The Financial Times have published a report by Peter Spiegel on the infamous “Plan Z” composed by European Commission, IMF and ECB officers and the events in 2012 almost resulted in a Grexit.
In his report, Spiegel explained that the “Plan Z” was meant to prepare Greece for the probability of being forced to leave the Eurozone, as they fear a Grexit would cause bank runs in other countries and further perpetuate the crisis. Spiegel notes that in 2012 the prospect of a SYRIZA victory in the elections prompted Europeans to prepare an exit plan, as they feared the anti-bailout rhetoric would be catastrophic.
According to the FT’s report, the first public mention of a mention came at the November 2011 G20 summit in Cannes, where German Chancellor Angela Merkel and French President Nicolas Sarkozy aired the idea of a voluntary Greek exit from the euro, catching many other Europeans by surprise.
Spiegel reveals that work for Plan Z began in January 2012 and was overseen by Jörg Asmussen, Thomas Wieser, Marco Butti and Poul Thomsen. According to the report, the plans were kept confidential and no documents were compiled or emails exchanged to ensure utmost secrecy and discretion. The plan involved drastic actions, such as shutting down ATMs and reinstating border control to prevent capital from being exported, however considerations for printing a new drachma were scrapped for practical reasons.
At the Los Cabos G20 summit the European leaders held a teleconference and decided to support Greece on condition that the Greek government agrees to fulfill its bailout commitments. The journalist goes on to explain behind-the-scenes details regarding the negotiations between the European leaders, who were concerned that the problems in Greece would spread.
The election of Antonis Samaras as Prime Minister in 2012 calmed the Europeans, who had feared that a SYRIZA government would derail all of their efforts. After Mr. Samaras was elected though, he met with Manuel Barroso, who urged the Greek PM to focus on implementing the bailout requirements Greece had agreed to, rather than demand renegotiation. A PASOK officer argued that Samaras “did the most U-turn in history”.