NEWS

Supreme Court forwards suits against Varoufakis to Parliament

TAGS: Politics

Two suits filed against Yanis Varoufakis by private citizens have been forwarded by the Supreme Court to Parliament, which must decide whether the former finance minister’s immunity should be lifted so he can stand trial.

The suits were filed by Apostolos Gletsos, the mayor of Stylida in central Greece and head of the Teleia party, and Panayiotis Giannopoulos, a lawyer.

The legal action was taken before the finance minister's latest revelations about his attempts to set up a parallel payment system.

Varoufakis defended his actions in an op-ed in the Financial Times on Tuesday, arguing that he was trying to create a scheme to overcome the country's liquidity shortage in the absence of a central bank that could perform this role.

"Given the absence of a central bank to support the state’s endeavours, the Greek government’s arrears to the private sector (individuals and companies) have been perpetually deflationary since 2008," argued the finance minister.

"Indeed, arrears — due to significantly delayed returns from value added and income tax, and payments to suppliers — consistently exceeded 3 per cent of gross domestic product for five years. Meanwhile, a feedback effect boosts tax arrears which, in turn, reinforce the cycle of generalised illiquidity."

Varoufakis explained how the system would work. "Our simple idea was to allow for multilateral cancellation of arrears between the state and the private sector using the tax office’s existing web-based payments platform," he wrote.

"A reserve account could be created per tax file number on the tax office’s web interface and be credited with arrears owed by the state to that individual or organisation. Tax file number holders would be able to transfer credits from their reserve account either to the state (in lieu of tax payments) or to any other tax file number reserve account."

The ex-finance minister argued that the media was too focussed on his "unorthodox means" for setting up this scheme, which included hacking in to Greece's tax system.

"There is a hideous restriction of national sovereignty imposed by the troika of lenders upon Greek ministers who are denied access to departments of their ministries pivotal in implementing innovative policies," he wrote.

"When sovereignty loss, due to unsustainable official debt, yields suboptimal policies in already stressed nations, one knows that there is something rotten in the euro’s kingdom."

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