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 system.
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" .
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 system.
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 before premier Alexis Tsipras gave in to demands from Europe's creditor powers, acknowledging that his own cabinet would not support such a dangerous confrontation.
Yanis Varoufakis, 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 financial system,as it in fact did after talks broke down and Syriza called a referendum.
The
transcripts were leaked to the Greek newspaper Kathimerini. The
telephone call took place a week after he stepped down as finance
minister.
"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," he said.
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 transcripts.
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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