Tsipras admits secret plans to handle euro exit

He denies plot to return to drachma after revelations of bid to create parallel system

ATHENS • Prime Minister Alexis Tsipras has acknowledged his government made covert contingency plans in case Greece was forced out of the euro, but rejected accusations that he had plotted to take the country back to the drachma.

Mr Tsipras was forced to respond to the issue in Parliament yesterday after former finance minister Yanis Varoufakis this week revealed efforts to hack into citizens' tax codes to create a parallel payment system, prompting shock and outrage in Greece.

The disclosure heaped new pressure on Mr Tsipras, who is also battling a rebellion within his Syriza party and starting tough talks with Greece's creditors to seal a third bailout programme in less than three weeks.

"We didn't design or have a plan to pull the country out of the euro, but we did have emergency plans," Mr Tsipras told Parliament.

"If our partners and lenders had prepared a Grexit plan, shouldn't we as a government have prepared our defence?"

JUST A CONTINGENCY MEASURE

We didn't design or have a plan to pull the country out of the euro, but we did have emergency plans. If our partners and lenders had prepared a Grexit plan, shouldn't we as a government have prepared our defence?

GREEK PRIME MINISTER ALEXIS TSIPRAS, after former finance minister Yanis Varoufakis revealed efforts to hack into citizens' tax codes to create a parallel payment system

He compared the plan to a country preparing its defences ahead of war, saying it was the obligation of a responsible government to have contingency plans in place.

He did not directly refer to Dr Varoufakis' disclosure of plans to hack into his ministry's software to obtain tax codes, but said that the idea of a database giving Greeks passwords to make payments to settle arrears was hardly "a covert and satanic plan to take the country out of the euro".

An economist with unorthodox ideas about the euro and Greece's debt restructuring, Dr Varoufakis has been served with private lawsuits for allegedly plotting in secret to take the country out of the euro.

The Supreme Court has forwarded the case to Parliament, which has the sole power to determine whether Dr Varoufakis, as a government lawmaker and former minister, can be formally charged.

Dr Varoufakis last month told a meeting of hedge fund investors that he had been planning a parallel system of liquidity that could have been converted to a "new" drachma "at the drop of a hat".

He added that on his orders, a small team had "hacked" into the tax registry to create duplicate tax codes for millions of Greeks, in preparation for the plan.

But Mr Tsipras has defended his embattled former finance minister, who has continued to create headaches for the government since being ousted earlier last month.

"Mr Varoufakis might have made mistakes, as all of us have... You can blame him as much as you want for his political plan, his statements, for his taste in shirts, for vacations in Aegina," Mr Tsipras said.

"But you cannot accuse him of stealing the money of Greek people or having a covert plan to take Greece to the precipice."

Mr Tsipras' comments came as Greece began talks with the mission chiefs of the quartet of creditors - the European Commission, European Central Bank (ECB), International Monetary Fund (IMF) and the European bailout fund - to nail down a third bailout of up to €86 billion (S$129 billion).

The meeting with Greece's finance and economy ministers got under way at a hotel in central Athens rather than at government ministries, part of efforts to keep the visit by European Union/IMF officials discreet and less intrusive than in the past.

The government hopes to conclude the EU-IMF fiscal audit before Aug 20, when it is scheduled to repay €3.2 billion to the ECB.

Syriza will hold an emergency congress next month to determine whether the party continues to support government policy on the bailout.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on August 01, 2015, with the headline 'Tsipras admits secret plans to handle euro exit'. Print Edition | Subscribe