 "Greece made preparations to exit Eurozone")
Already struggling with internal conflict, Greece's government is facing new criticism over secret preparations that would have allowed the country to leave the euro if necessary.
In a recording released on Monday, Greece's former finance minister detailed a contingency plan to create an alternative banking system that could switch to a new currency. The system would be "euro-denominated but at the drop of a hat it could be converted into a new drachma," the former finance minister, Yanis Varoufakis, said on the recording of a July 16 interview with an influential investment organization.
The preliminary "Plan B" was authorized by Alexis Tsipras, leader of the Syriza party and now prime minister, Varoufakis said. But he added that Tsipras did not allow the final plan to be put into action.
Publication of the recording, whose contents were reported by the Greek daily newspaper Kathimerini on Sunday, led some opposition members of Parliament to call for an investigation, putting more political pressure on Tsipras.
The country's creditors are arriving in Athens for talks on a new program intended to keep Greece in the eurozone. Greece needs to agree on the details of a new aid program before August 20, when the country is scheduled to make a payment of 3.2 billion euros on bonds held by the European Central Bank.
But Tsipras is dealing with a revolt in his own party over conditions that other eurozone countries are demanding in return for €86 billion in new financing. Tsipras has been able to pass legislation demanded by creditors only with the help of opposition parties.
Now the government is facing a new controversy about a eurozone exit plan, creating uncertainty for this uneasy alliance.
On Monday, a group of 24 lawmakers from the main conservative opposition party, New Democracy, asked Tsipras to clarify whether he had been aware of the plan to create an alternative banking system. They also suggested that Varoufakis, who resigned earlier this month, should face investigation.
"At a very difficult time of negotiations between the Greek government with the euro partners and the International Monetary Fund, it's creating unnecessary instability," said Theodore Couloumbis, a professor emeritus in international relations at the University of Athens.
As the bailout negotiations have dragged on, the Greek government has never officially acknowledged making contingency plans for a euro exit. But the recording, which was published on Monday by the Official Monetary and Financial Institutions Forum in London, showed that Varoufakis was deeply involved in confidential discussions to prepare for such a possibility.
Pfizer reported a dip in second-quarter profits on Tuesday, but boosted its forecast due in part to higher revenues from cancer drugs and global vaccines. Earnings for the pharmaceutical giant for the quarter ending June 28 were $2.6 billion, down 9.8 per cent from the year-ago period. Revenues slid 7.2 per cent to $11.85 billion. Revenues in Pfizer's established products business fell sharply, due in part to the expiration of key patents. Sales of the anti-inflammatory medication Celebrex fell to $224 million from $762 million in the year-ago quarter. Compounding that difficulty was the strong dollar, which dented revenues by $1 billion.
Pfizer reported a dip in second-quarter profits on Tuesday, but boosted its forecast due in part to higher revenues from cancer drugs and global vaccines. Earnings for the pharmaceutical giant for the quarter ending June 28 were $2.6 billion, down 9.8 per cent from the year-ago period. Revenues slid 7.2 per cent to $11.85 billion. Revenues in Pfizer's established products business fell sharply, due in part to the expiration of key patents. Sales of the anti-inflammatory medication Celebrex fell to $224 million from $762 million in the year-ago quarter. Compounding that difficulty was the strong dollar, which dented revenues by $1 billion.Pfizer reported a dip in second-quarter profits on Tuesday, but boosted its forecast due in part to higher revenues from cancer drugs and global vaccines. Earnings for the pharmaceutical giant for the quarter ending June 28 were $2.6 billion, down 9.8 per cent from the year-ago period. Revenues slid 7.2 per cent to $11.85 billion. Revenues in Pfizer's established products business fell sharply, due in part to the expiration of key patents. Sales of the anti-inflammatory medication Celebrex fell to $224 million from $762 million in the year-ago quarter. Compounding that difficulty was the strong dollar, which dented revenues by $1 billion.Varoufakis said that beginning in December he convened a team of five people who developed plans to create an alternative to the Greek banking system and ensure there was still a way for people to carry out transactions. The former finance minister, in a separate interview with the New Statesman this month, said he energetically called for vouchers or a parallel currency to be prepared should the European Central Bank decide to shut down the nation's banks.
