Greece: Why No ‘Plan B’, Mr. Varoufakis?

by Jerry Alatalo

aaa-8Does anyone else wonder how it is that Greece and Syriza seem to have no “Plan B”: leaving the euro, Grexit, and returning to the drachma? Like millions of men and women around the world, interest in the situation in Greece leading up to the historic “Oxi” vote on Sunday July 5 has led to reading a good number of articles and listening to reports. Recently resigned Greece Finance Minister Yanis Varoufakis posted a short radio interview on his personal blog days before the July 5 vote, on July 2:

What stood out and astonished during the radio interview was Mr. Varoufakis’ talking about how European nations, upon agreeing to use the euro, were required to destroy/get rid of their drachma, lira, peso, franc, etc. printing presses. The first question which came to mind after hearing him say that was “How can he be saying that Greece hasn’t made certain to obtain printing presses to produce drachmas?” While thinking it was naive and perhaps ridiculous to make the following suggestion in a comment at Mr. Varoufakis’ blog on the printing press issue, but, since the interview didn’t reveal possible solutions, the following comment was entered:

(Note: Copy/paste from the actual post – Interesting that “Your comment is awaiting moderation.”… the comment apparently wasn’t ok’d/published)

Jerry “Peacemaker” on July 3, 2015 at 02:42 said:Your comment is awaiting moderation.

“Extremely interesting to hear that upon joining the eurozone, member states were required to dispose of their printing presses. That made certain eurozone states would find it difficult to return to their traditional sovereign currency – as enchained, captive “customers” and borrowers.
 Before joining the eurozone Greece printed and used the drachma, and the men and women who were employed in the printing of the Greek national currency obviously have the experience and knowledge of how to resurrect drachma-printing and Greece’s return to sovereign money.The people of Greece, of any nation, can choose control over their monetary affairs instead of persisting in giving that immense power away to a small group of private profit-seeking interests – who reside far away from Greece. Consult the men and women who understand drachma-printing from actually having done it, find the printing presses, and return to pre-euro sovereign money status.”


So, where are you going with this, Jerry? First, it is almost beyond comprehension to explain, if true, that Syriza with Yanis Varoufakis as Finance Minister made no arrangements, all arrangements, for a potential Grexit and return to the drachma as Greece’s currency. After learning of the no-drachma-printing presses issue, left a comment at the popular blog for economists: “Real-World Economics Review” – with a link to the radio interview and the question “Does anyone know where there are some good, reliable drachma printing presses?” (comment ok’d and posted):

In sharing that comment, the intent was to convey the absolutely inexplicable, mind-blowing fact that Greece officials evidently did not have the physical equipment, supplies, personnel, etc. to print drachmas – a real and possibly imminent, urgent eventuality, and one that seemed completely overlooked?!


Why the comment at Yanis Varoufakis’ blog wasn’t posted/made public on July 3, what effect economists at RWER who clicked the link and listened to the interview had in eventually concentrating focus/raising the printing press issue (Mr. Varoufakis resigned after Sunday’s “Oxi” vote, to the surprise of most observers), and why Mr. Varoufakis didn’t order – immediately upon becoming Finance Minister – purchase of necessary equipment for printing drachmas…. are questions which will become answered in time.

The thought that Mr. Varoufakis may have intentionally avoided preparations and planning for a possible scenario where the printing of drachmas was necessary never came to mind, until listening to journalist/author William Engdahl in the following interview – which occurred after Mr. Varoufakis resigned. Mr. Engdahl and host Ian R. Crane suggest that Mr. Varoufakis, by failing to make certain the Greece government had a workable “Plan B” should negotiations sour to the point of exiting the eurozone, is perhaps guilty of high treason.

Mr. Engdahl points out that Yanis Varoufakis was, in his view, a “Trojan Horse” who made sure there was no “Plan B”, and gave him credit for “doing his job of pretending to be a liberal”, giving Europeans and Greeks an impression of Greek government incompetence.

