34 ms·

Frankly, I would think it irresponsible if the Greek government did not have a Plan B in place - be it parallel payments or a return to the Drachma. If (when?)

Frankly, I would think it irresponsible if the Greek government did not have a Plan B in place - be it parallel payments or a return to the Drachma. If (when?) it becomes necessary to do so, such a plan would need to be implemented with haste - they won't have the luxury of telling the markets "we'll be doing this in 3 months, once we work out the details".

BenjiBG 11y ago
I agree that they wouldn't have the time to tell the markets or other countries. But Tsipras and Varoufakis didn't even tell the Greek Government. And hacking a bank is still illegal.
- nl 11y ago
  It's not "a" bank, it was the (government controlled) Bank of Greece. Varoufakis - as finance minster - had responsibility for that, which arguably makes what he ordered not actually illegal (because the records would have been transferred between two areas under his control within the government).
  - Tomte 11y ago
    As all central banks in the Eurozone, the Bank of Greece is not government-controlled, but independant.
    - nl 11y ago
      That simplifies the actual situation. Yes - in common with most central banks it is supposed to be independent. However It ... acts as a treasurer and fiscal agent for the Greek government[1] and is partially owned by the Greek government (35%) [1] https://en.wikipedia.org/wiki/Bank_of_Greece https://en.wikipedia.org/wiki/Bank_of_Greece
      - Tomte 11y ago
        No, you try to confuse the issue. The finance Minister of Greece has no authority to order the BoG around re: fiscal policy, nor has he any right to seize its money.
        dragonwriter 11y ago
        > The finance Minister of Greece has no authority to order the BoG around re: fiscal policy AFAIK, this is incorrect. The government orders that bank with regard to fiscal actions (that's what the "fiscal agent" role means.) Monetary policy is another thing.
        Tomte 11y ago
        You're right, I confused those two.
        nl 11y ago
        Bank of Greece shareholdings: https://www.nbg.gr/english/the-group/corporate-governance/shareholder-structure/Documents/NBG_EN_Shareholders_Structure_30.06.2015.pdf https://www.nbg.gr/english/the-group/corporate-governance/sh... That 57% owned by the HFSF? That's the Hellenic Financial Stability Fund[1], the management of which is controlled by the Greek government[2]. [1] https://en.wikipedia.org/wiki/Hellenic_Financial_Stability_Fund https://en.wikipedia.org/wiki/Hellenic_Financial_Stability_F... [2] https://en.wikipedia.org/wiki/Hellenic_Financial_Stability_Fund#Management https://en.wikipedia.org/wiki/Hellenic_Financial_Stability_F...
tptacek 11y ago
Plan B in this case case seems to have been for the currently dominant political party to seize the Greek treasury, arrest the leader of the Greek central bank, and use their access to design by fiat, without parliament, a whole new financial system for the country. This seems approximately akin to, say, Ted Cruz being elected next year, another financial crisis happening shortly thereafter, and Cruz (a) arresting Janet Yellen (b) seizing control of the Federal Reserve and (c) switching us from the dollar back to Continentals.
- jacobolus 11y ago
  Except to complete the analogy, add 5+ years of great depression with no end in sight (huge foreign debt, GDP in the dumps, 25% unemployment, etc.), the previous political leadership completely discredited after going back on their campaign promises and driving the country into the ground, and undemocratic foreign institutions dictating policy demanding we keep the country in permanent misery. In such circumstances, I can well imagine a radical politician getting elected and taking drastic measures. FDR winning election and taking the country off the gold standard is a not incomparable situation from American history.
  - tptacek 11y ago
    I think there's a distinction that needs to be drawn between the need for some drastic measure to decouple the Greek economy from it's disastrous management by the Troika and the methods used to accomplish it. What makes todays reports bombshells isn't the idea that Tsipras (more accurately, the Syriza Left Platform) had a Plan B involving the drachma. Approximately everyone who reported on the Greece/EU showdown noted that Plan B would somehow involve the restoration of the drachma. The bombshell is that they had a plan to do it by fiat, extrajudicially, in the process seizing 10-15Bn EU from the Greek treasury in the hope that they could parcel the money --- which wasn't properly theirs --- to keep the government running during the transition. The reports suggest Left Platform, Varoufakis, and Tsipras were planning on rewriting the entire Greek financial system, without any consultation with the Greek people beyond the agreement of the Left Platform faction.
templl 11y ago
Also everyone concerned knew that plan-b would likley involve a coup on the central bank. And Varoufakis talked about the rest in his blog [0]. [0] http://yanisvaroufakis.eu/2014/02/15/bitcoin-a-flawed-currency-blueprint-with-a-potentially-useful-application-for-the-eurozone/ http://yanisvaroufakis.eu/2014/02/15/bitcoin-a-flawed-curren...

