Varoufakis wanted to chart return to drachma… step by step

A return to drachma would have generated banana republic-style restrictions on trade, commerce

Sources claim that former FinMin Yanis Varoufakis’ preparations for a return to the … feeble drachma were being taken step-by-step.

Centrist Potami MP Haris Theoharis, himself a former top official at the finance ministry before Varoufakis’ radical leftists took power,  charged that Varoufakis’ plan for a return to the drachma had been on the table from the outset of SYRIZA’s rule. He told Proto Thema that he still has doubts as to whether efforts for the return of the old currency have been scrapped altogether.

The plan was multi-faceted, he claimed.

On the first level, the radical leftist government would have prohibited the free circulation of certain products, raw materials etc. into Greece. The chilling but as yet unverified charges claim that SYRIZA would have allowed imports only with state approval – a scenario that harkens back to the old… Comecon.

Furthermore, the government would have stopped cash transactions, instead introducing digital money. At the same time, Greek banks would have proceeded with a haircut of deposits.

Sources point to the creation of a new parallel currency that would be used in tandem with the euro. Varoufakis had, from the outset been in favor of a steady transfer to a new currency, stressing that Greece would have had to issue its own IOUs. The same sources point to contacts with mints abroad in a non-EU country.

Noteworthy is the fact that since 1928, when the Bank of Greece had been created, bank bonds had been printed abroad. Theoharis states that “it is obvious that at the initial stages of such a plan and until the necessary transfer adjustments, our country would have been able to issue bonds in collaboration with another developed national bank.”

Varoufakis’ interest in Greece’s adoption of another currency was apparently no secret. Even prior to becoming a minister he had expressed such views, which were aligned with the views  of German FinMin Wolfgang Schaeuble. Support for a euro exit and return to the drachma of old is not a very public position expressed by the Left Platform, the “internal opposition” with the ruling Radical Left Coalition (SYRIZA). Just a week ago, the unofficial leader of the virulently anti-capitalist and radical communist Left Platform – Panagiotis Lafazanis – openly presented a “manifesto for the drachma.”