Yanis Varoufakis was instructed last year by Prime Minister Alexis Tsipras to put together a small team of people to draw up a plan for introducing a parallel currency if Greece was unable to reach an agreement with its lenders on a new bailout, the ex-finance minister said in a TV interview late Tuesday.
Speaking on Skai TV’s “Istories” (Stories) program, Varoufakis outlined what was known as Plan X. He said that a small team of about six people examined the various parameters surrounding a potential standoff that would lead to Greece being unable to meet its obligations. Among the issues examined by Varoufakis and his advisers were how the country would continue to have access to medicines, fuel and food under such circumstances.
Varoufakis said that he advised Tsipras to put the plan, which would see Greece defaulting on 27 billion euros in Greek government bonds held by the European Central Bank, into action as soon as he called a referendum at the end of June.
“I thought that if we did what we had decided as a negotiating team… and announced that we would restructure these bonds and implement the parallel payment system, then by the Monday, Tuesday or Wednesday before the referendum the discussion we expected between [ECB president Mario] Draghi and [German Chancellor Angela] Merkel would take place,” he said.
Varoufakis said that Tsipras considered adopting Plan X but that he was advised against it by Deputy Prime Minister Yiannis Dragasakis.
“The prime minister thought about it very carefully,” said the ex-minister. “I saw him puzzle over what he should do and in the end he decided to follow Dragasakis’s recommendation and not mine.”
Varoufakis added that he was against efforts to secure funding from Russia but that there had been an agreement with China regarding investment in Greece, including in Greek bonds. “This agreement was overturned, though, with a phone call from Berlin,” he claimed.
The outspoken economist said that he became frustrated with Tsipras when the prime minister agreed to a primary surplus target of 3.5 percent of GDP for the coming years, saying that he thought this goal was “macroeconomically impossible.” Tsipras told him that he agreed in return for receiving debt relief.
“It’s true I don’t have a lot of hair but when I heard this I started pulling out what little I have left,” he said.
Varoufakis admitted that he “failed” during his time in office. “I carry a great responsibility,” he said. “I would do a lot of things differently.”