Spain Could Become Like Greece, Warns Varoufakis

Yanis Varoufakis

Yanis Varoufakis warns that Spain could become like Greece if the same austerity policies are imposed on the country.

During an interview with daily El Pais,  the former Greek finance minister said “The danger of becoming Greece is always there and it will become reality if the same mistakes that were imposed on Greece are repeated”

Yahoo news reports: Varoufakis, an economist with unorthodox ideas about the euro and Greece’s debt restructuring, resigned the day after Greeks voted against creditor bailout terms in a July 5 referendum.

The Greek government later accepted even harsher terms in a deal at an all-night eurozone summit on July 12-13.

With a general election looming later this year, Spanish Prime Minister Mariano Rajoy has used the economic turbulence in Greece as a chilling backdrop to promote his own government’s crisis management.

Rajoy’s conservative Popular Party says that if new far-left party Podemos — a close ally of Greece’s ruling Syriza — forces a change of course on the economy after the election, Spain could plunge back into crisis.

Asked about the Spanish government’s statements, Varoufakis said Greece “has become a sort of football for right-wing politicians, who insist on using Greece to frighten their population.”

Spain emerged in 2013 from five years of on-off recession and the government forecasts the economy will grow 3.3 percent this year — more than twice the average forecast for eurozone countries.

Madrid aims in 2016 to bring the deficit under the level of three percent of economic output required by European treaties.

It forecasts the country’s public debt will equal 98.5 percent of the economy this year, compared with Greece’s debt ratio of more than 177 percent.

But its unemployment rate is still dire at more than 22 percent — the second-highest in the eurozone after that of bailed-out Greece.