PASOK leader: EU part of the Troika offered ‘velvet euro exit’ in August 2011

Posted by in Economy, Politics

PASOK leader Evangelos Venizelos dropped a bomb on Friday: “The country’s lenders offered a velvet exit from the euro in 2011,” Venizelos told 4,000 stunned party delegates during a speech at PASOK’s convention in Athens. Venizelos said that the Troika proposal came after a severe disagreement and that the price for remaining in the euro zone was the emergency property tax’ aiming to collect 2 billion euro.

 “The issue that led to the clash with the troika at the end of August 2011 was that we could not accept anymore measures that would blindly feed the recession and unemployment,” said Venizelos.

“Then we received proposals to receive funding so there would be a velvet exit from the euro. We rejected them.”

He went on to argue that this conflict with the troika led to the PASOK government being forced to adopt an unpopular property tax levied via electricity bills just a few weeks after Venizelos had denied this policy would be followed. He said that agreeing to bring in 2 billion euros in revenues through this tax led to subsequent agreements with the troika, including an extension to the time Greece had to complete its fiscal adjustment.  (full story ekathimerini)

“The emergency property tax led to the historic decision of 27th October 2011 and 21.February 2012[ II. Memorandum]” Venizelos added. According to some Greek media, the leader of PASOK  implied, German Finance Minister Wolfgang Schaeuble was behind the euro exit proposal.

 I read on a Sunday newspaper (Mar 4/2013) that the proposal was made by Wolfgang Schaeuble in Poland in September 2011. Schaeuble allegedly asked Venizelos, how much money and time would Greece need to print its own currency.

Venizelos was appointed Finance Minister in Papandreou’s government in June 2011.

Venizelos claims reveal also another background: why prime minister George Papandreou wanted a referendum on Euro, two months later. But not only French president Sarkozy and German Chancellor Merkel were against it. Also Evangelos Venizelos rejected the idea. He didn’t want Papandroeu to sabotage the deal he had stroke with Greece’s lenders. For the dramatic developments in Cannes read here.

No wonder Papandreou had to go and Venizelos take the lead in PASOK. They were never ‘best friends’ anyway…