Venizelos: Schaeuble twice proposed return to drachma; capital controls, ‘humanitarian aid’

Former PASOK party leader and finance minister Evangelos Venizelos this week revealed that powerful German Finance Minister Wolfgang Schaeuble on at least two occasions proposed a “Grexit” prospect, complete with capital controls and a humanitarian aid package.

Speaking before a Parliament committee convened to examine the issue of the public debt, Venizelos first defended his handling — as finance minister — of the private sector involvement (PSI) “haircut”, which sliced more than110 billion euros from Greece’s debt but rendered bonds held by private investors, individuals, investment funds and other institutions, worthless.

Referring to Schaeuble, he said that at one closed-door meeting in the summer of 2011, the former referred directly to the prospect of a voluntary return to the drachma. Venizelos continued by saying that the German FinMin acknowledged that a major humanitarian crisis could then emerge in the country.

As such, Schaeuble claimed that a “few billions of euros” could be made available to deal with the crisis, along with a “air-lifted caravan” to supply hospitals, schools, daycare centers etc.

“Of course, you’ll receive sealed euros from ATMs, in other words, non-transferable; in essence, drachmas, until a new currency is printed, which will be 50 or 60 euros a week,” Venizelos quoted Schaeuble as saying.

The veteran lawmaker nevertheless added that no one on the Greek side was willing to accept such a prospect.