‘Gouvernement Sachs’ and the death of a democratic Europe?

Source: New Economics


Newly appointed technocrats in Italy and Greece do not have the interests of the European people in mind.

So much has happened in Europe over the past year that you may not remember the fuss about the role of a certain global investment bank in the Greek debt crisis early in 2011 Goldman Sachs came under massive criticism for helping Greece raise $1 billion of off-balance-sheet funding in 2002 through a ‘currency swap’, which European Union regulators apparently knew nothing about until February 2010. At the time, Goldman was criticised for helping the Greek financial situation appear considerably better than it actually was, making it easier for the country to enter the Euro. After the Enron scandal in 2005, Goldman sold the swap to the National Bank of Greece.

You probably have noticed that over the last ten days two democratically elected leaders of sovereign European states, one the third largest economy on the continent, were forced from office without any form of consultation with their nation’s people. At the same time, the new President of the European Central, Mario Draghi was put into place. Astonishingly, all three men have strong links to Goldman, as revealed in this Le Monde article.

Draghi was vice-president of Goldman Sachs Europe between 2002 and 2005. He was responsible for “companies and sovereign” which oversaw, among other things, “currency swap” deals (Draghi denies he was involved in the Greek one).

But at least Draghi was appointed to post in the expected fashion. Greek premier George Papandreou made the mistake of attempting to give some democratic legitimacy to his departure by offering a referendum. All hell broke loose in the markets and the result was not only was the referendum pulled but he was forced to resign. His replacement, Lucas Papademos, was in charge of the Greek Central Bank from 1994 until 2002 and thus oversaw Goldman’s “swap” deal.

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