Bloomberg Sues European Central Bank to Force Disclosure of Goldman Sachs FRAUD In Helping Greece Hide It's Debt
Dec 29, 2010 at 9:33 AM
DailyBail in Euro Crisis, Goldman Sachs Criminal Investigations, bloomberg lawsuit, ecb, europe, goldman sachs, goldman sachs, greece, greece, trichet

Video -- Dec. 22 Bloomberg -- Matthew Winkler, editor-in-chief of Bloomberg News, discusses the news agency's lawsuit against the European Central Bank.

More detail is here...

---

Bloomberg Sues ECB to Force Disclosure of Greece Swaps

Source - Bloomberg

Bloomberg News filed a lawsuit against the European Central Bank, seeking the disclosure of documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis.

The lawsuit asks the European Union’s General Court in Luxembourg to overturn a decision by the ECB not to disclose two internal documents drafted for the central bank’s six-member executive board in Frankfurt this year.  The notes show how Greece used swaps to hide its borrowings, according to a March 3 cover page attached to the papers obtained by Bloomberg News.

ECB President Jean-Claude Trichet withheld the documents after the EU and International Monetary Fund led a 110 billion- euro bailout ($144 billion) for Greece.  The dossier should be disclosed to stop governments from employing the derivatives in a similar way again and to show how EU authorities acted on information they had on the swaps, according to the suit, filed by Bloomberg Finance LP, the parent of Bloomberg News.

The EU is dependent “on member states taking an open and transparent approach in relation to their levels of debt,” Bloomberg said in its suit. “If Greece has failed to take such an approach in the past, there is a compelling public interest in relevant information being disclosed.”

The ECB case follows a 2008 lawsuit by Bloomberg LP seeking disclosure of the U.S. Federal Reserve’s records on emergency lending under the Freedom of Information Act. A group of banks is appealing to the Supreme Court over lower-court decisions ordering the Fed to identify loan recipients.

“Bloomberg is committed to transparent markets all over the world,” said Matthew Winkler, editor-in-chief of Bloomberg News. “Decisions made behind closed doors helped contribute to the global economic havoc of the last few years. Money flees secrecy and unanswered questions undermine the financial system and give some participants an unfair advantage. Confidence in markets grows with information,” he said. “Bloomberg wants the ECB, as well as the Federal Reserve and other financial institutions around the world, to end this damaging opacity.”

The Greek government didn’t originally disclose the swaps, designed to help it comply with the deficit and debt rules it agreed to meet when it joined the euro in 2001. Eurostat, the EU’s statistics agency, said last month the swaps added 5.3 billion euros to the country’s debt, without giving details. Repeated revisions of Greece’s national accounts, beginning last year, spurred a surge in borrowing costs that pushed the country to the brink of default and triggered a region-wide debt crisis.

ECB officials first spotted “a swap operation in unusual terms” in April 2009, seven months before the Greek crisis erupted, according to the March 3 cover note.

“It is wholly unclear what (if anything) the ECB did at that time to investigate further,” Bloomberg’s suit says.

Greece entered into a “large” number of private, off- market swaps from 2001 through 2007, Luxembourg-based Eurostat said in a report on Nov. 15. The agreements, which led to higher debt, were analyzed “in detail,” Eurostat said. A follow-up report on Greek data including swaps is due in weeks, a spokesman said at the time.

“We entered the European Union with great effort,” George Petalotis, a Greek government spokesman, told reporters in Athens today. “We don’t tolerate anyone doubting that. Whoever possesses different evidence can bring it out.”

Continue reading at Bloomberg...

###

 

I've covered this story extensively...

 

 

 

 

Article originally appeared on The Daily Bail (http://dailybail.com/).
See website for complete article licensing information.