They better start dusting out some jail cells in Greece because it looks as though some people will be occupying them... and very soon! Especially former premier George Papandreou and his sidekick and present Minister of the Environment and Energy George Papakonstantinou who were literally pinned to the wall these past few days from the testimony that was heard by some witnesses on the case of the inquiry into the case of ELSTAT. (Greek Statistics Authority). If the parliamentary committee that is probing this case, which is controlled PASOK at an 8-11 ratio, does not produce a result then the leader of the New Democracy party Antonis Samaras will since he has pledged to reopen the investigation once he gains power.
Last night it was Petros Christodoulou's turn to give testimony on how Greece was dragged into the arms of the Troika because it had an alleged "fake" high deficit. According to him, Greece unwisely roiled financial markets in early 2010 by threatening to appeal to the International Monetary Fund while trying to raise fresh loans before Athens called for an EU-IMF rescue in May 2010, Petros Christodoulou (the head of the Greek debt management agency) told the committee probing claims by former members of the Greek Statstics Authority (ELSTAT) that the 2009 deficit was artificially inflated .
Under pressure from Independent MP Panagiotis Kouroumblis, Christodoulou said that markets had "freaked" after the Greek government started to talk about resorting to the International Monetary Fund unless it received help from Germany, in the wake of a successful auction for 10-year bonds in early 2010. He said that the situation back then was aggravated by a series of “unfortunate” statements by former Finance Minister George Papakonstantinou and former premier George Papandreou, adding that Greece’s revision of fiscal targets was "inevitable" following pressure by the European Commission’s statistics service, Eurostat, after long delays.
He also said that Papakonstantinou’s assertion that efforts to put the economy back on track was like “changing the course of the Titanic” was something that was "unwise" to say, and confessed he himself was "stunned" when, in a period the spreads had appeared to be settling down in April 2010 and a month before Greece had to resort to the first package of bailout loans, he was informed that there would be another upward revision of the 2009 deficit.
At the same time he said that Papandreou’s claim that Greece would appeal to the International Monetary Fund if German funding was not secured was “unfortunate for the markets.”
The debt management chief also stressed that the essence of his testimony related to the shaping of the deficit figure for 2009, noting that “the level of new borrowing every year cannot be significantly larger than the level of the deficit announced regularly, as foreseen by Eurostat rules.”
“You cannot cheat the markets,” noted Christodoulou. The markets he was referring to knew that the deficit for 2009 would exceed the prediction of 6 percent of gross domestic product made by former Finance Minister Giannis Papathanassiou as the amount borrowed was bigger than the stated deficit. “Cash never lies,” underlined the debt management chief.
But the sense of the market was that Greece’s deficit had not exceeded 10 percent which explains why Papandreou had few problems securing funding in early 2010. “After the first, then second revision, it was clear we were going to hit a wall,” said Christodoulou. “As long as there is good faith, you can negotiate. When good faith is lost, the Europeans want to be twice or even three times as certain about the figures you are producing, I’m telling you that Greece has been studied more than any other country in the eurozone,” he added.
LOOK HOW NERVOUS PAPAKONSTANTINOU WAS ON WED. MORNING NEWS SHOW WHEN ASKED FROM BOTH REPORTERS ABOUT THE STATEMENTS BY CHRISTODOULOU
Christodoulou - who was appointed to the position by Papaconstantinou himself - nevertheless defended the deficit revisions as inevitable and suggested that the finance minister may not have had the "luxury" to postpone them because he was under close supervision and pressure from Eurostat.
Questioned about the concealment of Greek debt through swaps engineered by Goldman Sachs in 2001, Christodoulou said that this had been allowed by the rules used in the EU at the time and that other Eurozone countries had also resorted to the similar methods. "It was simply a question of degree. They would use the swaps or 'dressing up' to achieve a sudden improvement in their figures and enter the monetary union, but had it in mind that they would have to gradually present the true figures. They at least presented a manageable debt. Greece did not present it, with the result that it grew. In the crisis of 2008-2009 that could not be contained and hidden," he said.
In the wake of press coverage of his testimony on Wednesday, Christodoulou said there had been "pressure" from members of the committee to convert his statements into "accusations" against the former finance minister. "The essence of my testimony concerned the way the 2009 deficit was recorded, for which I explained at length that the amount of new borrowing each year cannot be significantly greater than the size of the deficit announced at regular intervals, in public, as foreseen by Eurostat rules," he said in a statement.
He also said that, in view of the potential damage to the interests of the country and its impact on public opinion that "selective references" to his testimony might have, he intended to request in writing that the full transcript from his testimony be released.
LISTEN TO WHAT ZOI GEORGANTA SAID RIGHT AFTER HER TESTIMONY LAST WEEK
The stench in this case only gets worse with the statements by the former head of the National Statistical Office, ND MP Manolis Kontopirakis who claimed that when he was getting set to send the figures to Eurostat - according to which the 2009 deficit would be 6% - Papaconstantinou asked him not to send this information because, as he noted this information would be "changed" and other figures would be sent instead.
But that is not all he said. Kontopirakis also shockingly revealed in his testimony that days after the 2009 national elections, the Ministry of Finance had "four different scenarios" in its hands to be used as suited.
ND is boycotting this investigation and none of its MPs are taking part, since Samaras is determined to probe this once he gets into power. The reason for this is because PASOK is not going to produce any results because it holds the majority in the probing committee. That is why none of the other cases that have been probed in the Greek parliament ever brought results. Our opinion here at hellasfrappe is that PASOK was determined to bring it up for investigation now, so that the results of the case can be used in its favor to fool voters in the upcoming election campaign. We firmly believe this case stinks, and we have no trust in Papandreou nor in Papakonstantinou since they have proven time and time again that they have never worked towards the interests of the Greek people.
Also, we have no trust in Christodoulou who is a former Goldman Sachs employee. He has worked in Goldman Sachs in London (1987-1988), in Goldman Sachs Canada (1988-1989) and in JP Morgan in London (1991-1998). Why should we trust him.
We don't trust the head of ELSTAT either since he too was hand selected by Papakonstantinou. Andreas Georgiou was staff of the International Monetary Fund (IMF) between 1989 to July 2010. He has been head of missions, responsible for the preparation, negotiation, and monitoring of economic programs with IMF member countries. From March 2004 to July 2010 he was deputy division chief in the IMF Statistics Department. During that period, among other things, he led the work of the statistical program for the methodological development and dissemination of new indicators of stability of financial systems (Financial Soundness Indicators).
A well orchestrated syndicate if you ask us. But all these men should keep in mind that there is no perfect crime... and at some point they will do the time, so start dusting, and inform Korydallos that sooner or later they will come!
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