Greek finance minister tells magazine: Grexit no bluff if more austerity imposed

Markets | Thu Apr 23, 2015 3:39pm EDT Related: WORLD, GREECE

PARIS

(Reuters) - The risk that Greece would have to leave the euro if it has to accept more austerity is no bluff, Greek Finance Minister Yanis Varoufakis told a French magazine, saying that no one could predict what the consequences of such an exit would be.

In a conversation with philosopher Jon Elster conducted at the end of March and published in France's Philosophie Magazine, Varoufakis, a specialist in game theory, said this was not the time to bluff over Greece's debt talks.

"We cannot bluff anymore. When I say that we'll end up leaving the euro, if we have to accept more unsustainable austerity, this is no bluff," Varoufakis is quoted as saying.

Greek Prime Minister Alexis Tsipras called for a speeding up of work to conclude a reform-for-cash deal with euro zone creditors to keep his country afloat after talks with German Chancellor Angela Merkel on Thursday.

The leftist Greek premier met the conservative German leader a day before euro zone finance ministers meet in Riga to review progress - or the lack of it - in slow-moving negotiations between Athens and its international lenders.

The Greek government has insisted it will remain a euro zone member, and its currency bloc partners have said they want it to stay.

However, in contrast to the height of the debt crisis in 2012, when Grexit fears spurred panic selling of other weak euro zone sovereigns, investors now seem relaxed about the fate of Greece, which accounts for just 2 percent of the region's economy.

Asked what would happen if Greece was to leave the euro, Varoufakis mentioned comments made by European policymakers who say any contagion effect could be avoided and added that, on the contrary, he believed the consequences would be unpredictable. ‎

"Anyone who pretends they know what would happen the day we'll be pushed over the cliff is talking nonsense and is working against Europe," he said.

(Reporting by Ingrid Melander; Editing by Toby Chopra)