Inside the Varoufakis secret working group

By Zeke Turner

“The main thing was that nobody was loose in what they said to anybody,” says U.S. economist James Galbraith.

They traded information over encrypted email, kept the circle tight and met far away from Greek government buildings.
The secret working group convened by former Greek Finance Minister Yanis Varoufakis to prepare for an exit from the euro knew its mission was sensitive, one member told POLITICO Tuesday, but it wasn’t a rogue operation.

“There was nothing remotely questionable about what we were doing, except we were aware that it could it be misconstrued,” said American economist James Galbraith, who coordinated the group for Varoufakis, in a telephone interview from Washington.
The cloak-and-dagger enterprise was revealed over the weekend when the Greek newspaper Kathimerini reported that Varoufakis and former Energy Minister Panagiotis Lafazanis had discussed a plan that involved raiding the central bank’s reserves and hacking into taxpayer accounts in order to return to the currency the country used before the euro.
The group’s mandate: To try to fashion answers to a set of vexing questions, which according to Galbraith included: “Where should the attention of the government be faced if it’s forced over this cliff? Matters like, what’s the inventory of fuel? Whats the food situation? How long are medical supplies going to last? These kinds of things, which of course we couldn’t find out becuase if you start asking you end up alerting people that there are plans going on. But people have to be primed to ask those questions.”
The nature of the discussions required secrecy. “The main thing was that nobody was loose in what they said to anybody,” Galbraith said. He said the group consisted of “four or five members,” though only Galbraith and Varoufakis have been identified.
Asked if the secret group used code words, Galbraith laughed.
Galbraith’s work was unpaid, he said in a statement posted Monday on Varoufakis’ blog. He wrote he was working “based on my friendship with Yanis Varoufakis and on my respect for the cause of the Greek people.” The American economist and his wife have spent holidays together with Varoufakis and his wife Danae Stratou on the island of Aegina.
But the secret working group was under the leadership of Varofuakis, Galbraith said in the interview.
“I had no direct contact with Alexis after the end of February,” Galbraith said. “We were working under Yanis, and that was the end of it as far as we were concerned. We were not trying (to be) and we were not involved in any way in policy discussions in Greece. It was simply a question of background preparation in case the country was forced into a position it didn’t want to be in.”
Galbraith said that the secret working group was not involved with plans to tap into the Greek tax authority’s tax system.
“This was separate from this other matter that has caused a lot of hullabaloo, which is the use of tax numbers to establish a payment system,” Galbraith said.
Speaking to a group of pension, sovereign wealth and other investors on July 16, Varoufakis mentioned the possibility of hacking into the country’s tax system to create infrastructure for a new payment system.
“This would have created a parallel banking system, which would have given us some breathing space, while the banks would have been shut due to the ECB’s aggressive policy,” Varoufakis was quoted as saying. With the parallel system, payment denominations could be switched from euros to drachma at the government’s discretion.
The exact contents of the call, which was governed by Chatham House rules should have been private, but a record of the call was leaked to Kathimerini.