accusations against Prime Minister George Papandreou on CDS contracts. The story was first surfaced by olympia.gr and since then has been covered by the majority of the blogs… but for some odd reason has been totally ignored by the Greek mainstream media.
Following a question by Austrian MP Andreas Mölzer (NI) at the end of
June to the EU Parliament asking if they were aware of the situation the following answer was given yesterday:
Answer given by Mr Rehn
on behalf oo the Commission
The Commission is not aware of the alleged transactions mentioned by the Honourable Member, and therefore has no other comment on them.
The prohibition of insider trading is dealt within the European Market Abuse Directive and its investigation and enforcement is primarily the task of national competent authorities. Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse), OJ L 96, 12.4.2003
“The Prime Minister of Greece, G. Papandreou, has been accused in the Greek Parliament of making a fortune out of Greece’s woes through insider trading. In 2009 the conservative Government apparently bought credit default swaps (CDS) worth EUR 1 billion (1 000 million), which were sold to Papandreou at a profit close to EUR 30 million in October of that year, in other words at a time when the extent of the problems on the financial market was not yet known, but a bail-out was already being negotiated behind the scenes with the International Monetary Fund (IMF). The sale of the credit default swaps, which could turn Greek bankruptcy into a lucrative deal, occurred at the best time for the buyer and a bad time for the seller. Because of the bail-out packages, the credit default swaps are now thought to be worth EUR 22 billion. This means that Papandreou will profit if Greece fails to put its house in order.
1. Does the Commission know about these accusations?
2. How has it responded or how will it respond?
3. If it did not previously know about the accusations, what does it propose to do about them?
4. What will be done to prevent this example being followed in other countries by those whose position of power gives them a decisive say in the handling of debt?