Professor James K. Galbraith’s statement on the Ministry of Finance Working Group convened by former finance minister Yanis Varoufakis

(scroll down for the Greek language version)

I spent five months from early February through early July in close association with the Greek Finance Minister, Yanis Varoufakis, and was part of the Working Group that did contingency planning for potential attempts to asphyxiate the Greek government, including aggressive moves to force the country out of the euro. Since a great deal of public confusion has now arisen over this effort, the following should be stated:(1) 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.

(2) The group operated under the axiom that the government was fully committed to negotiating within the euro, and took extreme precautions not to jeopardize that commitment by allowing any hint of our work to reach the outside world. There were no leaks whatever, until the existence of the group was disclosed by the former Finance Minister himself, in response to criticism that his ministry had made no contingency plans when it was known that forces within the Eurozone were planning the forced exit of Greece.

(3) The existence of preliminary plans could not play any role in the Greek negotiating position, since their circulation (before there was a need to implement them) would have destabilized government policy.

(4) Apart from one late, inconclusive telephone conversation between MP Costas Lapavitsas and myself, we had no coordination with the Left Platform and our Working Group’s ideas had little in common with theirs.

(5) Our work ended for practical purposes in early May, with a long memorandum outlining major issues and scenaria that we  studied.

(6) My work in this area was unpaid and unofficial, based on my friendship with Yanis Varoufakis and on my respect for the cause of the Greek people.

FOR THE GREEK LANGUAGE VERSION…

ΑΝΑΚΟΙΝΩΣΗ JAMES K. GALBRAITH

Από τον Φεβρουάριο έως τις αρχές Ιουλίου συνεργάστηκα εκ του σύνεγγυς με τον έλληνα Υπουργό Οικονομικών, κ. Γιάνη Βαρουφάκη, ως συντονιστής ομάδας εργασίας που σχεδίαζε μέτρα έκτακτης ανάγκης στην περίπτωση έξωθεν ασφυκτικών πιέσεων προς την κυβέρνηση, συμπεριλαμβανομένων και κινήσεων που μπορεί να στόχευαν την εκδίωξη της Ελλάδας από το ευρώ. Δεδομένου ότι τον τελευταίο καιρό έχει δημιουργηθεί μεγάλη σύγχυση ως προς τις εργασίες της ομάδας μας, δηλώνω τα ακόλουθα:

  1. Σε καμία περίπτωση η ομάδα εργασίας δεν πρότεινε έξοδο της χώρας από το ευρώ ή οποιαδήποτε αλλαγή πολιτικής της κυβέρνησης. Οι εργασίες μας αφορούσαν την έκδοση ρευστότητας (IOU) σε ευρώ ή κινήσεις που έπρεπε να γίνουν σε περίπτωση που κάποιοι προσπαθούσαν να εκδιώξουν την χώρα από το ευρώ.
  2. Η ομάδα εργαζόταν υπό το αξίωμα πως πάγια θέση της κυβέρνησης ήταν η διαπραγμάτευση εντός του ευρώ και, για αυτό τον λόγο, λάμβανε όλες τις προφυλάξεις ώστε να μην διαδοθεί ο,τιδήποτε σχετικά με τις εργασίες μας. Πράγματι, δεν υπήρξαν διαρροές έως ότου ο τ. Υπουργός Οικονομικών, μετά το πέρας των εργασιών της ομάδας μας, ανακοίνωσε την ύπαρξή της ως ορθή αντίδραση στην έντονη κριτική ότι, την εποχή που δυνάμεις εντός της ευρωζώνης σχεδίαζαν την αποπομπή της χώρας από το ευρώ, το Υπουργείο Οικονομικών δεν εκπόνησε σχέδιο αντίδρασης.
  3. Η ύπαρξη προκαταρκτικών σχεδίων αντίδρασης δεν θα μπορούσε να παίξει ρόλο στις διαπραγματεύσεις, από την στιγμή που η δημοσιοποίησή τους (πριν χρειαστεί να εφαρμοστούν) θα αποσταθεροποιούσε την κυβερνητική πολιτική.
  4. Με εξαίρεση μια τηλεφωνική μου συνομιλία, άνευ ουσιαστικού περιεχομένου, με τον βουλευτή του ΣΥΡΖΙΑ κ. Κώστα Λαπαβίτσα, η ομάδα μας δεν είχε καμία απολύτως επαφή με μέλη της Αριστερής Πλατφόρμας των οποίων οι απόψεις απείχαν από τις δικές μας
  5. Οι εργασίες της ομάδας μας, ουσιαστικά, ολοκληρώθηκαν στις αρχές Μαΐου υπό την μορφή αναλυτικού πορίσματος στο οποίο αναφερόμασταν σε όλα τα ζητήματα, και σενάρια, που μελετήσαμε.
  6. Η εργασία μου στο πλαίσιο της ομάδας αυτής ήταν ανεπίσημη και αμισθί, βασισμένη στην φιλία μου με τον κ. Γιάνη Βαροουφάκη καθώς και στον σεβασμό μου για τον αγώνα του ελληνικού λαού.

