Varoufakis Reveals Cloak and
Dagger 'Plan B' for Greece, Awaits Treason Charges
Former Greek finance minister Yanis Varoufakis claims he was
authorised by Alexis Tsipras to look into a parallel payment system.
Yanis Varoufakis claims he had approval to plan a parallel banking
By Ambrose Evans-Pritchard
A secret cell at the Greek finance ministry hacked into the
government computers and drew up elaborate plans for a system of
parallel payments that could be switched from euros to the drachma
at the "flick of a button" .
The revelations have caused a political storm in Greece and
confirm just how close the country came to drastic measures
Alexis Tsipras gave in to demands from Europe's creditor
powers, acknowledging that his own cabinet would not support
such a dangerous confrontation.
the former finance minister, told a group of investors in
London that a five-man team under his control had been working
for months on a contingency plan to create euro liquidity if the
European Central Bank cut off emergency funding to the Greek
as it in fact did after talks broke down and Syriza called a
The transcripts were leaked to the Greek newspaper Kathimerini.
The telephone call took place a week after he stepped down as
"The prime minister, before we won the election in January, had
given me the green light to come up with a Plan B. And I
assembled a very able team, a small team as it had to be because
that had to be kept completely under wraps for obvious reasons,"
Yanis Varoufakis (right), Greece's former finance
minister, with Prime Minister Alexis Tsipras
Mr Varoufakis recruited a technology specialist from Columbia
University to help handle the logistics. Faced with a wall of
obstacles, the expert broke into the software systems of the tax
office - then under the control of the EU-IMF 'Troika' - in
order to obtain the reserve accounts and file numbers of every
taxpayer. "We decided to hack into my ministry’s own software
programme," he said.
The revelations were made to a group of sovereign wealth
funds, pension funds, and life insurers - many from Asia -
hosted as part of a "Greek day" on July 16 by the Official
Monetary and Financial Institutions Forum (OMFIF).
Mr Varoufakis told the Telegraph that the quotes were
accurate but some reports in the Greek press had been twisted,
making it look as if he had been plotting a return to the
drachma from the start.
"The context of all this is that they want to present me as a
rogue finance minister, and have me indicted for treason. It is
all part of an attempt to annul the first five months of this
government and put it in the dustbin of history," he said.
"It totally distorts my purpose for wanting parallel
liquidity. I have always been completely against dismantling the
euro because we never know what dark forces that might unleash
in Europe," he said.
The goal of the computer hacking was to enable the finance
ministry to make digital transfers at "the touch of a button".
The payments would be 'IOUs' based on an experiment by
California after the Lehman crisis.
A parallel banking system of this kind would allow the
government to create euro liquidity and circumvent what Syriza
called "financial strangulation" by the ECB.
"This was very well developed. Very soon we could have
extended it, using apps on smartphones, and it could become a
functioning parallel system. Of course this would be euro
denominated but at the drop of a hat it could be converted to a new
drachma,” he said.
Mr Varoufakis claimed the cloak and dagger methods were necessary
since the Troika had taken charge of the public revenue office
within the finance ministry. "It’s like the Inland Revenue in the UK
being controlled by Brussels. I am sure as you are hearing these
words your hair is standing on end,” he said in the leaked
Mr Varoufakis said any request for permission would have tipped
off the Troika immediately that he was planning a counter-attack. He
was ready to activate the mechanism the moment he received a "green
light" from the prime minister, but the permission never came.
"I always told Tsipras that it will not be plain sailing but this
is the price you have to pay for liberty," he told the Telegraph.
"But when the time came he realised that it was just too
difficult. I don't know when he reached that decision. I only
learned explicitly on the night of the referendum, and that is why I
offered to resign," he said. Mr Varoufakis wanted to seize on the
momentum of a landslide victory in the vote but was overruled.
He insisted that his purpose has always been to go on the legal
and financial offensive within the eurozone - placing the eurozone
creditors in a position where they would be acting outside EU treaty
law if they forced Grexit - but nevertheless suggested Syriza did
have a mandate to contemplate more radical steps if all else failed.
"I think the Greek people had authorised us to pursue
energetically and vigorously that negotiation to the point of saying
that if we can’t have a viable agreement, then we should consider
getting out," he said in the tape.
"Schauble believes that the eurozone is not sustainable as it is.
He believes there has to be some fiscal transfers, some degree of
political union. He believes that for that political union to work
without federation, without the legitimacy that a properly elected
federal parliament can render, can bestow upon an executive, it will
have to be done in a very disciplinary way,"
"And he said explicitly to me that a Grexit is going to equip him
with sufficient terrorising power in order to impose upon the
French, that which Paris has been resisting: a degree of transfer of
budget making powers from Paris to Brussels."
Mr Varoufakis told the Telegraph that the Mr Schauble has
made up his mind that Greece must be ejected from the euro, and is
merely biding his time, knowing that the latest bail-out plan is
doomed to failure.
"Everybody knows the International Monetary Fund does not want to
take part in a new programme but Schauble is insisting that it does
as a condition for new loans. I have a strong suspicion that there
will be no deal on August 20," he said.
He said the EU authorities may have to dip further into the
European Commission's stabilisation fund (EFSM), drawing Britain
deeper into the controversy since it is a contributor. By the end of
the year it will be clear that tax revenues are falling badly short
of targets - he said - and the Greek public ratio will be shooting
up towards 210pc of GDP.
"Schauble will then say it is yet another failure. He is just
stringing us along. He has not given up his plan to push Greece out
of the euro," he said.
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