BenjiBG 11y ago

I agree that they wouldn't have the time to tell the markets or other countries. But Tsipras and Varoufakis didn't even tell the Greek Government. And hacking a bank is still illegal.

nl 11y ago
It's not "a" bank, it was the (government controlled) Bank of Greece. Varoufakis - as finance minster - had responsibility for that, which arguably makes what he ordered not actually illegal (because the records would have been transferred between two areas under his control within the government).
- Tomte 11y ago
  As all central banks in the Eurozone, the Bank of Greece is not government-controlled, but independant.
  - nl 11y ago
    That simplifies the actual situation. Yes - in common with most central banks it is supposed to be independent. However It ... acts as a treasurer and fiscal agent for the Greek government[1] and is partially owned by the Greek government (35%) [1] https://en.wikipedia.org/wiki/Bank_of_Greece https://en.wikipedia.org/wiki/Bank_of_Greece
    - Tomte 11y ago
      No, you try to confuse the issue. The finance Minister of Greece has no authority to order the BoG around re: fiscal policy, nor has he any right to seize its money.
      - dragonwriter 11y ago
        > The finance Minister of Greece has no authority to order the BoG around re: fiscal policy AFAIK, this is incorrect. The government orders that bank with regard to fiscal actions (that's what the "fiscal agent" role means.) Monetary policy is another thing.
        Tomte 11y ago
        You're right, I confused those two.
      - nl 11y ago
        Bank of Greece shareholdings: https://www.nbg.gr/english/the-group/corporate-governance/shareholder-structure/Documents/NBG_EN_Shareholders_Structure_30.06.2015.pdf https://www.nbg.gr/english/the-group/corporate-governance/sh... That 57% owned by the HFSF? That's the Hellenic Financial Stability Fund[1], the management of which is controlled by the Greek government[2]. [1] https://en.wikipedia.org/wiki/Hellenic_Financial_Stability_Fund https://en.wikipedia.org/wiki/Hellenic_Financial_Stability_F... [2] https://en.wikipedia.org/wiki/Hellenic_Financial_Stability_Fund#Management https://en.wikipedia.org/wiki/Hellenic_Financial_Stability_F...

tptacek 11y ago

Plan B in this case case seems to have been for the currently dominant political party to seize the Greek treasury, arrest the leader of the Greek central bank, and use their access to design by fiat, without parliament, a whole new financial system for the country. This seems approximately akin to, say, Ted Cruz being elected next year, another financial crisis happening shortly thereafter, and Cruz (a) arresting Janet Yellen (b) seizing control of the Federal Reserve and (c) switching us from the dollar back to Continentals.

jacobolus 11y ago
Except to complete the analogy, add 5+ years of great depression with no end in sight (huge foreign debt, GDP in the dumps, 25% unemployment, etc.), the previous political leadership completely discredited after going back on their campaign promises and driving the country into the ground, and undemocratic foreign institutions dictating policy demanding we keep the country in permanent misery. In such circumstances, I can well imagine a radical politician getting elected and taking drastic measures. FDR winning election and taking the country off the gold standard is a not incomparable situation from American history.
- tptacek 11y ago
  I think there's a distinction that needs to be drawn between the need for some drastic measure to decouple the Greek economy from it's disastrous management by the Troika and the methods used to accomplish it. What makes todays reports bombshells isn't the idea that Tsipras (more accurately, the Syriza Left Platform) had a Plan B involving the drachma. Approximately everyone who reported on the Greece/EU showdown noted that Plan B would somehow involve the restoration of the drachma. The bombshell is that they had a plan to do it by fiat, extrajudicially, in the process seizing 10-15Bn EU from the Greek treasury in the hope that they could parcel the money --- which wasn't properly theirs --- to keep the government running during the transition. The reports suggest Left Platform, Varoufakis, and Tsipras were planning on rewriting the entire Greek financial system, without any consultation with the Greek people beyond the agreement of the Left Platform faction.

templl 11y ago

Also everyone concerned knew that plan-b would likley involve a coup on the central bank. And Varoufakis talked about the rest in his blog [0]. [0] http://yanisvaroufakis.eu/2014/02/15/bitcoin-a-flawed-currency-blueprint-with-a-potentially-useful-application-for-the-eurozone/ http://yanisvaroufakis.eu/2014/02/15/bitcoin-a-flawed-curren...