like building a castle of cards, if you take out the Greek card the others will collapse." Varoufakis said according to an Italian transcript of the interview released by RAI ahead of broadcast.The euro zone faces a risk of fragmentation and "de-construction" unless it faces up to the fact thatGreece, and not onlyGreece, is unable to pay back its debt under the current terms, Varoufakis said."I would warn anyone who is considering strategically amputatingGreecefromEuropebecause this is very dangerous," he said. "Who will be next after us'Portugal' What will happen whenItalydiscovers it is impossible to remain inside the straitjacket of austerity'"Varoufakis and his Prime MinisterAlexis Tsiprasreceived friendly words but no support for debt re-negotiation from their Italian counterparts when they visitedRomelast week. But Varoufakis said things were different behind the scenes."Italian officials, I can't tell you from which big institution, approached me to tell me they backed us but they can't tell the truth becauseItalyalso risks bankruptcy and they are afraid of the reaction fromGermany," he said."Let's face it,Italy's debt situation is unsustainable," he added.Italy's public debt is the largest in the euro zone afterGreece's and Italian bond yields surged in 2011 at the height of the euro zone crisis. They have since fallen steeply and have so far come under little pressure from the renewed tensions inGreece.Varoufakis said his government would propose a "new deal" forEuropelike the one enacted in theUnited Statesin the 1930s. This would involve the European Investment Bank investing ten times as much as it has so far, Varoufakis said.IfEuropecontinues to pursue counterproductive austerity policies the only people who will benefit will be "those who hate European democracy," he said, citing theGolden Dawn party in Greece, theNational FrontinFranceand the United KingdonIndependence Partyin Britain.(Editing by Ralph Boulton)Join the conversation about this storyNOW WATCH: This Flying Car Is Real And It Can Fly 430 Miles On A Full Tank
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