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New Details Emerge About Greek Plan for Parallel Payment System and Varoufakis’ Resignation

Op-ed - New Details Emerge About Greek Plan for Parallel Payment System and Varoufakis’ Resignation

Earlier in July, Bitcoin Magazinereported that former Greek finance minister Yanis Varoufakis, who resigned after the Greek referendum on July 5, expressed his disappointment with the outcome of the Greek crisis.

Now Kathimerini, a New York Times-branded daily newspaper published in Athens and distributed with the International New York Times in Greece and Cyprus, reveals that Varoufakis was authorized by Greece’s Prime Minister Alexis Tsipras last December to look into a parallel payment system that could eventually work as a parallel banking system.

Before becoming Finance Minister, Varoufakis proposed a parallel IOU-based currency, dubbed Future Tax Coin (FT-Coin), similar to a cryptocurrency in some aspects. Varoufakis is not impressed by bitcoin as a currency, but he is persuaded that its underlying technology could be put to effective use in troubled economies.

In a teleconference call with international financial operators, Varoufakis claimed to have been given the OK by Tsipras to plan a payment system that could operate in euros but which could be changed into drachmas “overnight” if necessary, according to Kathimerini ‘s interpretation. Kathimerini obtained a transcript of the call, which took place on July 16, a week after Varoufakis’ resignation.

The planned parallel payment system would launch if banks were forced to close and would allow payments to be made between third parties and the state. The plan’s implementation would require the tax registration numbers of taxpayers, available from the General Secretariat of Public Revenues website, which is monitored by Greece’s creditors.

“The General Secretary of Public Revenues within my ministry is controlled fully and directly by the troika. It was not under control of my ministry, of me as minister; it was controlled by Brussels,” said Varoufakis.

The plan required hacking into the system to get the taxpayer registration numbers. To avoid alerting Greece’s creditors, which monitor the system, Varoufakis assigned a childhood friend of his, an information technology expert who became a professor at Columbia University, to perform the hack.

“I think the Greek people had authorized us to pursue energetically and vigorously that negotiation to the point of saying that if we can’t have a viable agreement, then we should consider getting out,” said Varoufakis in the call, referring to the results of the July 5 referendum in Greece.

“The prime minister before he became P.M., before we won the election in January, had given me the green light to come up with a Plan B,” said Varoufakis. “[T]he difficulty was to go from the five people who were planning it to the 1,000 people that would have to implement it. For that I would have to receive another authorization which never came.”

“[W]hen the time [for the authorization] came [Tsipras] realized that it was just too difficult,” Varoufakis told The Telegraph. “I don’t know when he reached that decision. I only learned explicitly on the night of the referendum, and that is why I offered to resign.”

According to The Telegraph, Varoufakis wanted to seize on the momentum of a landslide victory in the vote but was overruled.

In related news reported by Reuters, former Greek Energy Minister Panagiotis Lafazanis said he had urged the government to tap the reserves of the Bank of Greece in defiance of the European Central Bank and argued for a return to the drachma. “The main reason for that was for the Greek economy and Greek people to survive, which is the utmost duty every government has under the constitution,” he said.

The most disturbing part of Varoufakis’ call transcript is where the former finance minister hints at a plan to strip European countries of their financial sovereignty.

“[German finance minister Wolfgang Schauble] said explicitly to me that a Grexit is going to equip him with sufficient bargaining, sufficient terrorizing power in order to impose upon the French that which Paris has been resisting,” said Varoufakis. “And what is that? A degree of transfer of budget-making powers from Paris to Brussels.”