Ambrose Evans-Pritchard — Varoufakis reveals cloak and dagger 'Plan B' for Greece, awaits treason charges

A secret cell at the Greek finance ministry hacked into the government computers and drew up elaborate plans for a system of parallel payments that could be switched from euros to the drachma at the "flick of a button" .
The revelations have caused a political storm in Greece and confirm just how close the country came to drastic measures before premier Alexis Tsipras gave in to demands from Europe's creditor powers, acknowledging that his own cabinet would not support such a dangerous confrontation.

Yanis Varoufakis, the former finance minister, told a group of investors in London that a five-man team under his control had been working for months on a contingency plan to create euro liquidity if the European Central Bank cut off emergency funding to the Greek financial system, as it in fact did after talks broke down and Syriza called a referendum.

The transcripts were leaked to the Greek newspaper Kathimerini. The telephone call took place a week after he stepped down as finance minister.…

You'll want to read the rest of this even though it is a nice Sunday and you have other things to do.

This looks like the true story from Yanis. International intrigue.

The Telegraph
Varoufakis reveals cloak and dagger 'Plan B' for Greece, awaits treason charges
Ambrose Evans-Pritchard

Also

This is more complete than the Telegraph article based on it.

Ekathimerini
Varoufakis claims had approval to plan parallel banking system
Xenia Kounalaki

Nick Edmonds — Value of State Currency When it's not Medium of Exchange

Interesting speculation by Nick riffing off MMT.

I think that what he may be overlooking is relative saving desire in competing currencies. In Greece under a drachma regime, this would be chiefly between the new drachma (or a G-euro) and the euro.

The preference is determined by interest rate differential. It is really a foreign exchange market and that's how forex works, assuming that difference in interest rates adequately compensate for differences in risk.

The Greek government could increase saving desire in drachma by a policy rate and yield curve that draws saving into drachma instead of a competitor currency like the euro.

Reflections on Monetary Economics
Value of State Currency When it's not Medium of Exchange
Nick Edmonds

Peter Cooper — Introducing a New Currency

Warren Mosler (for example, here) has explained very clearly and succinctly the key steps involved in effectively introducing a currency such as the drachma. (See, also, Bill Mitchell’s recent post, ‘A Greek exit is not rocket science‘.) Fears of exchange-rate catastrophe would be unfounded if these steps were followed....

heteconomist
Introducing a New Currency
Peter Cooper

If Greece votes "NO" and exits the euro and re-introduces the drachma, I am buying every Greek stock I can buy.

If Greece votes "NO" and exits the euro and re-introduces the drachma I am buying every Greek stock I can buy. Hopefully, the initial reaction will be a sharp selloff, so this way I can get them at a huge discount.

After Argentina broke the dollar peg and went back to the peso in 2002, the Argentine stock market proceeded on a 1500% advance over the next two years. It was the best performing stock market in the world.

I don't believe in all the gloom and doomers who say that going back to the drachma will be the equivalent of "out of the frying pan and into the fire."

The fire--the HELL--has been the euro and austerity. I am not saying that everything will immediately turn rosy for Greece. Not at all. There will be a period of acute suffering, but then things will normalize and get much better. They will be free of all that crushing debt and austerity.

The financial markets will be discounting this and moving higher.

Anyway, that's what I think and I am going to put my money where my mouth is.

RT — 100 percent in/out choice given to Greece is ‘false dilemma’ – euro architect to RT

There is a third solution in store for Greece, it could have two currencies in parallel that would stabilize the economy, Bernard Lietaer, co-designer of the European currency, told RT.

“Greece could be participant in the euro for tourism and shipping which are the largest sectors of the economy. At the same time it could have some new drachma which is playing by different rules and which is providing capacity to reanimate the economy at the grassroots level,” he said.

There have already been precedents of countries having two currencies, according to Lietaer....

RT
100 percent in/out choice given to Greece is ‘false dilemma’ – euro architect to RT

See also

Interview with Bernard Lietaer

‘No reason why Greece could not have two currencies’ - a euro architect

Jean-Claude Junker hurls insults at Greece

Yulia Shamporova — Greece Should Exit Eurozone, Recover National Currency to Pay Debt

In order to pay its debt to international creditors, Greece should exit the eurozone instead of criticizing the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF), Bernard Monot, a European Parliament member from France, told Sputnik on Tuesday.

“We prefer in the economic sense … that Greece exit eurozone, recover its national currency, the drachma, and reimburse its debt with national currency with Greece Central Bank,” Monot, chief economist for the right-wing National Front party, said.
This move would be a more logical response to the economic crisis in Greece, than criticizing the EU and the ECB, Monot added.

“[Greek Prime Minister] Alexis Tsipras criticizes the European Union and the European Central Bank and at the same time asks them for help — you can’t kill two birds with one stone. It is important to choose either one point or another,” the French lawmaker said....

Sputnik
Greece Should Exit Eurozone, Recover National Currency to Pay Debt
Yulia Shamporova

Greece Should Leave Eurozone If Bailout Terms Fail – Official

Greece must leave the eurozone if it fails to meet payments to its international creditors, European Parliament Vice President Alexander Graf Lambsdorff said Tuesday.

Ambrose Evans-Pritchard — Greece draws up drachma plans, prepares to miss IMF payment

Greece is drawing up drastic plans to nationalise the country's banking system and introduce a parallel currency to pay bills unless the eurozone takes steps to defuse the simmering crisis and soften its demands.

Sources close to the ruling Syriza party said the government is determined to keep public services running and pay pensions as funds run critically low. It may be forced to take the unprecedented step of missing a payment to the International Monetary Fund next week.
Greece no longer has enough money to pay the IMF €458m on April 9 and also to cover payments for salaries and social security on April 14, unless the eurozone agrees to disburse the next tranche of its interim bail-out deal in time.
“We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,” said a senior official.
“We may have to go into a silent arrears process with the IMF. This will cause a furore in the markets and means that the clock will start to tick much faster,” the source told The Telegraph.
Syriza’s radical-Left government would prefer to confine its dispute to EU creditors but the first payments to come due are owed to the IMF. While the party does not wish to trigger a formal IMF default, it increasingly views a slide into pre-default arrears as a necessary escalation in its showdown with Brussels and Frankfurt.....

Syriza sources say are they fully aware that a tough line with creditors risks setting off an unstoppable chain-reaction. They insist that they are willing to contemplate the worst rather than abandon their electoral pledges to the Greek people. An emergency fall-back plan is already in the works.

“We will shut down the banks and nationalise them, and then issue IOUs if we have to, and we all know what this means. What we will not do is become a protectorate of the EU,” said one source. It is well understood in Athens such action is tantamount to a return to the drachma, even though Syriza would rather reach an amicable accord within EMU....

“They want us to impose capital controls and cause a credit crunch, until the government becomes so unpopular that it falls," said one official.

"They want make an example of us, and demonstrate that no government in the eurozone has a right to have mind of its own. They don’t believe that we will walk away, or that the Greek people will back us, and they are wrong on both counts,” he said....

Hardball.

The Telegraph

Greece draws up drachma plans, prepares to miss IMF payment

Ambrose Evans-Pritchard