9 thoughts on “Professor James K. Galbraith’s statement on the Ministry of Finance Working Group convened by former finance minister Yanis Varoufakis

  1. “The group operated under the axiom that the government was fully committed to negotiating within the euro, and took extreme precautions not to jeopardize that commitment by allowing any hint of our work to reach the outside world. There were no leaks whatever, until the existence of the group was disclosed by the former Finance Minister himself, in response to criticism that his ministry had made no contingency plans when it was known that forces within the Eurozone were planning the forced exit of Greece.” (Krugman)
    THE QUESTION NOW IS, WHY YIANNI YOU HAD TO GIVE EVERY BIT OF A DETAIL ABOUT THE PLAN? NOT ONLY YOU LEAKED THAT THIS PLAN EXISTED, BUT YOU EXPLAINED IT TO THE FULLNESS! CAN YOU ANSWER THIS YIANNI??? IF YOU WANTED TO OPEN YOUR MOUTH AGAIN AS YOU ARE CONSTANTLY DOING AND DIVULGE SENSITIVE INFORMATION – not ‘hinting’ as Krugman says), YOU COULD HAVE SAID WHEN PRESSURED: YES, WE HAVE A PLAN B, AND C, AND D. SO DON’T WORRY GREEK PEOPLE…( WE CAN COVER THE EVENT OF A GREXIT IF THEY PUSH US TO THAT). INSTEAD YOU DISCLOSED EVERY DETAIL OF PLAN B, YOU EXPOSED THE TEAM WHO WORKED ON IT AND THE PRIMEMINISTER HIMSELF WHO HAD ASKED FOR IT BUT WANTED TO KEEP IT SECRET, AND YOU OBLIGED KRUGMAN TO RESPOND IN DEFENCE. YOU YIANNI MADE THE OUTRAGEOUS LEAK WHICH TSIPRAS DEFINITELY DIDN’T WANT. WHY YIANNI, WHAT WAS/IS YOUR MOTIVE THESE DAYS? WE WANT TO KNOW, THE GREEK PEOPLE WANT TO KNOW.

    • Tsipras already chose another route, that of surrender, and wasted this option and all the work behind. I don’t understand why you are angry at Yanis because: (1) he has the right to defend himself against unfounded accusations of not being ready for the worst (he was) and (2) the People has the right to know what’s going on once secrecy is not anymore relevant. I wish Tsipras explained in detail how was he blackmailed and why did he chose the path of surrender and PASOKism. Also why has hasn’t he called the Central Committee of Syriza and keeps misruling the party on cult-of-personality and rally-the-troops methods. There is no excess of transparency, there is lack of it… but in other people.

  2. I’m not Greek but, as European citizen who stands in solidarity with Greece and who thinks that we are all affected by the outcome of the Greek crisis in the same way as Greeks are (even if it may not seem obvious to some), I want to thank Prof. Galbraith for his selfless help. To set up a well-pondered plan B was a necessary measure and it is no doubt a pity that such valuable advise has been thrown to the trash bin out of panic or premeditated betrayal.

    This is the kind of thing that differentiates a statesman from a clumsy wannabe.

    • To Maju
      Your presumptuous response of calling the Greek prime minister’s route “that of surrender” and your name-calling it – “PASOKism” – does not merit a serious response except to say that it reflects the ongoing diatribes of the shameless opposition – KKE, PASOK, N.D. POTAMI, and foreign exterminators, Merkel and Co., which it obviously enhances. But we Greeks know why THEY are doing it: to destroy Syriza and obliterate Tsipras once and for all – and I have to admit that they are almost succeeding, with Yianis’ help now. You may not have heard but Tsipras did explain many times to his people his momentous blackmail to sign the dotted line or lead Greece to irregular bankruptcy with all that that implies – with all the facts/info at his fingertips he made that choice after a 17 hour Marathon with the EU mafia. I have been following Yiani systematically for more than 5 years, including reading his books, and the bone I’m picking with him now quite angrily as you say, is that at this crucial moment of his country’s history his divulging the (secret) existence of a ‘Plan B’, and its explanation in all detail, was not only uncalled for, not only it created bad blood between his party comrades, not only it arrogantly disregarded the ‘bomb’ explosion of such a leak at this critical time, but most importantly it adds to the devious rebukes and objectives of our country’s enemies. That’s all.

