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Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by tptacek on Sunday July 26, 2015 @11:47PM (#9953220)
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.

Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by jacobolus on Monday July 27, 2015 @12:24AM (#9953332)
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.

Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by tptacek on Monday July 27, 2015 @12:37AM (#9953367)
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.

Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by jacobolus on Monday July 27, 2015 @12:40AM (#9953378)
What’s your alternative suggestion? I haven’t seen any plausible proposal for a way Greece could have gotten off the Euro on short notice without the ECB throwing a tantrum and a complete meltdown as a result. Which is probably why they decided not to do it, and are now stuck in permanent miserable limbo.
Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by tptacek on Monday July 27, 2015 @01:00AM (#9953424)
Again: the issue is not Grexit and return of the drachma. That's a realistic, if incredibly painful, option. The issue is doing it abruptly, by fiat, at the behest of a faction of Syriza.

If they had gone ahead with this plan, Syriza would be isolated from everyone --- the Greek people, who would instantly lose the majority of their assets in the euro/drachma haircut, and every lender in the world that might help soften the landing.

That's why the Left Platform leadership had to talk about arresting their own central banker. They'd have been executing a financial coup and rewriting the rules of their economy without consultation with anyone else inside Greece. They'd have been deciding by themselves not just to exit the Eurozone, but to do so abruptly and without the cooperation or assistance of the ECB.

This isn't just about Greece severing ties with the Eurozone; it's about how they would have done it.

Edit

Here's a Greek expat trying to lay out what an orderly transition from Eurozone membership to a drachma economy would look like:

http://pavlos.geekhost.org/2015/07/05/what-grexit-looks-like...

Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by mike_hearn on Monday July 27, 2015 @06:24AM (#9954336)
> Here's a Greek expat trying to lay out what an orderly transition from Eurozone membership to a drachma economy would look like

He seems remarkably sanguine about the whole thing. He seems to think Greece only imports iPhones and other luxuries. In reality they import about a third of their food, they import electricity, oil, virtually all medicines. He mentions those are "cheap" but that's because the pharma industry was treating them as a charity case for the last six months.

Where I do agree is that Greece cannot radically increase exports simply by switching to their own currency and printing a lot of it. People aren't going to suddenly double their consumption of cheese if Greece halves their prices.

Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by jacobolus on Monday July 27, 2015 @01:13AM (#9953456)
What makes you think they’d get any kind of cooperation or assistance from the ECB? They’ve gotten nothing but overt hostility from the ECB for 6 months.

Your link simplifies to an extreme, hand-waving away all the difficult parts of implementing the plan (e.g. how to keep the banks open, how to keep the government functioning, what the response would be of the IMF and ECB, how to prevent capital from immediately fleeing en masse, whether Greece actually has capacity to print and distribute drachmas, etc.). Its suggested approach might or might not work out, but it definitely would not be any kind of smooth ride.

Perhaps he was just overly optimistic in the wake of the referendum No vote. His prediction – “it’s likely the institutions will seek a quick compromise to avoid serious damage to themselves and the Euro” – turned out to be fairly inaccurate. Instead they refused to compromise and in fact made even stronger demands than they had before.

Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by mike_hearn on Monday July 27, 2015 @06:19AM (#9954327)
If by "overt hostility" you mean "lots of money" then sure ...
Re:Varoufakis reveals cloak and dagger 'Plan B' for Greece, ... by anonbanker on Monday July 27, 2015 @09:19AM (#9954968)
This is in no way intended to detract from your knowledge, but reading this reminds me a lot of 2006 when robert love (of linux kernel/GNOME fame) started getting into commentary on keynesian economics on his blog, eventually heavily lauding Ben Bernanke as the savior of the market post-greenspan, and having to eat his words (and delete his posts!) shortly thereafter.