The Yanis Varoufakis Plan B for the Greek economy in the event that the country clashed with creditors and went bankrupt was to partially pay civil servants with coupons, as revealed by his financial advisor Glenn Kim.
Kim, advisor to the former Greek finance minister Varoufakis and now Euclid Tsakalotos who succeeded him, explained Varoufakis’ alternative plan in a Beppe Grillo Five Star Movement Conference in Italy.
The parallel currency that the former finance minister had proposed included a parallel currency in the form of coupons. Public sector employees would receive the coupons that had a short expiration date and they would be used as currency.
The coupons would resemble the coupons companies give out for reduced price offers in super markets. They would be good only for tax payments.
According to Kim, the issue had been discussed with bankers and the plan could have went ahead if there was time. He also explained that in 2015 payments with credit and debit cards were not common in Greece and cash was the main form of payment. Varoufakis had branded the coupons “fiscal currency.”
As Kim explained, first of all, this currency would have to pass the “eighth test,” a system so simple to use that could be understood by an eight-year-old. The eight-year-old was Kim’s son who told him that the currency should look and smell like money.
In order for there to be no constitutional bonding, as it is forbidden to circulate currency for the repayment of debts, it has been decided that the currency would circulate for a certain period of time.
Specifically, it was decided to release coupons only for the 500,000 civil servants who were on the government payroll and the process would be simple and controlled by the State. The coupons would be good for 10% of their salary, as a larger percentage would virtually flood the voucher system. The coupons could only be good for paying taxes, so that the funds would automatically return to the State coffers.
In order to force civil servants to use the coupons, it was also decided that they would apply only for a certain period of time and then reissued with a reduced value. If one did not use them, they would lose some of their value.
Kim said that the project would work as a pilot and would not be permanent, since its impact on the economy could not be determined. The short expiration date on the coupons was deliberate so that they could be withdrawn immediately if it was found out that they have a negative impact on the economy.
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