Since resigning his position as finance minister following the conclusion of the ‘agreekment’ between Greece and its creditors, Yanis Varoufakis has never been far from the headlines. He’s given a series of candid interviews with the inside story of the negotiations he played a central part in, suggesting that Germany controlled Eurogroup completely, and that Greece was ‘set up’. This weekend a recording of a conversation has leaked in which he describes in some detail a working group that he oversaw that was mandated to come up with a contingency plan.
Since the Eurosummit that concluded 12 July, the media has indulged in much criticism of the Greek government’s ‘brinkmanship’ during the negotiations given that the end game has resulted in capitulation to the creditors demands anyway. The lack of a ‘plan B’ was widely criticised. Now the details of just such a plan have emerged. You can listen to the call using the playback button above, and the Financial Times has a full transcript of the call here.
Statement by the Office of Yanis Varoufakis, former Minister of Finance, Member of Parliament, Hellenic Republic
During the Greek government’s negotiations with the Eurogroup, Minister Varoufakis oversaw a Working Group with a remit to prepare contingency plans against the creditors’ efforts to undermine the Greek government and in view of forces at work within the Eurozone to have Greece expelled from the euro. The Working Group was convened by the Minister, at the behest of the Prime Minister, and was coordinated by Professor James K. Galbraith.
It is worth noting that, prior to Mr Varoufakis’ comfirmation of the existence of the said Working Group, the Minister was criticized widely for having neglected to make such contingency plans. The Bank of Greece, the ECB, treasuries of EU member-states, banks, international organisations etc. had all drawn up such plans since 2012. Greece’s Ministry of Finance would have been remiss had it made no attempt to draw up contingency plans.
Ever since Mr Varoufakis announced the existence of the Working Group, the media have indulged in far-fetched articles that damage the quality of public debate. The Ministry of Finance’s Working Group worked exclusively within the framework of government policy and its recommendations were always aimed at serving the public interest, at respecting the laws of the land, and at keeping the country in the Eurozone.
Regarding the recent article by “Kathimerini” newspaper entitled “Plan B involving highjacking and hacking”, Kathimerini’s failure to contact Mr Varoufakis for comment and its reporter’s erroneous references to “highjacking tax file numbers of all taxpayers” sowed confusion and contributed to the media-induced disinformation. The article refers to the Ministry’s project as described by Minister Varoufakis in his 6th July farewell speech during the handover ceremony in the Ministry of Finance. In that speech Mr Varoufakis clearly stated: “The General Secretariat of Information Systems had begun investigating means by which Taxisnet (Nb. the Ministry’s Tax Web Interface) could become something more than it currently is, to become a payments system for third parties, a system that improves efficiency and minimises the arrears of the state to citizens and vice versa.” That project was not part of the Working Group’s remit, was presented in full by Minister Varoufakis to Cabinet, and should, in Minister Varoufakis’ view, be implemented independently of the negotiations with Greece’s creditors, as it will contribute considerable efficiency gains in transactions between the state and taxpayers as well as between taxpayers.
In conclusion, during the five months of negotiations that gripped Europe and changed the debate throughout the Continent, the Ministry of Finance did everything possible to serve the public interest against many odds. The current media campaign to besmirch these efforts will fail to dent the legacy of a crucial five month struggle for democracy and common sense.
The coordinator of the working group, economist Professor James K. Galbraith’s statement seeks to clarify the mandate and scope of the work:
I spent five months from early February through early July in close association with the Greek Finance Minister, Yanis Varoufakis, and was part of the Working Group that did contingency planning for potential attempts to asphyxiate the Greek government, including aggressive moves to force the country out of the euro. Since a great deal of public confusion has now arisen over this effort, the following should be stated:
(1) At no time was the Working Group engaged in advocating exit or any policy choice. The job was strictly to study the operational issues that would arise if Greece were forced to issue scrip or if it were forced out of the euro.
(2) The group operated under the axiom that the government was fully committed to negotiating within the euro, and took extreme precautions not to jeopardize that commitment by allowing any hint of our work to reach the outside world. There were no leaks whatever, until the existence of the group was disclosed by the former Finance Minister himself, in response to criticism that his ministry had made no contingency plans when it was known that forces within the Eurozone were planning the forced exit of Greece.
(3) The existence of preliminary plans could not play any role in the Greek negotiating position, since their circulation (before there was a need to implement them) would have destabilized government policy.
(4) Apart from one late, inconclusive telephone conversation between MP Costas Lapavitsas and myself, we had no coordination with the Left Platform and our Working Group’s ideas had little in common with theirs.
(5) Our work ended for practical purposes in early May, with a long memorandum outlining major issues and scenaria that we studied.
(6) My work in this area was unpaid and unofficial, based on my friendship with Yanis Varoufakis and on my respect for the cause of the Greek people.