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Roundup: Greek PM facing domestic headache over drachma scenarios

Xinhua, July 28, 2015 Adjust font size:

Greek Prime Minister Alexis Tsipras on Monday faced fresh domestic headaches over Plan B drachma shock scenarios ahead of the start of a new round of face-to-face negotiations with creditors later this week.

After an initial debt deal struck on July 13 and the ratification of reforms by parliament, Tsipras aims to seal the agreement by Aug. 20 when Athens needs to make a new debt repayment to the European Central Bank.

Talks with envoys of the international lenders in Athens were expected to start this week, according to Greek Finance Ministry sources, but a part of the ruling radical left Syriza party retains strong objections to some of the terms of the deal, fuelling scenarios over an imminent rift and snap general elections in autumn.

Addressing the party's political secretariat Monday, the Greek premier urged for unity to address the future challenges.

No comment has been made so far over the shock revelations in local media reports that at least two former ministers had prepared plan Bs in recent months that would eventually lead to the return to drachma.

The seriousness of the plans has been disputed by Syriza officials. Former finance minister Yanis Varoufakis and former energy minister Panagiotis Lafazanis have dismissed the reports as "speculation, defamation and fear mongering orchestrated to undermine the government."

Lafazanis is said to have suggested as an alternative plan a "raid" of the central Bank of Greece reserves in order to continue paying pensions and salaries until drachmas are printed.

According to "Vima" (Tribune) newspaper, the plan was proposed in case an agreement with lenders was not reached and the country faced a Grexit.

In addition, Varoufakis is said to have been preparing a detailed plan for a parallel payment system if the banking system closes down.

According to "Kathimerini" (Daily) newspaper, the former finance minister is said to have outlined this contingency plan in a teleconference on July 16, 10 days after his resignation from the post.

In a press release Monday, Varoufakis strongly rejected the reports. He clarified the plan had been made with Tsipras' knowledge and was nothing more than a contingency plan in case no deal with creditors was struck.

However opposition parties submitted a formal request to the parliament Monday for "more clear explanation" by the government concerning Varoufakis' case. Endit