    • It is what it is: while Varoufakis and even the Left Platform seemed to have contingency plans (seemingly separated but somehow coincident in the broader terms), Tsipras made good the claim of “bringing a latte to a war”. What happens if the institutions, the enemies of Greece and in general of European peoples, do not bend to politeness and common sense arguments, as they did not?

      Well, you call a referendum, good idea, you win it, and then what? Betray the mandate of the Greek People by signing something even more horrible? That’s particularly absurd because it makes the betrayal even more obvious and painful. The only obvious thing to do was to obey the popular mandate and take back the control of the Greek economy. You are a leader or a pushover?

      “But we Greeks know why THEY are doing it: to destroy Syriza and obliterate Tsipras once and for all – and I have to admit that they are almost succeeding, with Yianis’ help now”.

      They want to destroy Syriza but more importantly the will of resistance, the hope of the Greek People of being at least minimally in control of their own destiny. And Tsipras has given them exactly what they wanted. Tsipras is just one person and as such replaceable. If at least he would have shown clear capacity for leadership but he has done exactly the opposite: allowing the institutions, the Greek oligarchs and Dragasakis (allegedly the man of the banks inside Syriza) to manipulate him into self-destruction.

      The PASOKism term is not any gratuitous insult but a way of synthesizing in a single word the notions of masochism (necessary to do what Tsipras and his followers are doing) and the historical role of the PASOK. At least Papandreou had the dignity of resigning when he realized how much his hands were tied but Tsipras is now at the Venizelos stage of decay: signing everything sheepishly. What use is Syriza (or more specifically the Syriza bench in Parliament, as the party as such has not been allowed to decide anything yet) if it does not do what it must do, what it has been elected for, a mandate ratified and strengthened in the referendum?

      In order to save Syriza from Tsipras and Dragasakis, if it is still possible, the party organs must be convened. Right now, for all I know, there’s only growing unrest inside the file and rank, and even the middle ranks of the party against Tsipras and his poorly chosen path (to use a soft expression) and his poor leadership that is destroying both Syriza and Greece.

      “You may not have heard but Tsipras did explain many times to his people his momentous blackmail to sign the dotted line or lead Greece to irregular bankruptcy with all that that implies – with all the facts/info at his fingertips he made that choice after a 17 hour Marathon with the EU mafia”.

      I know how he rhetorically explains all this but not why he has not assumed the path of struggle, as demanded by the vote of the People in a referendum that he himself called and in which he asked for a resounding “no”. Why not to sign that “less extreme” memorandum and/or ask for the “yes”? It just makes no sense and obviously Yanis got most uncomfortable with all this and resigned, remaining quite discreet while negotiations were still ongoing and even in the referendum itself, and showing his support for Tsipras and Tsakalotos.

      You, Eleni, obviously belong to the few that are still mesmerized by Tsipras’ personal charisma or something like that. But you don’t lead a ship to port just with charisma, you also need leadership qualities and a plan that works. And this plan, even Tsipras admits to it, doesn’t work. This plan is the outright colonial surrender of Greece, the worst possible deal that could be signed and something that Greece will probably pay dearly for in the upcoming many decades (unless something really good happens).

      What I’m saying here is what history books will say. And it is very sad that it is that way.

      “KKE, PASOK, N.D. POTAMI, and foreign exterminators, Merkel and Co.”

      While I’m not at all enthusiast of KKE and their sectarianism, you have no right to put them together with the non-opposition, which is now supporting Tsipras while he does what they want. Tsipras is now the puppet of all those you mention, except the KKE, whose stand is somehow vindicated if anything.

  3. Ok, fair enough, there needed to be some contingency planning for Grexit. The question is why was it done in this seemingly shambolic fashion? Also, it is difficult to understand why similar work is taking place in different ‘factions’ of Syriza. Lapavitsas has been working for years on Grexit models, why not consult more closely? Kostantopoulou is running this farcical ‘Debt Truth Committee’ also without involving Lapavitsas who spend years advocating for a debt audit committee. I hope you appreciate that such inability to coordinate within the party gives little confidence that Syriza can coordinate as a government. [please note I am no fan of Lapavitsas, but we have to acknowledge his work on these issues].

    • Those are two different things: the Debt Truth Committee is an open political entitity auditing the debt, although it seems its conclusions were never properly sanctioned in Parliament. It provides legal and ethical assessment on how to treat the existing debt from a legal and political perspective, which in many cases it is outright illegal, according to their conclusions, and in all odious and illegitimate.

      This secret committee had a very different role: to prepare a plan B for the event that negotiations were unsuccessful. As they actually were. Sadly Tsipras and his camarilla seemed to have another plan: surrender.

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