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Secret agents of Tsipras were tasked to introduce a parallel Greek currency

24 January 2016 / 20:01:48  GRReporter
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A string of alternative scenarios were tossed about among the first SYRIZA government. As revealed by Kathimerini, Alexis Tsipras appointed a secret group for special missions. Among these missions were the negotiations with Moscow for the opening of a credit line: they were held with the knowledge of Panagiotis Lafazanis, but Yannis Varoufakis was kept out of it. The group was also deliberating how the government could live up to its commitments (e.g. salaries, pensions) if the negotiations failed.

Varoufakis has offered the introduction of a parallel payments system multiple times. However, his plans have been rejected. There was fear of an explosive backlash, especially from pensioners, if paid with IOUs or, even worse, with credits in a parallel electronic system. Thus, the idea of resorting to the euro reserves – kept at the Mint and unauthorised for use by the European Central Bank – was tentatively preferred.

Furthermore, actions were taken to prepare the country for a new currency. Two trips were carried out to two different continents, for meetings with companies working in the field of currency issue. The trips made it clear that at least a month was needed from the time of order to the start of the new currency's circulation. Missions were also dispatched to Latin American countries to conclude agreements for the supply of fuel, beef and drugs. But the people involved with these contacts all the way to the week before the referendum, realized that the prime minister did not intend to implement any of these plans. He was rattled by two things:the potential resignation of key cabinet ministers who could form a coalition government without him, and the likelihood of social unrest.

Despite his heroic tweets on Sunday, June 28, touting the Greek government's rejection of capital controls, Varoufakis already knew at that stage that controls were inevitable. Banks would have literally died if they had opened on Monday because of the panic-triggered run on them in the aftermath of the referendum. Dragasakis and Tsakalotos had already agreed to the imposition of capital controls during their visit to Mario Draghi a day earlier, said Dragasakis himself to Kathimerini.

At the Systemic Stability Council meeting that same afternoon, Varoufakis was prone to cooperate and in a good mood. He commented that capital controls had a positive side as they would bolster plastic use. The meeting ended around 20:00, with the main points of the legal act ready. But Yannis Stournaras was informed about the Council's decisions at only five minutes to midnight when the ECB-set deadline was expiring. Drastic measures were threatened thereafter.

Meanwhile, Varoufakis arrived at the government headquarters, where he was met by collective fire. Tsipras became infuriated when he learnt that the adopted legislation on capital controls had no provision on how much retirees can withdraw per week. For many of those present this was proof of Varoufakis' flippancy in dealing with the situation.

In an interview for SKAI, Varoufakis himself argues that at the meeting in question he had presented the measures which would allegedly force the Europeans to compromise, i.e. to succumb to the restructuring of the ECB-owned government bonds as well as to the introduction of a parallel electronic payment system and putting control back into the hands of the Bank of Greece. According to the former finance minister, one of those who attacked him at that meeting was deputy PM Dragasakis who eventually managed to get the prime minister on his side.

According to Dragasakis however, what Varoufakis did at the government meeting that night was to simply reiterate his ideas once again, while claiming that they could not be implemented because there was no adequate preparation and the consequences would be catastrophic. "I had already said this, and repeated it during those days, that the extension of the period without an agreement would force us to turn again to the IMF because we had no currency for imports," adds Dragasakis and accuses Varoufakis of trying to rewrite history.

Tags: Alexis Tsipras Yannis Varoufakis parallel currency negotiations capital controls
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