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Greek PM defends Varoufakis over Grexit 'defence plan'

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Greek Prime Minister Alexis Tsipras on Friday defended his former finance minister Yanis Varoufakis over a Grexit 'defence plan' that has led to lawsuits against the maverick economist.

[ATHENS] Greek Prime Minister Alexis Tsipras on Friday defended his former finance minister Yanis Varoufakis over a Grexit 'defence plan' that has led to lawsuits against the maverick economist.

The statement came as senior EU-IMF auditors held their first meetings with Greek ministers to finalise a new three-year bailout of up to 86 billion euros agreed on July 13.

"Of course, I personally gave the order to prepare a team to prepare a defence plan in case of emergency," Mr Tsipras told parliament, without going into detail on what the plan entailed.

"If our creditors were preparing a Grexit plan, should we not have prepared our defences?" Mr Tsipras asked, referring to a scenario of Greece possibly exiting the eurozone.

But he insisted that his administration "did not have, and never prepared, plans to take the country out of the euro." Greece's creditors had warned that the country could be expelled from the euro when reform talks broke down at the end of June.

"The Commission is prepared for everything... We have a Grexit scenario, prepared in detail," European Commission head Jean-Claude Juncker had warned on July 8.

An economist with unorthodox ideas about the euro and Greece's debt restructuring, Mr Varoufakis has been served with private lawsuits for allegedly plotting in secret to take the country out of the euro.

The Supreme Court has forwarded the case to parliament, which has the sole power to determine whether Varoufakis, as a government lawmaker and former minister, can be formally charged.

Mr Varoufakis this month told a meeting of hedge fund investors that he had been planning a parallel system of liquidity that could have been converted to a "new" drachma "at the drop of a hat." He added that on his orders, a small team had "hacked" into the tax registry to create duplicate tax codes for millions of Greeks, in preparation for the plan.

Mr Tsipras on Friday said Mr Varoufakis may have made mistakes, but was not liable for prosecution.

"You cannot accuse him of stealing the money of the Greek people or of having a secret plan to crash the country into the rocks," the premier said.

As such, it is unlikely that parliament will authorise formal charges against Mr Varoufakis.

The 41-year-old Mr Tsipras is trying to regain control of his Syriza party after a damaging mutiny by over 30 lawmakers this month in response to the austerity measures in the new bailout.

The government had to rely on opposition MPs twice to push the reforms - which include sales tax hikes, a pension overhaul and privatisations - through parliament.

Syriza will hold an emergency congress in September to determine whether the party continues to support government policy on the bailout.

Party hardliners say that applying the terms of the bailout are a betrayal of Syriza's electoral pledge to end austerity.

The government hopes to conclude the EU-IMF fiscal audit before August 20, when it is scheduled to repay 3.2 billion euros to the European Central Bank.

AFP

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