Αnother
reason why international banksters and speculators rushed to lend the
Greek government
Stock
market technical analyst P. Panagiotou reveals the whole
background of the process
The Greek
government decided to design a bond auction that, in order to be
held, the planned evaluation of the country should be postponed
first. The evaluation would remind the obvious: that Greece is not
out of the crisis, that the country has financial gaps and probably
will be led to a new memorandum and, of course, Greece's debt is
still not viable and needs to be treated substantially.
In order
Greece to attract investors like Goldman Sachs, as the Greek
government wanted and to build a picture of a "normal" bond
auction, has designed the latest bond issuance under unprecedented
legal and financial terms for a European and developed nation. This
was designed by the government under top secrecy.
A top
executive of a party of the opposition forced the Greek Public Debt
Management Agency to announce officially that Greece, for the first
time in decades, would issue bonds in financial markets which are
regulated according to the foreign and not the Greek law. More
specifically, the bonds are regulated according to the English law,
which is the most protective to the lender against the borrower.
The
government tried to block any publication or information concerning
its commitments to the private lenders. Due to this fact, on Thursday
April 10, just before the beginning of the bond auction, the Ministry
of Finance sent to the media a non paper according to which the bond
issue was designed under "specific law regime" so that the
private lenders to be persuaded to participate, and for this reason
there were "very strict conditions of publicity"!
According to
some information, the legal text of the specific secret lending
contract, disguised as a normal bond auction, contained a stipulation
known legally as "pari passu", which upgrades banks like
Goldman Sachs on the scale of institutional lenders, equalizing their
legal rights with that of the European nations who lent Greece under
memorandums.
Also
according to some information, the government has signed that in case
of delay or being unable to pay the interest or the capital of the
specific bonds, their private holders would have the right to impound
any part of the Greek public property except from the property
elements which are part of the cultural heritage of Greece.
One third of
the 5-year bond issue was sold to hedge funds which are investment
companies known for their aggressive way and short-term approach in
markets. In order government to serve its purposes, the Greek bonds
passed in the hands of hedge funds under unprecedented legal
stipulations of collateralizing public property, something which
equalize official lenders, like eurozone state-members, with these
hedge funds.
Like in the
case of Simitis administration, when Goldman Sachs lent Greece under
secret terms, in order the country to enter eurozone, the current
Greek government has borrowed from private lenders under a secret law
regime in order to gain the return to markets.
One of the
direct consequences is the creation of a "de facto"
situation for Greece, with the establishment of a new financial and
law "status quo" for the country. Therefore, in every
attempt of issuing bonds from now on, the lenders will demand from
Greece similar terms, different from the rest of the European
countries.
Therefore,
in the specific latest bond issue, interest was lower exactly because
of this specific law regime, which means that if any Greek government
in the future try to proceed in a borrowing process from the markets
under normal terms, similar to that of the European and developed
countries, the lending interest will rise, increasing the cost of
lending, even if the Greek economy would enter in a recovery phase
and debt would become viable.
Key
parts from the article by Panos Panagiotou, under the
title "Exit in markets under the terms of a Goldman Sachs
colony" , published on tvxs.gr website
http://www.tvxs.gr/news/ellada/me-oroys-apoikias-tis-goldman-sachs-i-%C2%ABeksodos%C2%BB-stis-agores
Comment:
This is a
particularly important information because it shows another reason
why the international banksters want the Greek experiment to be
completed. We will probably see in the future similar actions for
other eurozone countries which under the weight of their debt will be
forced to change the terms of borrowing from markets under neoliberal
governments guided by banking puppets.
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