Monday, 5 September 2011

Greek Prime Minister speculating against his own country

Parliamentary questions
27 June 2011
Question for written answer
to the Commission
Rule 117
Andreas Mölzer (NI)

 Subject: Greek Prime Minister speculating against his own country
The Prime Minister of Greece, Giorgos 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?

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