Documents showing how Greece hid the size of its public debt for years — and the possible role of the European Central Bank — might still be disclosed to the public. The news agency Bloomberg decided to challenge the EU's culture of secrecy in court.
How Greece's hidden debt reached the courts
In spring 2010, Eurostat, the EU's statistical office, published a report indicating that Greece had veiled the true size of its public debt for almost a decade. Assets that were supposed to provide security for loans had in part been created through interest-rate swaps — agreements on future payments — between the National Bank of Greece and the government. The arrangement made the Greek economy look healthier than it really was.
In reaction to the allegations, two documents were prepared for the Executive Board of the European Central Bank (ECB). Gabi Thesing, a reporter at Bloomberg News, had seen a covering note referring to the two files and requested access to their full content. The request was refused. "The information contained in the two documents would undermine the public confidence as regards the effective conduct of economic policy," wrote Jean-Claude Trichet, the ECB president at the time, in his rejection letter.
A contradiction at the heart of the case
The refusal was upheld by the General Court, the lower chamber of the EU courts in Luxembourg, and was then appealed to the European Court of Justice. In its verdict the General Court concluded that disclosure would "undermine public confidence as regards the effective conduct of economic policy in the EU and in Greece", adding that the files showed only an out-dated snapshot of the situation in 2010 and that releasing them could mislead the public and the financial markets.
On appeal, Bloomberg pointed to a contradiction: the ECB claimed that the requested information was relevant to ongoing decision-making, while at the same time arguing it was misleading because it was out of date. "Quite simply, these two assertions cannot sit together," said Bloomberg's lawyer, Mark Stephens.
More than a document dispute
Formally, the appeal concerned the ECB's rules on access to documents and how they should be interpreted. But more was at stake. The case raised questions about the ECB's own conduct as the crisis was building:
- If the ECB knew that Greek officials were cooking the books, why did it not react?
- If it did not know, had it failed in its supervisory obligations?
Related questions surrounded the role of the investment bank Goldman Sachs, which had helped Greece carry out the interest-rate swaps — and which had earlier counted the ECB's then director Mario Draghi among its vice-chairmen and managing directors.
Three grounds for the appeal
Bloomberg relied on three main arguments before the European Court of Justice:
- that the General Court had disregarded an overriding public interest in favour of disclosure;
- that the refusal rested on the assumption that markets would react to out-of-date information, even though it was known to be incomplete;
- that the General Court had not taken account of recent European Court of Human Rights decisions holding that the right of access to information is part of freedom of expression under Article 10 of the European Convention on Human Rights (ECHR).
Although the Convention and its court belong to the Council of Europe rather than the EU, the EU refers to the ECHR in the Lisbon Treaty and intended to accede to it. One consequence of the appeal could therefore be that the EU's freedom-of-information regime — Regulation 1049/2001 — would need to be read in light of Article 10. That would run counter to negotiations in which the Commission and some member states had sought to amend the regulation towards less transparency. In such an appeal, outside organisations may be allowed to file observations and support either side. The wider mechanics of requesting EU documents are described in the guide to using European freedom of information.
Frequently asked questions
What documents did Bloomberg want from the ECB?
Two internal files prepared for the ECB's Executive Board that dealt with how Greece had used interest-rate swaps to understate its public debt.
Why did the ECB refuse to release them?
The ECB, and on first appeal the General Court, argued that disclosure would undermine confidence in economic policy and could mislead markets because the data was out of date.
Why did the European Convention on Human Rights matter here?
Bloomberg argued that Article 10 of the Convention protects access to information as part of freedom of expression, which could require the EU's access-to-documents rules to be interpreted more openly.