The turning point that led to Tsipras’ loss of confidence in Varoufakis was the presentation of “Plan B,” which involved the introduction of a parallel currency through vouchers. Credit: AMNA
In his political memoir, Ithaca, former Prime Minister Alexis Tsipras dedicates significant space to his first Finance Minister, Yanis Varoufakis, revealing his initial considerations and the course of their collaboration.
How Tsipras chose Varoufakis
Tsipras reveals that Varoufakis was not his first choice for the Ministry of Finance but was ultimately selected to conduct a high-intensity negotiation within the Eurozone. Tsipras notes: “For the Ministry of Finance, I had initially discussed with Yiannis Dragasakis. I had made him the proposal, long before our election victory, almost six months prior, but he did not accept.”
The reason for choosing Varoufakis despite his not being the initial preference, was the strategic objective:
“…Varoufakis, when I chose him as Minister, was not a supporter of an exit from the Euro. And I wanted an honest agreement within the EU. This, after all, we had repeatedly stressed. But, on the other hand, we were not hiding that we sought radical changes in Europe. We aimed to halt the imposition of the economic absurdity of neoliberalism, not only in Greece but across the entire continent. To stop the policies of austerity.”
Scientific obsession and strategic failure
Tsipras describes how Varoufakis’ strategy began to unfold, along with its impending failure, attributing it to the Minister’s academic self-confidence:
“Varoufakis was not simply an economist with theories; he was a person who had the immense self-confidence to want to prove in every way that the theories he espoused were correct. He wanted, in other words, to test his mathematical models and game theories, which he taught in academic lecture halls, on the battlefield. In short, there was a scientific obsession in him, a desire to go all the way, even if this would cause the collapse of our plan, the collapse of the Government, or even the country.”
The “Varoufakis Plan” with vouchers
The turning point that led to Tsipras’ loss of confidence in Varoufakis was the presentation of “Plan B,” which involved the introduction of a parallel currency through vouchers. Tsipras describes his reaction to the plan:
“We would print, he said, some vouchers instead of giving money to pensioners and wage earners; we would give them vouchers and with these they could buy goods and services. When I heard it, I didn’t know whether to cry or laugh. I reacted: ‘Are you serious? How are we going to give vouchers instead of pensions? We won’t last a single day. Which pensioner will agree to take vouchers instead of pensions?’”
He concludes the narrative with Varoufakis’ suggested alternative:
“Then he started telling me that there was also the alternative of not printing vouchers, but doing it all electronically via mobile phone. For pensioners to transact via mobile phone, in 2015! With that level of sloppiness, the discussion ended for me.”
Related: Wolfgang Schaeuble’s Memoir Delves Into the Greek Debt Crisis