Brussels denies Varoufakis’ claims that troika controlled Greek tax agency

Yanis Varoufakis (left) and Commission spokeswoman Mina Andreeva (right) [Both images from European Commission]

The European Commission on Tuesday (28 July) sharply denied claims by Greece’s ex-finance minister Yanis Varoufakis that creditors overseeing Greece’s bailout also controlled the country’s tax agency.

Varoufakis made the claim in a leaked conference call with London investors, during which he said he had been secretly building a parallel money system that involved hacking into his ministry’s computers because they were controlled by the creditors.

“On what Mr Varoufakis has been saying, the allegations that the troika was controlling the secretariat general of public revenues are false and unfounded,” Commission spokeswoman Mina Andreeva told a news briefing, referring to the creditor “troika” of the Commission, European Central Bank and International Monetary Fund.

“The secretariat general of public revenue is a quasi-independent entity, responsible for tax administration that is formally part of the ministry of finance,” she said.

“The Commission and IMF only provide technical assistance to the tax administration but certainly do not control (the agency),” she added.

“Alleging that the troika would be controlling the secretariat […] is simply not true.”

Secret plan in case of Grexit

The controversial Varoufakis resigned the day after Greeks voted against creditor bailout terms in a referendum on 5 July.

The government later accepted even harsher terms in a deal at an all-night eurozone summit on 12-13 July.

In a series of shock revelations, former economics professor Varoufakis told investors he had been secretly planning for a parallel system of liquidity that could allow a Greek exit from the euro “at a drop of hat”.

>> Read: Syriza rocked by reports of secret drachma plan

But Varoufakis said that in order to build the system, he was forced to work in secret as the access to the private data needed was handled by the tax agency which “is controlled fully and directly by the troika”.

“It was not under control of my ministry […] it was controlled by Brussels. The general secretariat is appointed, effectively, through a process that is troika-controlled and the whole mechanism within,” he said.

The revelations involving Varoufakis overshadowed the start of work in Athens between the Greek government and its international creditors on launching a third bailout programme for Greece by mid-August.

>> Read: A frosty welcome for Greece’s hated creditors

“I don’t think the Commission will engage into looking into any conspiracy plans,” Andreeva said when asked further about the Varoufakis accusations. 

“It is important not to look into the past, but the future,” she said.

Eurozone leaders reached an agreement on a programme to save Greece from bankruptcy after 17-hour talks on 13 July.

>> Read: Eurozone reaches ‘laborious’ tentative deal on Greece

If approved, this will be the third rescue programme for Greece in five years. It will be managed by the European Stability Mechanism (ESM), the eurozone permanent crisis resolution fund that was initially set up five years ago in an effort to save Athens from bankruptcy.

Here is a look at what Greece must do:

  • request continued support from the International Monetary Fund after its current IMF program expires in early 2016
  • streamline consumer tax and broaden the tax base to increase revenue. Laws on this are due by Wednesday
  • make multiple reforms to the pension system to make it financially viable. Initial reforms are due by Wednesday, others by October
  • safeguard the independence of the country's statistics agency
  • introduce laws by Wednesday that would ensure "quasi-automatic spending cuts" if the government misses its budget surplus targets
  • overhaul the civil justice system by 22 July to make it more efficient and reduce costs
  • carry out product market reforms that include allowing stores to open on Sundays, broadening sales periods, opening up pharmacy ownership, reforming the bakeries and milk market and opening up closed and protected professions, including ferry transport
  • privatise the electricity transmission network operator unless alternative measures with the same effect can be found
  • overhaul the labour market. This includes reviewing collective bargaining, industrial action and collective dismissal regulations
  • tackle banks' non-performing loans and strengthen bank governance
  • significantly increase the privatization program, transferring €50 billion worth of Greek assets to an independent fund, based in Greece, to carry out the privatisations
  • modernise, strengthen and reduce the costs of Greek administration, with a first proposal to be provided by 20 July
  • allow members of the three institutions overseeing Greece’s reforms - the European Central Bank, IMF and European Commission, previously known as the 'troika" - to return to Athens. The government must consult with the institutions on all relevant draft legislation before submitting it to public consultation or to parliament
  • reexamine, with a view to amend, legislation passed in the last six months that is deemed to have backtracked on previous bailout commitments.
  • 20 August: Bailout talks expected to conclude

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