COMMENT

Galbraith says critics have it all wrong over 'Plan X'

YANNIS PALAIOLOGOS

TAGS: Politics, Economy

University of Texas professor James Galbraith, a close associate of Yanis Varoufakis, has urged the 23 US-educated Greeks who recently criticized him for his part in last year’s negotiations with Greece’s creditors to read his book. Galbraith’s response came in the form of a letter to Kathimerini, which had published a story on July 29 on the letter from the 23 academics, addressed to the president of the University of Texas.

In his own letter, Galbraith mentions the fact that his critics say they learned of his work as head of the team that worked on the so-called “Plan X” from interviews in the Greek press and excerpts of the Greek translation of his book, “Welcome to the Poisoned Chalice” (Yale University Press). He asks why, given their knowledge of English, they did not read the original: “Had they done so, they would have found that the allegations they made are factually false.”

Galbraith characterizes Plan X as “preliminary,” admitting that “the work of a small team cannot fully prepare for such a dramatic event.” He repeats that it would only have been activated if the Europeans had carried out their threat to cut off emergency liquidity via the European Central Bank to Greek banks. “This would have triggered a forced exit of Greece from the euro, against the will of the government,” he notes. “The threat had been delivered by the president of the Eurogroup, Jeroen Dijsselbloem, in late January,” he adds, mentioning also the suggestion by German Finance Minister Wolfgang Schaeuble that Greece take a “holiday from the euro.”

Galbraith further rejects the claim made by the 23 that his plan constituted a “monetary-cum-military coup d’etat” and that it would involve “mobilizing the Greek armed forces to suppress possible civil disorder.” “We did not suggest using the military inappropriately or outside the Constitution. The only use of the word ‘mobilization’ in my book refers to the civil service.” He also denies that the plan included a plot to arrest the governor of the central bank.

The memo on Plan X, as Galbraith repeats in his letter, “was prepared at the request of the prime minister” and “at no time was the working group engaged in advocating exit or any policy choice. 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.”

Finally, Galbraith responds to claims in the letter from the 23 that he regretted the non-activation of Plan X. “This claim also is false,” he writes, making reference to his interview with Kathimerini on July 6, 2016, in which he had stated that “we were preparing for a scenario that everyone hoped to avoid.”

In closing, Varoufakis’s associate and friend notes: “The letter [from the 23] concludes that ‘academic freedom must be consistent with ethical conduct and fundamental democratic norms.’ Here we agree. One of the norms of ethical conduct is to refrain from false and defamatory accusations, based partly on inflammatory and evidently unreliable press reports.”

Questions, of course, remain. What role did Galbraith envisage for the army in the transition to the drachma, if not the preservation of public order (as he himself has written in his book), and how would it carry out its mission? In order to prevent a descent into wholesale disorder, would it have been necessary to curtail civil freedoms and to impose other anti-democratic measures? And since he admits that the plan was only preliminary, weren’t Varoufakis’s proposals to Alexis Tsipras at the end of June 2015 criminally reckless, given that they would almost certainly have led to its activation?

These questions – and many others – can only be answered by the publication of Plan X. Perhaps the only thing that will then remain unanswered is what qualified professor Galbraith – other than his friendship with the minister – to take on such a sensitive national matter.

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