The Direct Damage
Following to the direct and consequent damage of 13 billion euro suffered by the Greek citizens and Taxpayers, on May 2010, Greece entered under an IMF, EU and ECB bailout scheme called “Memorandum”.
This is nothing the less than a tailor made Government lending program ruled by a Memorandum of Understanding (MOU) with the lenders, similar to those imposed in Argentina and other Latin America countries. This MOU was imposed in Greece after a real parliamentary coup organized by the Greek government, violating the primary and most essential principles of the Greek Constitution map.
There was not any referendum, Greek citizens were never asked in any way on that and decision was made in Parliament without to respect the quorum majorities required by the Greek Constitution for the international contracts and agreements signed by any Greek Government in charge. And the most terrible thing was that persons, institutions and corporations identified as responsible for the speculation and the financial crimes committed against the country, through years of government debt manipulation and falsities, they have been self appointed as the ultimate country rescuers.
That means Greek Government itself, Banks, Bank of Greece, ECB and EU Commission.
The Indirect Damage – Debt Restructuring
Through the IMF, EU and ECB M.O.U. bailout, Greek government debt real restructuring procedure started on May 2010.
This is a very important step, we need to understand.
MOU bailout modified both the nature and jurisdiction of the Greek sovereign debt.
This was the first, real restructuring procedure started on the Government debt of the country.
Greek sovereign debt issued until 2010, was under a form of a regular uncover debt, simply issued through government bonds, without any understanding securities or any other kind of collateral assets.
That means, existing Greek sovereign debt was not collateralized.
Going under the MOU bailout scheme, the 110 billion euro loan approved on May 2010, was the first Greek government debt issued as a collateralized debt obligation, similar to a CDO contract, and was approved only with the purpose of the down payment of the previous government bonds expires.
That means, Greece signed a new loan agreement, in order to pay older debts expires.
This is a typical and pure refinance operation.
But the real truth beside is that previous debts were not collateralized and new MOU debts they are.
Through this refinance procedure, Greece will gradually transform all the existing non collateralized sovereign debt, in a new, collateralized sovereign debt, offering as collateral securities all public properties, future revenues and all tangible and intangible assets of the country.
This is how sovereign debt nature was modified through MOU bailout agreement.
How That Will Happen ?
After the first 110 billion MOU loan agreement, signed on May 2010, a second one will follow.
This will happen as Greece will not be allowed to return to the markets on 2012 and 2013.
This is the reason why speculation against the country is continuing, even after the approval and the realization of the first MOU agreement.
Government’s financial policy agreed with the lenders of the MOU agreement, encourage international speculators to continue with manipulation against country’s national economy and sovereign debt.
Internal market experiences a day after day continues downturn, private business are constantly closing or bankrupting, inflation and unemployment are blowing, recession is running on an average 4% year rate, poverty and criminality are growing up, and all this explosive, hard recession economic mix, introduces Greece in the vicious circle of a new and continue deficit generation that will keep creating additional, new sovereign debt, as deficits could never be financed by the future economic revenues of the country, as GDP is constantly dropping down.
After all that, there will not be any market in the world intended to finance a country in such a financial situation, and that means on the year 2012 a second MOU bailout will follow the first one.
And again, this one will be also issued as a collateralized debt.
And again this will also be approved limited with the purpose to pay older government debt expires, continuing through this refinance procedure to transform the whole Greek sovereign debt into a new, collateralized debt obligation.
When over a 50% quote of the existing sovereign debt of the country will be transformed in a collateralized debt obligation, only then default will be leaved to happen in Greece.
In this way, all Greek national assets and resources will become ownership of the country lenders, as the new Government loans under the various MOU bailout agreements, not only will be 100% collateralized but they will also be regulated by the English Law.
And this is how jurisdiction of Greek government debt is gradually changing, as existing debt is regulated by the Greek law.
That means execution procedures on public properties and any kind of tangible and intangible assets will be admitted and Government debt transfer to any third parties, partially or totally, will also be free to happen.
After all that, Greece will never allowed in the future to be a sovereign country, as Government debt could be easily transferred under a regular factoring agreement to any physical person, institution, corporation or country, such as Turkey for example.
What Is The Actual Status Of The Case
The criminal charge case is now at the most important point.
Preliminary investigations are recently concluded, after a very detailed exam from both Prosecutor General Office and Greek Financial Police Authorities (SDOE).
On February 2011, we were invited by the Financial Police Dept in Athens to give additional information regarding Greek Govt bonds short selling transactions, between January – April 2010.
On this purpose we submitted an additional file with all that information.
On May 2011, Mr. Panos Kammenos, a deputy of the Greek Parliament, following to the Greek justice authorities investigation on the criminal fraud charge file, submitted a parliamentary interrogation to the Minister of Economy and Finance, asking from the Government to inform Greek Parliament on all the specific details regarding Govt debt Prime Dealers, CDS and Naked CDS Traders, Govt Bonds Short Sellers, Banks, Funds and physical persons indentified as buyers, sellers or short sellers and, additionally, to inform Greek Parliament on the official results of the recent EU and USA state and justice authorities investigations on Greek Govt debt speculation, CDS cartel frauds, etc.
After that, the complete charge file is now transmitted to the Prosecutor for the Financial Crimes at the Athens Court, who is starting with the main investigation procedure and, during this phase, he will investigate on all specific physical persons and corporations, both Greek and foreign citizens.
This is a criminal charge case and only physical persons can be indicted, that means all responsible persons indicted with the charge file, such as banks and funds principals, managers, officers, representatives, brokers, dealers, CDS traders, Short Sellers, etc., Govt Ministers and Officers, Bank of Greece principals, officers and directors, together with the others who will be indicted during the preliminary investigation process.
All those indicted persons will be called to the Prosecutor’s Office to explain their actions or omissions to act, that means they have to explain what exactly they did, how they did it, why they did it, on behalf of whom they acted, etc., etc.
Having a good experience on previous similar cases, I’m sure that this moment is very critical as a lot of them will start to talk.
Some of them because they’ll get afraid, others because they didn’t share any of the profits, some others because they didn’t got the profits promised by the speculators who organized the scam, etc., etc.
We trust in God, Justice and Common Sense, hoping that the Greek charge file will push other European citizens and taxpayers to do the same, as happened recently in Spain, where a similar criminal file was submitted to the local Justice Authorities.
Read latest developments about this issue here
For more information: Dr. Kiriakos Tobras * http://www.stopspeculators.gr/