Greek Tragedy: Downgraded Again, And The Prime Minister Accused Of Treason2 June, 2011, 4:00. Posted by Zarathustra
Tags: Economy, Euro Crisis, Europe, Greece, Peripheral
Friedrich Nietzsche, the philosopher who obviously inspired the name of this website, wrote a book called “The Birth of Tragedy”. The book focuses on Greek Tragedy and how the Greek Tragedy tradition ended.
I can hardly remember any detail of this book, except that what is happening now in Greece is no doubt a Greek Tragedy.
Just now, Moody’s once again but Greece ratings, from B1 to Caa1, despite the ECB’s reluctance of letting Greece default, and inventing ways to get around this, like rollover the debts (well, whatever it means, I just don’t care).
An even more bizarre and unreal story from Covering Delta of the Prime Minister of Greece George Papandreou and other MPs are being accused by Panos Kammenos MP of treason. According to that article, the Hellenic Postbank, a public banking arm of the Greek government, oddly purchased a $1.3 billion worth of credit default swap (CDS) to insure against a default of the Greek government in spring and summer of 2009 (so indirectly, the government bought protection against its own default?), and those CDS was then subsequently sold in December of 2009 to a private firm named IJ Partners for $40 million. Naturally, as the Greek debt crisis is getting progressively worse, the CDS in question is probably worth $27 billion today. The problem is, this IJ Partners is apparently owned by connected parties of none other but George Papandreou:
According to Mr. Kammenos’ accusations, the firm’s Vice President, Mr. Jose-Maria-Figueres, shares board membership on a separate NGO with none other than the Prime Minister’s own brother, Mr. Andreas Papandreou Jr.
This is not a confirmed story (in fact, it sounds very surreal), and IJ Partners was prompt to deny the accusation. As far as I am concerned, despite the bizarrely interesting nature of this story, that’s not particularly significant in any economic sense for the moment. Though as the crisis goes on in Europe, I think we should be worried about any potential political turmoil in peripheral countries, as Niall Ferguson pointed out earlier (see more on that here).