It’s hard to argue with William Engdahl’s analysis. Upon listening to the radio interview where Yanis Varoufakis talked about having no drachma printing presses, most listeners were probably shocked and perplexed that such an obvious potentiality hadn’t been accounted for.

Greeks’ return to the drachma would most likely lead to a domino-effect of nations in the eurozone – and around the Earth – emulating Greece and taking sovereign control of their monetary systems.

That means truly enormous, unprecedented, historic global change.


William Engdahl article:

(Thank you to Ian R Crane at YouTube)

Greece Elections: Syriza’s View.

by Jerry Alatalo

DrachmaAlphabet Professor of Economic Theory at the University of Athens Yanis Varoufakis talks on RT’s “Boom Bust” about his decision to run for Parliament with the Syriza Party. When asked by the female interviewer whether current circumstances in Greece can lead to lasting growth, Mr. Varoufakis replied “absolutely not”.

When asked why he entered Greek politics, he tells the show’s host that after submitting economic proposals to improve the economic situation in Greece for five years, Syriza leader Alexis Tsipras invited him to join the government and implement his proposals and policies – even though he “dreaded” the idea. He points out that in the last four years his proposals have become endorsed by a number of former Prime Ministers, Presidents and others.

As far as Greece exiting the Eurozone, Varoufakis sees it now as an impossibility for the simple reason the nation hasn’t printed any drachmas – Greece’s currency before joining the EU and adopting the Euro, and that a significant amount of planning and time would be needed to return to the old Greek currency. Any serious consideration by Syriza leaders of leaving the Eurozone, should they win the upcoming January 25 elections and take power, could hinge on decisions made by the “Troika” (European Commission, European Central Bank, International Monetary Fund) in response to Syriza’s requests for renegotiation and/or write-down of the national debt of Greece.

Mr. Varoufakis sees public debt, the banks and under-investment as the three primary issues the government must deal with. The Troika may decide to “play hardball” and deny a potential Syriza government its debt restructuring proposals, which could lead other Eurozone nations like Spain, Italy, Ireland, France and others demanding the same deals. Some analysts of the Greek economic situation feel that the source of tension between Greeks, Spaniards, Italians, Irish and other Eurozone state populations and the Troika is that more men and women living in the EU have reacted to destructive austerity measures by sharing the view that interests of a small group in the financial sector are given top priority to the great detriment of social conditions.

Mr. Varoufakis wrote recently: “My greatest fear, now that I have tossed my hat in the ring, is that I may turn into a politician. As an antidote to that virus I intend to write my resignation letter and keep it in my inside pocket, ready to submit it the moment I sense signs of losing commitment to speak truth to power”.

He explains that fear by distinguishing between normal discussions between people where the agreed upon point is to learn from each other, as opposed to politicians who focus on harming each other. He thinks the Eurozone was badly constructed, has resulted in great harm to societal conditions across Europe, and that many have come finally to acknowledge that what he calls “Ponzi Austerity” – moving from bad to worse levels of increasingly destructive, endless austerity – needs universal rethinking.

He sees the Eurozone as a place where nation-states are playing a game of pretend by not acknowledging the systemic deficiencies of an economic model which has extreme flaws when it comes to realizing positive results.

For Greece in particular, but implying the same for all economically struggling EU states, Varoufakis has coined the phrase “fiscal waterboarding of Greece”, a practice which Syriza says must end, and believes Greece, by electing Syriza to power, offers an opportunity for new hope and possible transformation of the Eurozone from a place consisting of nation/state “model prisoners” to one of prosperity, growth and better health and well-being for the people.

Finally, economic theory Professor Yanis Varouflakis sums up his feelings about the future: “My heart is hopeful, but my mind is pessimistic”. The days ahead leading up to the January 25 Greek elections – and the days, weeks, months and years after them –  should certainly continue to generate international interest. Wonder if those old drachma printing presses are still lying around in an Athens warehouse somewhere.


(Thank you to Boom Bust on YouTube)