Former Greek finance minister Varoufakis faces criminal prosecution over secret currency plot

The legal move against Varoufakis allows parliament to prepare a special congressional committee to examine the allegations.
The legal move against Varoufakis allows parliament to prepare a special congressional committee to examine the allegations.PHOTO: AFP

Former Greek finance minister Yanis Varoufakis is set to face criminal prosecution and prison for allegedly hacking taxpayer accounts in preparation for Greece's exit from the euro, while at the same time negotiating with European creditors for a new bailout.

The Supreme Court has referred the case to parliament to vote on whether he should lose his immunity from prosecution, The Times reported.

Five separate suits have also been put forward against a team of experts including American economist James Galbraith, whom Varoufakis allegedly drafted earlier this year to help hatch the plan, according to the report.

The legal move against Varoufakis allows parliament to prepare a special congressional committee to examine the allegations.

"It can all happen quite fast," Anna Asimakopoulou, a leading member of the conservative New Democracy party, was quoted as saying by The Times.

All of those implicated face criminal charges ranging from breach of privacy to operating like a criminal gang with the intent of reverting to a different currency, judicial sources told The Times.

Varoufakis also faces charges of high treason and breach of duty - which carry prison sentences of between five and 25 years.

The former minister confirmed on Monday that he had made secret preparations to hack into citizens' tax codes to create a parallel payment system after the disclosure provoked shock and disbelief in Greece, Reuters reported.

However, the self-proclaimed "erratic Marxist" academic, in office until July 6, sought to play down the initiative as a contingency plan that had never been implemented.

Greece was on the verge of tumbling out of the euro single currency before striking an 11th-hour deal on July 13 that imposes a new round of austerity measures in return for talks on a third international bailout.

Varoufakis' comments prompted the pro-European opposition to demand that Prime Minister Alexis Tsipras disclose the extent of planning for "Grexit" - which his government has repeatedly said it refused to consider, according to Reuters.

The furore piled new pressure on a premier struggling to contain a leftist party revolt.

In a conference call with the London-based OMFIF think-tank, recorded on July 16 but released on Monday, Varoufakis outlined his secret planning and also accused German Finance Minister Wolfgang Schaeuble of being "bent on effecting a Grexit" - forcing Athens to leave the currency area.

In the recording, Varoufakis said Tsipras had "given me the green light to come up with a Plan B "before coming to power in January and he had assembled a five-person team led by economist Galbraith to work covertly.

"We were planning to create, surreptitiously, reserve accounts attached to every tax file number, without telling anyone, just to have this system in a function under wraps," he said, adding that "of course this would be euro-denominated but at the drop of a hat, it could be converted to a new drachma."

At one point, the moderator cautioned Varoufakis that other people were listening to the teleconference but would not repeat its contents. The former finance minister replied: "I know they are. And even if they do I will deny I said it."

He went on to elaborate on plans to hack into his own ministry's software to copy tax systems code, saying he had recruited a childhood friend who was a software expert to help with the planning, according to Reuters.

In a statement from his office posted on his blog, Varoufakis defended the comments as essential contingency planning and attacked the media for indulging in "far-fetched articles that damage the quality of public debate".

"Greece's Ministry of Finance would have been remiss had it made no attempt to draw up contingency plans," the statement said, adding that the unit worked within government policy and its recommendations were aimed at keeping the country in the euro zone.