Econintersect: On 06 February 2014 the European Union Court of Justice rejected a freedom-of-information request by Bloomberg News to access two internal ECB papers. The court cited “procedural errors” by the plaintiffs. In late 2011 two investigative analysis articles by ECB Watch were published by GEI Analysis that are related to the current Bloomberg case. One of these, EU Ignores Falsification of Greek Public Finance Data, charged a cover-up by the EU of criminal activity by the Greek government in 2001, aided and abetted (perhaps with complicity?) by Goldman Sachs. It was alleged that Goldman created swap vehicles and transactions that enabled the true debt to GDP ratio of the country to be hidden from the public record.
The second article, Mario Draghi Nomination Based on Deception, alleged that the current ECB head, Mario Draghi, who worked for Goldman Sachs at the time of the Greek manipulations, was complicit in the deception by reason of executive responsibilities with Goldman starting the year after the first swaps were set up, with continuing responsibility for the region into 2005 when a restructuring of the securities was effected to continue to hide the true indebtedness of Greece. ECB Watch further charged that Draghi lied, certainly by omission and perhaps by commission, in his appointment hearings for the ECB post.
At the time the two ECB Watch articles were written for GEI Analysis, Bloomberg was in the process of trying to get the ECB records related to the swaps transactions. Now, more than two years later they are still trying and apparently after having been pushed back toward square one.
Why did Greece enter into such nefarious activity? They were trying to satisfy the debt/GDP ratio requirements to establish Eurozone membership and then to maintain the relationship.
“Our case has always been about the public’s right to know if EU officials allowed Greece to hide its deficit, which helped trigger Europe’s debt crisis,” Bloomberg News Editor-in-Chief Matthew Winkler said. “We are disappointed with the court’s ruling and we will continue our work to bring more transparency to markets in Europe and around the world.”
Bloomberg’s freedom-of-information request was twice rejected by the ECB before the news organization sued in December 2010. A lower EU court in 2012 ruled that disclosing the documents “would have undermined the protection of the public interest so far as concerns the economic policy of the European Union and Greece.”
Bloomberg sought access to two internal papers drafted for the central bank’s six-member executive board. The first document is entitled “The impact on government deficit and debt from off-market swaps: the Greek case.” The second reviews Titlos Plc, a structure that allowed National Bank of Greece SA, the country’s biggest lender, to borrow from the ECB by creating collateral.
- ECB Wins EU Court Ruling to Keep Greek Swap Information Secret (Stephanie Bodoni and Elisa Martinuzzi, Bloomberg, 20 February 2014)
- EU Ignores Falsification of Greek Public Finance Data (ECB Watch, GEI Analysis, 18 December 2011)
- Mario Draghi Nomination Based on Deception (ECB Watch, GEI Analysis, 27 December 2011)