Friday, 2 December 2011

The solution to the debt crisis: 1 GRD = 1000 EUR

The"Greek crisis" has many hidden aspects which skilfully those, few, political officials who know have kept in shadow, blocking the Parliament and the Greek people to know. Some of these relate to the bargaining power of Greece to the Troika and private lenders.

In the first part of the ongoing series of articles revealing the biggest secret of the Greek crisis mentioned in the law concerning the Greek bonds, an issue which I highlighted in the article "The secret bargaining chip of Greece's debt" from July 2010 ( found in the book "Case Greek Crisis, Strange Coincidences" versions of Lebanon), presenting a series on the subject of reports of leading universities and law firms.The revelations in the article caused a sensation, but it was not until fifteen months later that the issue had large dimensions, where in a series of articles and publications in presented evidence suggesting that the Greek government had agreed to convert the law that regulates the Greek bonds from Greek to English, in return for securing PSI + includes mowing part of the Greek debt by 50%.

In my call for help to inform the House about what would such a concession to lenders for Greece, responded, first, the independent member of Parliament,  Mr. Panagiotis Kouroumplis (former MP of PASOK who was thrown out of PASOK by Mr. Papandreou when he refused to vote the midterm plan), who tabled in Parliament on 07 November the first question to the Minister of Finance Mr Evangelos Venizelos (not yet received a reply). This was followed by two other related topical questions, one of them to the Prime Minister, Mr Lucas Papademos, by the chairman of the Synaspismos Party, Mr. Tsipras and then the  Deputy Finance Minister Mr. I. Mourmourasissue mentioned it in his speech in the House

In this article, a new dimension to the issue will emerge, which has to do with the possibility of Greece, if abandoned by their partners and return to the drachma, to pay at least the 206 billion sovereign debt in the hands of individuals with 206 million drachmas or even 330 billion of bonds governed by Greek law with 330 ex DR.Let's see how it can be legally done through international reports and a special advocate from the UK, partner of an international company in Switzerland and lawyer in New York and Paris, who has prepared studies for the euro area and the law of the Member States bonds for more than ten years and has recently been extensively involved with the case of Greece.When Greece issued a bond in euros governed by Greek law, the bond is issued in the legal currency of Greece at that time. That is, if the legal currency is the euro, on the Greek law this will be the currency of the bond (and bond will be payable in Athens).If, however, Greece for some reason withdrew from the euro area and began issuing the drachma, it would have to determine through Parliament, by law, the rate of new drachma to the euro immediately after the Greek courts for the currency which would be the bonds payable. Under Greek law would be a new penny and not the euro, since the new drachma would be the legal currency of the country. 

The rate to be set by the Greek parliament would apply both to repay the bonds governed by Greek law, which is currently EUR 330 billion, and any other economic activity that would include the use of the drachma within and outside Greece.Thus, Greece has the inalienable right under law to adopt, if desired, a compulsory for all citizens, lenders, Troika, etc. rate, for example, 1 GRD = 1000 EURO making that appreciation rather than depreciation currency. In this case Greece could pay the entire debt that is governed by Greek law to new drachmas, that is to pay 330 million drachmas on to repay a debt of 330 billion. So, there would be only 35 billion in bonds governed by English law, which would constitute a debt of less than 15% of Greek GDP. Exactly what France did without legal trouble in 1960 with the creation of the new franc at a rate of 1 new franc = 100 old francs. So did Germany and Austria after the Second World War. The goal is to reduce a debt that has become odius to allow life to continue to be protected and not to be threaten or finish.

"Νew coins have been circulated with no major legal challenges in history," says lawyer expert on the Financial Times, adding that if the bondholders of Greek bonds governed by Greek law (90% of the debt, ie 330 billion , falls into this category despite the Memorandum which has not passed from the House - In the most cautious estimates, and if you do not include bonds Troika and the ECB, at least 206 billion euros of bonds are governed by Greek law) try to deposit lawsuit against Greece alleging that the rate is unjust, the Greek courts will have no choice but to apply the law of Greece and to reject the request of bondholders vindicating the country.

But even if bondholders attempt to file a lawsuit against Greece in international courts "over the issue of jurisdiction (which probably will not overcome) will face well-documented case on the bonds of Serbia and Brazil after the Second World War II, "says the Financial Times the specialist lawyer.Since Greece pay lenders and dismissal of the shackles of debt, could allow the drachma to float against other currencies which would result in an understatement, with the aim of increasing competitiveness.One should not make the mistake of believing that these are a rough approximation of a very important issue. There are studies of leading universities and law firms that confirm the validity as mentioned here and which are available to MP or journalist whoever wants to help highlight the issue. However, one should not make the mistake to assume that all this is easy to implement and will have very serious consequences for Greece.

So what, primarily, we must understand is that Greece is in the hands of a number of advantages and options due to the fact that the law of 90% of government bonds is Greek and as this does not confer a legal advantage and as long as Greece does not accept the conversion to the English law, nor the troika nor the lenders can essentially blackmail, because it is Greece that is 100% legal and covered the rest are completely uncovered.The legal dimension of the Greek crisis shows that Greek officials concealed the truth from the Parliament and the Greek people and never brought up the legal advantages of Greece and the fact that in reality no one can blackmail for anything, except to attempt to work with Greece. And as I said in previous articles, what is true for Greece applies in a great extent to Ireland, Spain, Portugal, Italy etc, creating a scene of terror both for European banks which have lent about 9 trillion in Eurozone countries and for U.S. banks that have insured this debt.

So, if the Greek government granted the law of Greek bonds to bankers to obtain the agreement of the PSI + or otherwise allow the conversion law bonds from Greek to English, it will have deprived Greece, the largest bargaining "weapon" and the only legal advantage which could save it if seen its partners to leave.(With information from the Financial Times - The expert in question is a lawyer: By Gilles Thieffry, Solicitor (England and Wales), Member of the New York bar, Avocat au Barreau de Paris, and Partner at GTLaw, Geneva)

Panos PanayiotouHead of stock market technical analyst

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