Lawmakers in Italy and Germany are urging their governments to demand greater transparency from the European Central Bank after a court upheld its decision to keep documents secret that show what the central bank knew about Greece’s finances before its bailout.
“Technocracies and kleptocracies cannot prevail over politics and democracy,” Senator Elio Lannutti, a member of the Italian Values party, said in a phone interview today. “The ECB is impermeable to transparency.”
Lannutti, speaking in the lower house of parliament on Dec. 5, asked the government for clarity on how Greece masked its debt and how it plans to eliminate any doubt that the country’s financial situation may be worse that what it reported. He also sought an estimate of how much it may cost Italy to save Greece.
The European Union’s General Court in Luxembourg on Nov. 29 ruled that the central bank was right to withhold documents from 2010 because disclosure “would have undermined the protection of the public interest so far as concerns the economic policy of the European Union and Greece.” The case brought by Bloomberg News was the first legal challenge of the ECB to make public details of its decision-making process, leaving one of the region’s most powerful institutions free from public scrutiny.
Greece’s two bailouts totaling 240 billion euros ($313 billion) have pushed countries from France to Spain to introduce austerity measures in an effort to curtail their budgets and reassure investors of their ability to repay their borrowings.
Germany and Italy face elections next year, with the euro crisis taking center stage in campaigns in both countries. About 43 percent of Germans want Greece to exit the euro area, according to a poll in Stern magazine published today.
German lawmakers told Die Welt that the court was wrong to allow the ECB to withhold the files, the newspaper reported.
The German government must “wholeheartedly” support the disclosure of the documents because Germany is on the hook for billions of euros on the back of the Greek bailout, said Klaus- Peter Willsch, from Chancellor Angela Merkel’s ruling CDU party, according to the Welt report today.
Opposition lawmaker Carsten Schneider from the SPD said because the ECB is one of the main players in the financial crisis, it has to adhere to the highest level of transparency and the documents should at least be available to national parliaments, die Welt cited him as saying.
Green Party finance spokesman Gerhard Schick said it’s “in the public interest” to disclose the ECB documents, according to Die Welt.
The central bank already sets narrower limits on its disclosures than its U.S. equivalent, the Federal Reserve. The court’s decision shows the ECB has too broad a discretion to reject requests for disclosure, academics and lawyers have said.
Bloomberg sought access to two internal papers drafted for the central bank’s six-member Executive Board. The first document is entitled “The impact on government deficit and debt from off-market swaps: the Greek case.” The second reviews Titlos Plc, a structure that allowed National Bank of Greece SA (ETE), the country’s biggest lender, to borrow from the ECB by creating collateral from a securitization of swaps on Greek sovereign debt.
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