Grexit choice explored last year but Tsipras was not convinced

Grexit choice explored last year but Tsipras was not convinced

Before reaching an agreement with lenders last July, the SYRIZA-led government explored a number of options regarding alternative sources of funding and even actively examined the logistics of printing a new currency. But no formal plan for leaving the euro was ever drawn up, as Prime Minister Alexis Tsipras, feared the political consequences for himself as well as the wider social upheaval that it would cause.

Reacting to claims by ex-finance minister Yanis Varoufakis in a recent interview with Skai TV, Deputy Prime Minister Yiannis Dragasakis and former energy minister Panayiotis Lafazanis, who led SYRIZA’s radical Left Platform at the time, but is now leader of Popular Unity, gave a different interpretation of what happened during the tense period last year.

Both Dragasakis and Lafazanis denied Varoufakis’s claim that there had been a “war council” meeting under Tsipras on Sunday, June 28, after capital controls were announced and a week before the referendum on the third bailout. Varoufakis claimed that his proposal to announce the following day that Greece would default on the Greek bonds held by the European Central Bank and introduce a parallel payment system was rejected by 6 votes to 2.

“There is an attempt by some people to rewrite history,” said Dragasakis.

Lafazanis also denied taking part in such a meeting.

“That is no way for a government to take decisions, especially ones that carries so much weight,” he said.

Dragasakis said that Varoufakis repeated ideas he had put forward before but admitted himself that “they could not be implemented because the necessary preparations had not been made and the consequences would be catastrophic.”

“I had said, and I repeated it during those days in June, that prolonging the period without an agreement would force us to turn to the International Monetary Fund again as we would not have the foreign currency reserves needed to make imports,” said Dragasakis.

The deputy prime minister insisted that no alternative formal plan had been drawn up, despite Varoufakis referring to a Plan X in his Skai TV interview.

“There was no Plan B, X or anything else from Varoufakis,” said Dragasakis. “I had asked for a report from him. He said he would send me 60 pages. He never sent them to me.”

“I knew of no Varoufakis plan,” said Lafazanis. “All I know is that whenever I referred to the need to follow an alternative route, whenever I said that SYRIZA’s radical program can only be implemented with a national currency, there was great nervousness, even panic.”

He stressed that even during the week leading up to the referendum, when it looked liked the “No” campaign had a chance of winning, Tsipras did not contemplate Grexit as an option. “He was not open to the idea of a national currency,” said the ex-minister.

Nevertheless, Kathimerini understands that the government had explored the possibility of printing a new currency. Members of a secret team set up by the Prime Minister had visited two firms abroad capable of taking on the task and were informed that they would have to provide a month’s notice before they could receive new banknotes and coins.

There were also missions to Latin American countries to secure agreements for the supply of fuel, beef and medicines should Greece not be in a position to import them, sources said.

Lafazanis said that he tried to secure an agreement with Russia on the Turkish Stream gas pipeline partly so that the government could use the proceeds as an alternative source of funding. Dragasakis talked about his discussions with the Chinese government, during his visit to Beijing in March, regarding the possibility of China buying Greek bonds or offering development loans.

Varoufakis claimed that an agreement had been reached with China for the purchase of Greek bonds but that this was nixed by Berlin. Dragasakis said he was not aware of such a development.