[Marxism] Yanis Varoufakis defends ‘Plan B’ tax hack

Louis Proyect lnp3 at panix.com
Tue Jul 28 05:06:42 MDT 2015


Financial Times, July 28 2015
Yanis Varoufakis defends ‘Plan B’ tax hack
Peter Spiegel in Brussels and Kerin Hope in Athens

Yanis Varoufakis has insisted he did nothing improper as part of a 
five-month clandestine project he ran as Greek finance minister that 
prepared for his country’s possible exit from the euro.

The scheme, which was almost completed but not fully implemented, 
involved hacking into Greece’s independent tax service to set up a 
parallel payment system — accessing individuals’ private identification 
numbers and copying them on to a computer controlled by a “childhood 
friend” of Mr Varoufakis.

Mr Varoufakis described the project in a 25-minute teleconference with 
private investors on July 16.

A tape of the call was released on Monday by the London-based Official 
Monetary and Financial Institutions Forum, which hosted the session, 
after portions were published at the weekend by the Greek newspaper 
Kathimerini.

“We decided to hack into my minister’s own software programme in order 
to be able to bring it all, to just copy, just copy the codes of the tax 
systems’ website on to a large computer in his office, so he can work 
out how to design and implement this parallel payment system,” Mr 
Varoufakis said on the call.

“We were ready to get the green light from the prime minister when the 
banks closed in order to move into the general secretariat of public 
revenues, which was not controlled by us but is controlled by Brussels, 
and to plug this laptop in and to energise the system.”

Political opponents expressed outrage at the plan. Greek media reported 
that 24 MPs from New Democracy, the largest opposition party, had asked 
Alexis Tsipras, prime minister, whether Mr Varoufakis should face a 
judicial inquiry.

In a statement, Mr Varoufakis’s office said the project was conducted by 
a working group he was authorised to establish in order to prepare 
contingency plans in case Greece was forced out of the eurozone by 
creditors. The working group broke no laws, the statement said.

“The ministry of finance’s working group worked exclusively within the 
framework of government policy and its recommendations were always aimed 
at serving the public interest, at respecting the laws of the land, and 
at keeping the country in the eurozone,” said Mr Varoufakis’s office.

The disclosures about Mr Varoufakis’s “Plan B” come on the heels of 
revelations by the Financial Times and other media organisations that 
far-left members of the governing Syriza party were contemplating a far 
more radical plan to seize government reserves and take over the 
country’s central bank in a transition to a new currency.

James K Galbraith, the University of Texas economist and a longtime 
Varoufakis associate who worked on the finance ministry plan, issued his 
own statement saying their efforts never overlapped with the more 
radical efforts other than an “inconclusive” phone call he had with an 
MP from the Left Platform.

“We had no co-ordination with the Left Platform and our working group’s 
ideas had little in common with theirs,” said Mr Galbraith.

In his taped remarks, Mr Varoufakis said Mr Tsipras authorised him to 
prepare for a possible “Grexit”, even before Syriza won January’s 
parliamentary elections.

“I assembled a very able team, a small team, as it had to be, because 
that had to be kept completely under wraps, for obvious reasons,” said 
Mr Varoufakis.

“The difficulty was going from the five people who planned it to the 
1,000 that would be implementing it. For that, I had to receive another 
authorisation that never came.”

The revelations were shrugged off by government officials, who said Mr 
Tsipras never gave Mr Varoufakis the go-ahead to activate his plan.
“I can’t imagine this [happened],” said Dimitris Mardas, the deputy 
finance minister in charge of revenues. “But what a government 
minister’s team proposes doesn’t constitute government policy.”

Mr Tsipras is known to have grown wary of some of Mr Varoufakis’s ideas, 
a concern that contributed to his decision to replace the outspoken 
finance minister with Euclid Tsakalotos, a more low-key loyalist, 
earlier this month.

Mr Varoufakis’s Plan B involved creating reserve accounts 
“surreptitiously” attached to every taxpayer’s ID that could be used to 
make payments to other taxpayers when the European Central Bank forced 
the shutdown of Greece’s banking system, as it did last month.

“That would have created a parallel banking system while the banks were 
shut as a result of the ECB’s aggressive action, to give us some 
breathing space,” said Mr Varoufakis.

That would have created a parallel banking system while the banks were 
shut as a result of the ECB’s aggressive action, to give us some 
breathing space

He insisted the hacking became necessary because the general secretariat 
of public revenues in Greece was under the control of the creditor 
institutions.

“The general secretariat of public revenues, within my ministry, is 
controlled fully and directly by the troika [creditors]. It was not 
under control of my ministry. . . It was controlled by Brussels,” he said.

The independent revenue office (IRO) was set up as part of Greece’s 
second bailout in an attempt to eliminate political interference that 
had helped vested interest groups with close connections to government 
to avoid meeting their tax obligations.

One person with knowledge of the government computer systems said it 
would “probably have been possible to hack into the IRO computer, but it 
would have destroyed the credibility of the revenue office and its mission”.

Additional reporting by Ferdinando Giugliano, Tony Barber and Katie 
Martin in London



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