Thursday, July 30, 2015

Yanis Varoufakis: A Case Of High Treason?

It simply does not seem to be part of Greek mentality to approach controversial issues in a balanced way. Within the space of a few weeks, Yanis Varoufakis muted from a glorified, self-assertive Finance Minister to a man being accused of high treason. As much as I criticize many of Varoufakis actions, to accuse him of high treason, based on what we know now, is truly overshooting the target by far.

I think with Varoufakis one has to differentiate between the 'what' and the 'how' (both, as regards the presentation of his economic theories as well as his actions as Finance Minister). If the 'what' is a case of high treason, then the Thessaloniki Program is a case of high treason as well. After all, whatever Varoufakis (and SYRIZA) did was spelled out clearly in that program.

It is the 'how' which got Varoufakis into trouble. One simply doesn't publicly brag about denying one's statements or about hacking into computer systems. Or, as Finance Minister, one simply doesn't accuse one's colleagues of economic ignorance.

To put the contingency plan, the Plan B, into perspective: if Greece had stumbled into Grexit without any contingency plan on hand, the Finance Minister could have been legally accused. Not of high treason but certainly of dereliction of duties. I, for one, have always believed that Greece as well as the EU should have prepared (top secret) contingency plans for such an event beginning in early 2010.

The issue is whether, in the preparation of Plan B, laws of the country were violated. To hack into computer systems and/or to induce third parties to do that certainly sounds to me like a violation of laws, but I am no expert on Greek laws. One would first have to determine objectively what had really been done (so far, all we know about the hacking is Varoufakis' casual statement in the teleconference call) and once a violation of law is determined by a court, the respective judgment should be passed. In the worst case scenario, Varoufakis could be convicted of having committed a crime. But committing a crime and high treason are definitely very far apart.

In a statement published in Varoufakis' blog, Prof. James K. Galbraith said: "Our work ended for practical purposes in early May, with a long memorandum outlining major issues and scenaria that we  studied." It would seem beneficial to all if this memorandum were published.


  1. "he issue is whether, in the preparation of Plan B, laws of the country were violated. To hack into computer systems and/or to induce third parties to do that certainly sounds to me like a violation of laws, but I am no expert on Greek laws. "

    Really I cannot see how this is against the law, there is one organisation, the finance ministry. One department of the finance ministry is the tax office. How can that be illegal for the fiance ministry to get hold of data from a computer in the tax office (its own department!) to allow for contingency planning.

    To consider that illegal is a complete absurd charge. but I am no expert on Greek law either, but I would be surprised if anything was illegal here!

    Let us put it this way. there have not been any legal experts in Greece calling this behaviour illegal, otherwise we would have heard about it by now!. Companies do shift data all the time from one department to the next, government surely must be allowed to do the same!

    As far as these "treason charges" go, they are, of course, even more ridiculous.

    1. I give you one speculative settings:

      What I am wondering about (among other things) at this moment is this: Could it have been that the troika advised an online tax system based on a software with some type of copyright, and Yanis somehow got this wrong and understood non-open-source software as control by the troika? This option I doubt. But without doubt people can be blinded by their preconceptions and misunderstand.

      Or could they have tried to exploit a legal loophole that in fact European taxpayers only register for online tax accounts as self-employed or employers, not necessarily as employees, but do not sign a contract? Which ultimately would leave them open for such attacks.

      Add whatever other scenarios around Greece online tax accounts. Are there other tax laws that could protect them even if there wasn't a specific contract for online accounts?

      This is on simply one layer. Considering his critique of the larger Eurozone, even I am alarmed what his aims and that of his advisers are? Beyond unloading Greek debts on a couple of convenient scapegoats.

      Ultimately Plan B, not only the glimpses Yanis released in his desire to remain on the news instead his supposed larger cause had to be within Greek law.

      Besides, as Klaus has asked him to, why doesn't he publish it. After all he supports transparency, doesn't he?

    2. Some of the complainants are Greek lawyers one would hope they do have a knowledge of Greek Law. Presumably, Greece complies with EU Privacy Laws, which are quite strict. Have any charges been laid by the Prosecutors office? I think not and it can only do so if his immunity is withdrawn by Parliament. The probability of that happening is surely zilch?

