EU: Central bank taken to Court about hidden crisis reports
News agency Bloomberg has brought the European Central Bank (ECB) to court in order to shed a light on the building up of the financial crisis: Did Greece play tricks with the numbers to hide its borrowings?
In April 2009 seven months before the Greek crisis made the headlines, Bloomberg News obtained a cover page to a dossier, suggesting how Greece had hidden the bad state of its economy.
The countries large borrowings had been veiled by the use of derivates, or swaps – agreements of future payments.
This would make Greek economy look good, or less bad, on paper.
The dossier contained two internal documents drafted for the central banks six-member executive board - ”The impact on government deficit and debt from off-market swaps. The Greek case (SEC/GovC/X/10/88a)” and ”The Titlos transaction and possible existence of similar transactions impacting on the euro area government debt or deficit levels (SEC/GovC/X/10/88b)”.
Bloomberg News requested the documents but in vain.
»The information contained in the two documents would undermine the public confidence as regards the effective conduct of economic policy,« ECB President Jean-Claude Trichet wrote in a rejection letter in October last year.
This answer led Bloomberg to file a lawsuit against the ECB to the General Court, the lower instance of the EU-courts in Luxembourg.
Matt Winkler, Bloomberg’s editor-in-chief commented on the agency’s own TV-channel:
"It's very straight forward. We are seeking full disclosure of documents that show how Greece was able to finance itself into a predicament that became the European debt crisis as we know it. It's entirely to the benefit of all the members of the EU, all of the citizens, all the taxpayers and for sure the financial markets. Transparency is something that has a way of enlightening perspective."
Bloomberg requests the documents referring to the central bank's decision of access to documents from 2004. These access rules of the bank – not be confused with the general regulation of access to EU-documents – were signed by the bank’s President Jean-Claude Trichet.
The rules say the public has a right to access documents held but by the bank they also contain a rather extensive list of exemptions.
According to Bloomberg the ECB has failed to consider, or misidentified, the public interest in favour of disclosure in relation to three of these exemption.
The ECB has declined to comment on the lawsuit.
It is not yet known when the General Court will hold its oral proceedings, or if any EU member states will intervene on the side of Bloomberg, or the ECB, in the case.