Varoufakis rules out 'Grexit'

Following comments from the head of the International Monetary Fund, Christine Lagarde, that the IMF would not agree to let Greece delay a scheduled bailout payment, Varoufakis said, "Our only rational pro-European response is to spend every waking hour... trying to reach an honorable agreement."

But in prepared remarks for a speech at the Brookings Institution, the Washington centrist think tank, Varoufakis said, "We will not sign up to targets we know our economy cannot meet by means of policies that our partners should not wish to impose."

Varoufakis said the European Commission, European Central Bank, and the IMF needed to give some ground on their demands for reforms, and recognize that the previous bailout approach of deep austerity had failed. "We've tried that medicine but it hasn't worked," he said.

There are concerns that the European Union's April 24 deadline to come to an agreement in principle with Athens over terms for a new loan will be missed. A deal would allow the country to make key debt payments to the IMF and ECB over the next two months.

Varoufakis did not say which issues were holding up the agreement, but said the two sides shared "a great deal" of common ground. He also referred to the problems the lack of a deal were causing to Greece's already weakened economy: "The longer these negotiations go on, the greater the asphyxiation of our economy."

"The negotiation must succeed," he added. "It will be such a shame that this agreement is not concluded in the next few days, weeks."

Lagarde, EU position

Speaking in Washington on Thursday, Lagarde said the IMF would not agree to let Greece delay a scheduled bailout payment. She said the IMF needed to protect its reputation as a global lender.

"We have never had an advanced economy asking for payment delays," Lagarde said as she answered reporters' questions on Greece's debt crisis.

Speaking earlier in Washington, EU Economic and Monetary Affairs Commissioner Pierre Moscovici said the financial fallout from a potential Greek exit from the eurozone could be contained. But he said a Grexit would present a political rupture raising questions on which country might be next: "It would be a catastrophe for the eurozone," he said.

Lagarde met with Varoufakis in Washington and said Greece and its lenders needed to "get on with the work" of evaluating Athens' reform plans and coming to an agreement. "To do that, it's not done by a political, last-minute accord," she said. "It's done by ... the tedious work of finance ministers, wherever they are, and the lenders."

jm/bw (Reuters, AFP)