Details of a plot by left-wing members of parliament in Greece to seize the national mint and appeal to Russia for help at the peak of the euro crisis have just leaked. The Financial Times reports the details:
Arresting the central bank’s governor. Emptying its vaults. Appealing to Moscow for help. These were the elements of a covert plan to return Greece to the drachma hatched by members of the Left Platform faction of Greece’s governing Syriza party.
They were discussed at a July 14 meeting at the Oscar Hotel in a shabby downtown district of Athens following an EU summit that saw Greece cave to its creditors, leaving many in the party feeling despondent and desperate. […]
Chief among them is Panayotis Lafazanis, the former energy and environment minister and leader of Syriza’s Left Platform, which unites a diverse group of far left activists — from supporters of the late Venezuelan president Hugo Chávez to old-fashioned communists. He was eventually sacked in a cabinet reshuffle after voting against reforms tied to the bailout.
It’s unclear as of yet whether the first step of this plan was to persuade the Prime Minister, stage a parliamentary coup, or stage an actual coup—but the FT reports the atmosphere in the room was “revolutionary.” And Lafanzis certainly had firm plans in mind:
[E]ven hardline communists were taken aback when Mr Lafazanis proposed that the Syriza government should seize control of the Nomismatokopeion, the Greek mint, where the bulk of the country’s cash reserves are kept.[..]
Mr Lafazanis said the reserves, which he claimed amounted to €22bn, would pay for pensions and public sector wages and also keep Greece supplied with food and fuel while preparations were made for launching a new drachma.
Meanwhile, the central bank would immediately lose its independence and be placed under government control. Its governor, Yannis Stournaras, would be arrested if, as expected, he opposed the move.
In this, the plotters went far beyond what even leftist figures such as recently-sacked Finance Minister Yanis Varoufakis acknowledged would have been possible. As Varoufakis wrote in the Guardian earlier this month:
To exit, we would have to create a new currency from scratch. In occupied Iraq, the introduction of new paper money took almost a year, 20 or so Boeing 747s, the mobilisation of the US military’s might, three printing firms and hundreds of trucks. In the absence of such support, Grexit would be the equivalent of announcing a large devaluation more than 18 months in advance: a recipe for liquidating all Greek capital stock and transferring it abroad by any means available.
In fact, it would have placed Greece in total financial chaos—what one MP described as “a trip to hell.”
And their plan to escape that hell? Simple:
Even before the Oscar Hotel meeting, Mr Lafazanis, a former Greek Communist Party official, was pursuing desperate schemes to address the government’s financial woes.
Given the communist past of Mr Tsipras and other leading government figures, Athens believed it would be a simple matter to win $5bn to $10bn in financial backing from Vladimir Putin, the Russian president.
Mr Lafazanis visited Moscow three times as Mr Tsipras’s envoy after Syriza came to power in January. In return for signing up to a new gas pipeline project, he hoped for at least €5bn in prepayments of gas transit fees, according to people briefed on the initiative. But the Russians rejected the deal the week before the EU summit.
Two notes: one, it’s something of a shock to see such a blunt statement of Tsirpas’ communist connections—but a beneficial one, given how they color the worldview. And secondly, Mr. Lafazanis badly misunderstands Mr. Putin, whose schtick is taking money, not doling it out on that scale.
The fallout from these revelations remains to be seen. Reports abound that a split in Syriza is deepening, and an open breach with Tsipras is more and more likely in the coming weeks. And meanwhile, negotiations having resumed, Greece is up to its old tricks…