He told the BBC that the medicine administered to the Greek economy by its so-called “troika” of creditors – the European Union, the European Central Bank and the International Monetary Fund – will “go down in history as the greatest disaster of macroeconomic management ever”.
German Parliament had yesterday approved the opening of discussions.
Mr Varoufakis was speaking to the BBC’s Mark Lobel after the way was cleared for negotiations on a €86bn (£60bn) third bailout for Greece.
“This programme is going to fail whoever undertakes its implementation”, he said.
The deal had “failed already”, Mr Varoufakis added when asked when the deal would fail – apparently a reference to the failure of two previous bailout deals to produce economic growth.
The resignation of Mr. Varoufakis came earlier in the month and many thought it to be a gesture for peace-making with the eurozone finance ministers, with whom he had often clashed.
“We were given a choice between being executed and capitulating”.
Mr Tsipras has announced a cabinet reshuffle, sacking several ministers who voted against the reforms in parliament this week. One of the men replaced was energy minister Panagiotis Lafazanis, a hard line member of the Syriza coalition.
But Mr Tsipras opted not to bring in technocrats or opposition politicians as replacements.
The third bailout could cost up to €86 billion, in exchange for harsh austerity measures, and Greece must pass further reforms on Wednesday next week to secure the bailout.
Varoufakis was dubbed “the rock star finance minister’ by the media as took the world by storm during the Greek debt negotiations”.