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Yanis Varoufakis hits out at 'inept' George Osborne

Yanis Varoufakis Image copyright EUROPEAN PHOTOPRESS AGENCY

George Osborne will be remembered as a "particularly inept" chancellor whose pursuit of austerity in an attempt to rein in Britain's deficit was doomed to failure, according to Yanis Varoufakis.

He told Radio 4's Today that Philip Hammond, Mr Osborne's successor, should change tack and raise public spending.

"It's clear he will spend more," the former Greek finance minister said.

Mr Hammond is to reveal his spending plans at next week's Conservative Party conference in Birmingham.

Mr Varoufakis, in London for the Institute of Directors' annual conference, said each time Mr Osborne had cut spending, he had been forced to push back his budget targets.

However, his criticism of Mr Osborne has come under attack on Twitter. "Kettle 'particularly inept at not being black', says Pot" and "Takes one to know one" were two of the kinder comments.

The maverick former Greek minister, who served from January to June last year and gained notoriety for his confrontational approach to Greece's creditors as well as his habit of wearing leather jackets and riding a motorcycle, said he had spoken "frequently" to John McDonnell, the shadow chancellor.

'Trapped doing nothing'

Mr McDonnell unveiled Labour's economic plans at the party's conference earlier this week, including a £250bn infrastructure package and £10 an hour minimum wage.

"I have spoken to John McDonnell many times," Mr Varoufakis said. "And we agree that the one thing Britain needs is investment."

Mr Varoufakis said there was an estimated £900bn "trapped doing nothing" in City financial institutions and that money needed to be put to work.

He said he foresaw a Europe split into two economic blocs - one in the north, centred on Germany, and another in the south.

Referring to Greece, Mr Varoufakis said he agreed with recent criticisms of the European creditors' negotiation position by the International Monetary Fund - which is itself a creditor.

On Friday, the IMF said European plans to force Greece to operate a large budget surplus were unrealistic and that it needed extra debt relief if it was to return to financial health.

"My country is in a debt trap and it needs a much smaller budget surplus target if it is ever to escape," he said.

Mr Varoufakis also said he expected the eurozone eventually to implode, citing problems in the German and Italian banking systems as a big threat to its stability.

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