Gal­braith sheds light on con­tin­gency plan

Kathimerini English - - Front Page -

Plans by for­mer Fi­nance Min­is­ter Yanis Varoufakis for hack­ing Greek taxpayers’ online codes and set­ting up a par­al­lel bank­ing sys­tem were made with­out con­sult­ing the work­ing group be­ing over­seen by Varoufakis who also ig­nored the ad­vice of in­de­pen­dent ex­perts on the dra­matic reper­cus­sions of tak­ing rad­i­cal ac­tion, Kathimerini un­der­stands.

Ac­cord­ing to economist James K. Gal­braith, the co­or­di­na­tor of a work­ing group set up by Varoufakis at the be­hest of Prime Min­is­ter Alexis Tsipras, the team con­cluded its de­lib­er­a­tions in early May, sev­eral weeks be­fore a ref­er­en­dum on pro­pos­als by Greece’s cred­i­tors. Varoufakis, how­ever, in a state­ment on July 27, fol­low­ing the leak by Kathimerini of his plans to set up a par­al­lel bank­ing sys­tem, said the group con­tin­ued its work “un­til the day of the ref­er­en­dum,” on July 5.

Gal­braith told Kathimerini that the group “summed up our work and pre­sented it to the fi­nance min­is­ter,” in early May. Asked whether Varoufakis showed the sum­mary to Tsipras, Gal­braith said he did not know. Gal­braith also said Varoufakis did not con­sult the work­ing group be­fore propos­ing to Tsipras a set of rad­i­cal ac­tions just hours be­fore a de­ci­sion to im­pose cap­i­tal con­trols.

Gal­braith has said that the idea of ac­cess­ing the data of the Gen­eral Sec­re­tar­iat for Public Rev­enues was not one that emerged in the work­ing group. He told Kathimerini that the idea of a par­al­lel pay­ment sys­tem was not linked to an exit from the eu­ro­zone and would sim­ply be a more ef­fi­cient way of off­set­ting debts be­tween the state and third par­ties.

“The gov­ern­ment faced a choice be­tween a tough line and a strat­egy of con­ces­sions, both of them en­tirely within the euro... a tougher line would not have led in­eluctably out of the euro,” he said. “We took note of many prob­lems,” he added.

Varoufakis also ig­nored the ad­vice of Lazard, a con­sul­tancy firm which ad­vised him against him na­tion­al­iz­ing the Bank of Greece and against other pre­cur­sors for a re­turn to the drachma, Kathimerini has learned. Lazard sent its ad­vice to Varoufakis in writ­ing on June 27, a cou­ple of days be­fore the de­ci­sion to close Greek banks.

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