Yanis Varoufakis, Greek finance minister, denies giving the finger to Germany

Greek Finance Minister YanisVaroufakis tangled yet again with Berlinon Mondayafter Germantelevision aired a 2013 video purportedly showing him making arude gesture toward Europe's economic powerhouse.

Varoufakis denied brandishing his middle finger known inGermany as the "Stinkefinger" during a lecture in Croatia where he said Greece should have defaulted in 2010 rather than accept a multi-billion euro bailout package.

"The video was faked, without doubt," he told German news magazine Der Spiegel's online versionon Monday.

German public broadcaster ARD, which showed the video onSunday, said it had seen "no sign of manipulation" but wouldhave experts check it.

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Varoufakis has regularly traded barbs with Germany,especially with his irascible counterpart Wolfgang Schaeuble,since the leftist Syriza party took power in January pledging toend austerity and renegotiate the bailout terms.

Athens has also urged Germany to pay reparations for thewartime Nazi occupation of Greece, a demand Berlin has rejected.

"My proposal was that Greece should simply announce that itis defaulting ... and stick the finger to Germany and say'youcan now solve this problem by yourself'," Varoufakis says on the video, raising his middle finger.

Confronted with the video, Varoufakis told ARD: "I have never given the finger ever."

Appearing on the same show, Bavaria's state finance ministerMarkusSoeder said straight out that Varoufakis was lying.

"It is getting more and more difficult to accept Mr.Varoufakis as a serious partner in negotiations," he told theonline version of business daily Handelsblatt.

A Marxist economist, Varoufakis has surprised many Europeancapitals with his unconventional approach, appearing to questionGreece's commitment to honour past pledges in interviews.

He also raised eyebrows by appearing in the glossy Frenchmagazine Paris Match, enjoying a meal with his wife on theterrace of their upmarket flat overlooking the Acropolis aprime location in Athens.

Varoufakis later said he regretted thephotoshoot but notthe interview. There was little reaction in Greece, whereunemployment has soared above 25 per cent and output tumbledduring recent years of budget rigour.

Chancellor Angela Merkel's spokesman denied last week any"personal feud" with Athens existed, but Berlin's patience isclearly running out. Schaeuble said last week he could not ruleout an accidental Greek exit from the single European currency.

Last week Athens complained to Berlin, saying Schaeuble hadinsulted Varoufakis at a news conference. The German ministerdenied the accusation.