Assuming Greek banks would be closed, the contingency plan called for the government to set up an alternative electronic payment system by piggybacking on a system already used to collect tax revenue. As part of the preparations, a member of Mr. Varoufakis's team hacked into the tax authority's computer system to copy the software code; the head of the tax authority was considered close to European authorities in Brussels, and Mr. Varoufakis didn't want to alert her to the plan.
"That would have created a parallel banking system while the banks were shut," Mr. Varoufakis said on the recording about the plan.
It was unclear how far the hacking went. But the revelations of the plan raised potential legal and privacy issues because the tax system is a trove of confidential data.
On Monday, Mr. Varoufakis and the Greek government portrayed the work as a response to the possibility that country would be pushed out of the euro.
"Greece's Ministry of Finance would have been remiss had it made no attempt to draw up contingency plans," Mr. Varoufakis said in a statement on his blog.
"There was never any discussion by the government of any policy foreseeing an exit from the euro," an official in the office of Mr. Tsipras said on Monday. "The only thing there was was a study of the repercussions in the event of a Grexit," the official said, using common shorthand for a Greek exit from the eurozone.
One member of Mr. Varoufakis's team, James K. Galbraith, a professor at the University of Texas at Austin, backed up that position.
"At no time was the working group engaged in advocating exit or any policy choice," Mr. Galbraith said in a statement on Mr. Varoufakis's website. "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."
European leaders have been speaking with increasing frankness about the possibility that Greece could leave the euro, a topic once considered taboo.
Wolfgang Schäuble, the German finance minister, had openly discussed the idea that Greece would temporarily drop out of the currency bloc, but the proposal was rejected by Angela Merkel, the German chancellor. Mr. Schäuble was not alone. Leaders from countries like Slovakia raised the possibility of a Greek exit in meetings of eurozone ministers, although the idea was ultimately ruled out.
A top official at the European Central Bank expressed dismay at the behavior of political leaders, saying they had put their national political interests above the interests of the eurozone.
"The Greek crisis has let the genie out of the bottle regarding countries leaving the euro area, and it will not be easy to put it back in again," Benoît Coeure, a member of the executive board of the central bank, said in an interview published on Monday by the French newspaper Le Monde.
In a recording released on Monday, Greece's former finance minister detailed a contingency plan to create an alternative banking system that could switch to a new currency. The system would be "euro-denominated but at the drop of a hat it could be converted into a new drachma," the former finance minister, Yanis Varoufakis, said on the recording of a July 16 interview with an influential investment organization.
The preliminary "Plan B" was authorized by Alexis Tsipras, leader of the Syriza party and now prime minister, Varoufakis said. But he added that Tsipras did not allow the final plan to be put into action.
Publication of the recording, whose contents were reported by the Greek daily newspaper Kathimerini on Sunday, led some opposition members of Parliament to call for an investigation, putting more political pressure on Tsipras.
The country's creditors are arriving in Athens for talks on a new program intended to keep Greece in the eurozone. Greece needs to agree on the details of a new aid program before August 20, when the country is scheduled to make a payment of 3.2 billion euros on bonds held by the European Central Bank.
But Tsipras is dealing with a revolt in his own party over conditions that other eurozone countries are demanding in return for €86 billion in new financing. Tsipras has been able to pass legislation demanded by creditors only with the help of opposition parties.
Now the government is facing a new controversy about a eurozone exit plan, creating uncertainty for this uneasy alliance.
On Monday, a group of 24 lawmakers from the main conservative opposition party, New Democracy, asked Tsipras to clarify whether he had been aware of the plan to create an alternative banking system. They also suggested that Varoufakis, who resigned earlier this month, should face investigation.
"At a very difficult time of negotiations between the Greek government with the euro partners and the International Monetary Fund, it's creating unnecessary instability," said Theodore Couloumbis, a professor emeritus in international relations at the University of Athens.
As the bailout negotiations have dragged on, the Greek government has never officially acknowledged making contingency plans for a euro exit. But the recording, which was published on Monday by the Official Monetary and Financial Institutions Forum in London, showed that Varoufakis was deeply involved in confidential discussions to prepare for such a possibility.
