Brussels, 14/04/2010 (Agence Europe) - Drawing lessons about Greek budgetary and statistical meanderings over recent years, in an effort to enhance European economic governance, was the subject of the hearing at the European Parliament on Wednesday 14 April. In an effort to identify the loopholes, mistakes or ploys that led Greece to the edge of a precipice, the economic and monetary affairs committee brought together Commissioner Olli Rehn, the director of Eurostat, representatives from the financial sector, such as the president of Goldman Sachs USA and the president of the International Swaps and Derivatives Association (ISDA).
After having mentioned the main elements in the communication to strengthen coordination of the economic policies, which he will present to the College on 12 May (see other article), the commissioner returned to a number of points in detail. He rejected the idea of Derk Jan Eppink (ECR, Belgium), who had asked whether exclusion from the eurozone in the case of non-respect of the rules would be the best way of keeping a country under control. Rehn said that this would require amendments to the treaties and “I have a number of reservations about the possibility of a forced exit from the euro”.
At the end of the investigation into the quality of Greek statistics, Eurostat pointed out that the Greek government had used certain innovative derivative products in the past in an effort to artificially reduce its debt. This was immediately acknowledged by Walter Rademacher, the director general of Eurostat. But to what extent are Eurostat and the Commission aware of the financial engineering used by some member states to mask their national accounts, asked José Garcia Margallo y Marfil. In the case of Greece, it was the use of swaps, with the assistance of Goldman Sachs, which was criticised. Although they were not strictly legitimate, the swaps operations were legal at the time (they have not been so since 2008), pointed out Rehn. While other countries, such as Italy, Poland, Belgium and Germany, may have used such creative mechanisms, they have since revised budgetary information to take account of these transactions, Rademacher said. However, “it is likely that Goldman Sachs wasn't the only institution” taking part in such operations.
Werner Langen (EPP, Germany) then asked if the European Commission intended to pursue Goldman Sachs for its involvement in masking of public accounts. A cautious Olle Schlmidt (ALDE, Sweden) pointed out that “our assembly must also accept its share of responsibility” for having allowed Greece to join the euro almost 10 years ago. “It's not about pointing the finger of blame,” Rehn agreed. “The problem is not that it wasn't known what was happening, but that, right now, we don't want to build Europe,” stated Syulvie Goulard, calling on the Commission once again to be a central institution which promotes the common interest and stops playing with member states. The Commission gave assurances that the Commission, as the guardian of the treaties, did indeed intend to use its right of initiative on economic governance and in other areas. (A.B./transl.rh/rt)