GREECE’S Finance Minister Yanis Varoufakis said in an interview broadcast late Sunday that if Greece were to leave the eurozone, there would be an inevitable contagion effect.

    “Anyone who toys with the idea of cutting off bits of the eurozone hoping the rest will survive is playing with fire,” he told La Sexta, a Spanish TV channel, in an interview recorded 10 days ago.

    “Some claim that the rest of Europe has been ring-fenced from Greece and that the ECB has tools at its disposal to amputate Greece, if need be, cauterize the wound and allow the rest of eurozone to carry on.”

    “I very much doubt that is the case. Not just because of Greece but for any part of the union,” he said, speaking in English.

    “Once the idea enters peoples’ minds that monetary union is not forever, speculation begins ... who’s next? That question is the solvent of any monetary union. Sooner or later it’s going to start raising interest rates, political tensions, capital flight.”

    His comments were recorded before those of Mario Draghi, the European Central Bank’s president, who at the weekend said the eurozone was better equipped than it had been in the past to deal with a new Greek crisis but warned of uncharted waters if the situation deteriorates.

    Greece’s leftist government is trying to negotiate a deal with its lenders from the European Union and the International Monetary Fund to unlock further aid under its 240-billion-euro bailout.

    Eurozone deputy finance ministers gave Athens last Thursday a deadline of six working days to present a revised economic reform plan. Eurozone finance ministers will meet Friday to decide whether to unlock emergency funding to keep Greece afloat.(SD-Agencies)