      I doubt George Osborne or Jack Lew could access the records of the HMRC or IRS without breaking the law. AFAIK the HMRC and IRS operate at arms-length from the HM Treasury and US DoT - I'm surprised the Troika hasn't already imposed such a thing in Greece. But perhaps the independence of the Tax Office is a peculiarly Anglo-Saxon notion.

      The charge of 'treason' does seem far-fetched, but Greeks do seem to have a habit of histrionics. But again, no charges have been laid - just some complaints. I also find it interesting that the individual that it is assumed was fellow his conspirator and IT expert has denied any involvement.

      If Varafoukas did interpret non-open-source (proprietary) software as meaning under the control of the troika, then that would be yet another example of his utter incompetence and that of his so-called IT expert.

      I have to wonder if James Galbraith doesn't live off the reflected glory of his father John. His inclusion of his middle initial is surely a sign of his vanity, a trait he shares with Varoufakis. And he should not be confused with his brother Peter, who has a highly distinguished career as a diplomat.

      So cynical am I about Varafoukas, that I have to wonder if the 'treason charges' brouhaha is not just another one of his stunts to retain the media spotlight.


  2. Thanks Klaus,

    I was pretty startled, when I listened first and then read the transcript of the telephone conference. Strictly "plan B" doesn't sound democratic to me. More like misusing a country's people in a larger gamble strategy. One has to wonder about his expert adviser circle now, like James Galbraith. They didn't consider this idea odd?

    Admittedly it feels a bit like a fashionable ad hoc idea in times of Wikileaks and Edward Snowden. But I guess those experts could have looked into "how exactly the Troika controls the Greek ministry of finances".

    How dangerous are these events for the Eurozone or is it doomed anyway?

    Should Germany leave and all would be fine?

  3. "To put the contingency plan, the Plan B, into perspective: if Greece had stumbled into Grexit without any contingency plan on hand, the Finance Minister could have been legally accused. "
    I don't follow you: his plan B was intended to give additional liquidity to the government (within Euro), but does not help at all in case of sudden Grexit. (in fact, it becomes even useless in case of Grexit since BoG would no longer be forbidden to create money and lend to the govt)
    I am not aware that Varoufakis or MoF had prepared any contingency plan if they were forced to Grexit.

    To summarize, for me, YV's plan B is a trick to get around ECB T-bills limits and another escalation in the relation with EU. It could have lead to a break in discussions and Grexit, but does not help handle a Grexit.

    1. True: the declared purpuse was to allow the government to create liquidity, albeit liquidity which could not be converted into cash. In case of Grexit, this system would have made the transition to the issuance of a new currency more palatable.

  4. Is this part of the larger European conspiracy and should we all take care:

  5. I quite agree with you, the high treason accusation is just the typical hyperbole. Of cause he should create a plan B. What strikes me is the stupidity of his "kiss and tell" policies, I can only explain it with a narcissism that makes it necessary to be constantly in the headlines. Most of his actions defy his claims to be a game theorist. If a successful poker player has been bluffing on a hand, and then fold, he will most assuredly not show his cards. No doubt the other European nations had contingency plans, no doubt we shall only see them if/when they are implemented.

  6. Treason occurs only when there is both an illegal action and substantial harm to the National Interest. Varoufakis may merely have been blowing smoke to clear himself of the charge that he was incompetent and had no contingency plan. However, damage to the country certainly has occurred.
    The fact is hacking the Public Revenue Secretariat, in the Greek context, has a highly specific political meaning. Three years ago a scandal re. commercial use of confidential tax information gained publicity. Greece has comparatively weak Institutions and 'Treason' should be seen in that context.
    If a British Colonel gets drunk and shoots his mouth off, that is one thing. In Greece there was actually a 'Colonel's coup'.
    We would certainly be greatly incensed if George Osborne could get hold of our tax files. But we don't have a tradition of the ruling party locking up its opponents on tax evasion charges.