Nobel Prize winning economist Paul Krugman questioned the surprised reaction many have had to reports that the Greek Finance Ministry was considering an alternative plan for the country’s economy.
“I mean, really: it would have been shocking if there weren’t contingency plans. Preparing for something you know might happen doesn’t show that you want it to happen,” he wrote in his New York Times column on Monday afternoon.
In the past few days, reports and a recording have surfaced that alleged former Greek Finance Minister Yanis Varoufakis was considering to adopt a banking parallel system by hacking the Greek tax system. The system would enable a quick conversion to the Greek drachma currency, if it came down to that.
In the recording, Varoufakis reveals that Greek Prime Minister Alexis Tsipras had authorized him to look into the possibility but did not give the Finance Minister clearance to implement the plan. Varoufakis later confirmed this Plan B.
Following Greece’s preliminary bailout agreement with international creditors, Krugman had revealed his surprise when it was reported that Tsipras and his coalition government had not prepared an alternative plan in case negotiations proved futile.
The Princeton University professor had been highly critical of international creditors’ behavior toward Greece during negotiations, which he had agreed were a coup on the Greek government.
“The issue now becomes whether Tsipras was right to decide not to invoke this plan in the face of what amounted to extortion from the creditors,” he wrote. “I think he called it wrong, but God knows it was an awesome responsibility — and we may never know who was right.”
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