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What Was Plan B for Greece?

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Plan B for Greece

What Was Plan B for Greece?

July 30 2015, 09.26am GMT


Controversial former Greek Finance Minister, Yanis Varoufakis, who issued a statement at the time of his resignation, is back in the spotlight.

At the time, Varoufakis, stated, “I was made aware of a certain preference by some European participants ...for my….absence from its meetings; an idea that the prime minister judged to be potentially helpful to him in reaching an agreement”.

The emergence of a secret tape of a call held between Varoufakis and a group of hedge fund representatives reveals that he had a secret “Plan B” for Greece. The implementation of the plan was to be triggered in the event of the European Central Bank (ECB) cutting off emergency lending to the Greek banks, which eventually happened.

The plan would have resulted in the creation of a parallel banking system in Greece to circumvent the ECB action and to prepare for a return to the Drachma.

Varoufakis had adopted a confrontational approach and was the most vocal opponent of the austerity program insisted on by the lenders, an attitude that led to the stalemate in negotiations prior to the Greek referendum. He was a proponent of using the threat of a Greek exit from the eurozone as a bargaining tool to try and force better bailout terms from the lenders.

This approach did not receive backing from a majority of the six man inner cabinet which left Varoufakis in the cold and with no choice other than to resign as Finance Minister.

The secret discussion, which has now become public knowledge, took place on 16 July during which he discloses how he authorized a friend to hack into the Greek finance ministry’s software. He admonishes the listeners, saying, “You can't tell anyone that.” “This is totally between us.” “And if [someone does] I will deny it”, Varoufakis adds.

Varoufakis claims that the revenue service Director is an appointee of the EU and was not subject to his ministerial authority which meant his friend had to hack into the revenue service data base.

The plan was the creation of parallel accounts for all taxpayers which would then become effective banking accounts allowing for funds transfers in the event of a general bank closure, as eventually happened.

He claims in the discussion that Prime Minister Tsipras had authorized him to prepare the plan in the event of no settlement being achieved with the lenders. The plan, once implemented in euros, meant that it could convert into the Drachma at the drop of a hat.

Varoufakis believes that German Finance Minister Wolfgang Schaeuble has a plan to get Greece out of the euro describing Schauble as being “hell-bent on effecting a Grexit” as a part of his plan on proving that the euro is not sustainable.

This, according to Varoufakis, is all part of the German efforts to remove the European budgetary making process from France to Brussels.

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