FT: Europe's secret strategy to contain the firestorm from Grexit

EU and International Monetary Fund (IMF) officials had been working clandestinely for months preparing for a collapse of Greece’s banks, the newspaper said. Their secret blueprint, known as “Plan Z”, was a detailed script of how to reconstruct Greece’s economic and financial infrastructure if it were to leave the euro.

Officials

who worked on the previously undisclosed plan insisted it was not a road map to force Greece out of the euro – quite the opposite. “Grexit”, they feared, would wreak havoc in European financial markets, causing bank runs in other teetering eurozone economies and raising questions of which country would be forced out next, the newspaper reported.

Officials also said the detailed IMF blueprint included such drastic action as turning off all ATMs and reinstating border controls to prevent massive capital flight, it added.

According to one participant, no single Plan Z document was ever compiled and no emails were exchanged between participants about their work. “It was totally fire-walled even within [the institutions],” said the official.

The article also referred to German Finance Minister Wolfgang Schaeuble. "Several people who spoke with him said he viewed a Greek exit almost idealistically, as something necessary to save a European project that he had worked for his entire political career," it said.

Talk of Grexit within the eurozone receded with (German Chancellor Angela) Merkel's highly symbolic trip to Athens in October 2012, the FT noted.

Merkel seemed to have taken her decision after she returned from summer holidays. Officials said she had begun to sense "the weight of history on her shoulders."

The deal to release Greece’s 34.3 billion euro aid payment was struck just hours before an EU summit in November 2012 giving an end to speculations about the country's exit from the eurozone.
source: ΑΜΝΑ