Grexit plan ‘without telling anyone’

Yanis Varoufakis divulged the details on how Greece could sneak out of the euro “without telling anyone”.

With a plan to secretly append a new bank account to each citizen or company’s tax number, Greek officials wargamed the creation of a parallel system, according to the former finance minister.

Varoufakis’ resignation, 10 days before he made the comments on a call with investors on July 16, leaves open the question of whether the contingency plans have been torn up or just shelved.

Since then, Greece has managed to win some reprieve from the threat of default by agreeing to austerity measures with creditors that the former minister opposed.

That said, with prime minister Alexis Tsipras’ parliamentary majority dwindling, stalling implementation could herald the return of euro-exit talk before long.

“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,” James K Galbraith, a professor at the University of Texas and a member of the finance ministry’s contingency plan, said. “At no time was the working group engaged in advocating exit or any policy choice.”

The system was designed to be euro denominated “but at the drop of a hat it could be converted to a new drachma,” Varoufakis said.

Technical experts from the troika are slated to begin talks with their counterparts on policies that Greece must implement over the next three years, in return for loans of as much as €86bn.

“More reforms are expected as part of the statement from the Greek authorities to allow for a swift disbursement of the European Stability Mechanism and also this is what is being discussed right now,” said EU Commission spokeswoman Mina Andreeva.

Greece has already complied with all of its prior commitments, the Greek finance ministry told reporters.

Varoufakis spoke on a conference call organised by the Official Monetary and Financial Institutions Forum. The London-based body released a recording of the call after Greek newspaper Kathimerini reported its contents. “We were planning to create, surreptitiously, reserve accounts attached to every tax file number, without telling anyone, just to have this system in a function under wraps,” Varoufakis said in the recording.

He added that the group’s work was authorised by Tsipras, although had never been ordered to be put into action. A statement released by Varoufakis’ parliamentary office said the ministry “would have been remiss” if it hadn’t had contingency plans in place. The statement said the tax-number plans mentioned were “not part of the working group’s remit.”

Greek banks remain under capital controls four weeks after Tsipras called a referendum on a bailout plan. After voters delivered a resounding no, Tsipras agreed to a plan on similar terms under pressure of financial collapse.