Pfizer reported a dip in second-quarter profits on Tuesday, but boosted its forecast due in part to higher revenues from cancer drugs and global vaccines. Earnings for the pharmaceutical giant for the quarter ending June 28 were $2.6 billion, down 9.8 per cent from the year-ago period. Revenues slid 7.2 per cent to $11.85 billion. Revenues in Pfizer's established products business fell sharply, due in part to the expiration of key patents. Sales of the anti-inflammatory medication Celebrex fell to $224 million from $762 million in the year-ago quarter. Compounding that difficulty was the strong dollar, which dented revenues by $1 billion.
Pfizer reported a dip in second-quarter profits on Tuesday, but boosted its forecast due in part to higher revenues from cancer drugs and global vaccines. Earnings for the pharmaceutical giant for the quarter ending June 28 were $2.6 billion, down 9.8 per cent from the year-ago period. Revenues slid 7.2 per cent to $11.85 billion. Revenues in Pfizer's established products business fell sharply, due in part to the expiration of key patents. Sales of the anti-inflammatory medication Celebrex fell to $224 million from $762 million in the year-ago quarter. Compounding that difficulty was the strong dollar, which dented revenues by $1 billion.Pfizer reported a dip in second-quarter profits on Tuesday, but boosted its forecast due in part to higher revenues from cancer drugs and global vaccines. Earnings for the pharmaceutical giant for the quarter ending June 28 were $2.6 billion, down 9.8 per cent from the year-ago period. Revenues slid 7.2 per cent to $11.85 billion. Revenues in Pfizer's established products business fell sharply, due in part to the expiration of key patents. Sales of the anti-inflammatory medication Celebrex fell to $224 million from $762 million in the year-ago quarter. Compounding that difficulty was the strong dollar, which dented revenues by $1 billion.Varoufakis said that beginning in December he convened a team of five people who developed plans to create an alternative to the Greek banking system and ensure there was still a way for people to carry out transactions. The former finance minister, in a separate interview with the New Statesman this month, said he energetically called for vouchers or a parallel currency to be prepared should the European Central Bank decide to shut down the nation's banks.
Assuming Greek banks would be closed, the contingency plan called for the government to set up an alternative electronic payment system by piggybacking on a system already used to collect tax revenue. As part of the preparations, a member of Mr. Varoufakis's team hacked into the tax authority's computer system to copy the software code; the head of the tax authority was considered close to European authorities in Brussels, and Mr. Varoufakis didn't want to alert her to the plan.
"That would have created a parallel banking system while the banks were shut," Mr. Varoufakis said on the recording about the plan.
It was unclear how far the hacking went. But the revelations of the plan raised potential legal and privacy issues because the tax system is a trove of confidential data.
On Monday, Mr. Varoufakis and the Greek government portrayed the work as a response to the possibility that country would be pushed out of the euro.
"Greece's Ministry of Finance would have been remiss had it made no attempt to draw up contingency plans," Mr. Varoufakis said in a statement on his blog.
"There was never any discussion by the government of any policy foreseeing an exit from the euro," an official in the office of Mr. Tsipras said on Monday. "The only thing there was was a study of the repercussions in the event of a Grexit," the official said, using common shorthand for a Greek exit from the eurozone.
One member of Mr. Varoufakis's team, James K. Galbraith, a professor at the University of Texas at Austin, backed up that position.
"At no time was the working group engaged in advocating exit or any policy choice," Mr. Galbraith said in a statement on Mr. Varoufakis's website. "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."
European leaders have been speaking with increasing frankness about the possibility that Greece could leave the euro, a topic once considered taboo.
Wolfgang Schäuble, the German finance minister, had openly discussed the idea that Greece would temporarily drop out of the currency bloc, but the proposal was rejected by Angela Merkel, the German chancellor. Mr. Schäuble was not alone. Leaders from countries like Slovakia raised the possibility of a Greek exit in meetings of eurozone ministers, although the idea was ultimately ruled out.
A top official at the European Central Bank expressed dismay at the behavior of political leaders, saying they had put their national political interests above the interests of the eurozone.
"The Greek crisis has let the genie out of the bottle regarding countries leaving the euro area, and it will not be easy to put it back in again," Benoît Coeure, a member of the executive board of the central bank, said in an interview published on Monday by the French newspaper Le Monde.
© 2015 The New York Times News Service