Helena Smith in Athens Wednesday 29 July 2015
Allegations of covert scheme described as ‘simply not true’ by European commission as Alexis Tsipras looks to conclude third bailout deal with creditors
Yanis Varoufakis had claimed in a private conference call that ‘the general secretariat is appointed, effectively, through a process that is troika-controlled’. Photograph: Louisa Gouliamaki/AFP/Getty Images
The European commission has denounced as “false and unfounded” claims by Greece’s former finance minister Yanis Varoufakis that international creditors had exclusive control over the country’s tax system.
Brussels slammed the suggestion that external supervision of the Greek tax revenue agency forced Varoufakis to consider hacking the ministry’s computers as part of a secret plan to devise a parallel payment system for the nation.
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“On what Mr Varoufakis has been saying, the allegations that the troika was controlling the secretariat general of public revenues are false and unfounded,” said Mina Andreeva, a spokeswoman for the European commission, referring to the triumvirate of lenders propping up the near bankrupt Greek economy. “The secretariat general of public revenue is a quasi-independent entity, responsible for tax administration, that is formally part of the Ministry of Finance.”
While creditors at the European commission, European Central Bank and International Monetary Fund provided the tax system with technical assistance, it was “simply not true” that lenders controlled it, she added.
The denunciation added a new twist to revelations that have shaken Greece after it emerged that Varoufakis, who resigned this month, had drawn up contingency plans outlining an alternative monetary system in the event of Athens being ejected from the Eurozone.
To create the parallel system – one that would allow the debt-stricken country to leave the euro “at a drop of a hat” – Varoufakis admitted that he had to hack his own ministry’s computer system to access individual tax codes controlled “fully and directly by the troika.”
The confession was made during a private conference call with investors that was subsequently revealed in the Greek media.
“It was not under control of my ministry,” Varoufakis was quoted as saying. “It was controlled by Brussels. The general secretariat is appointed, effectively, through a process that is troika-controlled and the whole mechanism within.”
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The revelation of the covert scheme has added weight to speculation that prime minister Alexis Tsipras’s left-wing government had planned to drop the euro even as it conducted fraught negotiations over further financial assistance with creditors. Government insiders have refused to be drawn on the former finance minister’s claims.
On Tuesday, the Greek media quoted prime ministerial aides as saying they had “tired” of Varoufakis. The prime minister, who turned 41 this week, is keen to conclude a third bailout with the EU and IMF that would unlock as much as €86bn (£61bn) in fresh loans to keep the country afloat.
Varoufakis is opposed to the stringent spending cuts and tax increases Athens has to agree to in exchange for the aid. With Greek banks operating under capital controls and the international standing of Athens damaged after months of acrimonious talks with creditors, largely overseen by Varoufakis, calls are also growing for the academic-turned-politician to be tried for high treason.
On Tuesday night, supreme court prosecutor Efterpi Koutzamani forwarded two suits filed against Varoufakis by private individuals to parliament – a move that could see the 300-seat House lifting his political immunity, the first step towards him standing trial.
The revelations overshadowed the start of an inspection tour in Athens by technical teams representing foreign lenders. Mission heads with the EU and IMF arrive in Athens on Wednesday and are expected to be greeted with draconian security as they try to gauge the parlous state of the Greek economy.
Athens urgently needs emergency funds to avert defaulting on 20 August when it must meet a €3.4bn bond repayment to the ECB. Although capital controls are not expected to be lifted for several months, there were reports on Tuesday suggesting that the Athens stock exchange, which like banks had also been closed, would reopen later in the week. Lenders opened their doors 10 days ago after a three-week shutdown.