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Greek PM does not rule out legal action against US banks

Posted by seumasach on May 18, 2010


16th May, 2010

Greek Prime Minister George Papandreou raised the possibility of taking legal action against US banks which he said in an interview on Sunday bore “great responsibility” for Greece’s debt crisis.

Asked in an interview with CNN whether Greece was the victim of investment banks, he said: “I think, yes the financial sector, I hear the words fraud, lack of transparency, so yes there is great responsibility here.”

When the interviewer followed up by asking whether legal action were a possibility, he responded “I wouldn’t rule out that this may be a recourse,” according to extracts of the interview aired on Greek public television.

The Greek parliament is currently looking into deals Greek authorities carried out in 2000 with help from Goldman Sachs(NYSE: GS – news) that allowed them to mask the extent of Greece’s debts through the use of complex financial instruments.

“Right now there is a parliament investigation in Greece, we are looking into the past how things went in the wrong direction and what kind of practices were negative practices,” Papandreou said.

German Chancellor Angela Merkel has led criticism in Europe against banks’ role in the debt crisis, slamming “treacherous” practices during the Greek drama and urging governments to crack down on speculators hunting profits in the turmoil.

Greece is paying a painful price for its past overspending with the government forced to slash civil servants’ and pensioners’ pay while raising taxes as a condition for a 110 billion euro EU-IMF bailout.

However, a poll published Sunday in the Ethnos newspaper found that 58.8 percent of the 1,028 people surveyed expected the country to steer clear of bankruptcy while 36.6 percent considered default inevitable.

While 56.2 percent of those polled by the Marc SA institute considered the austerity measures to be “necessary”, 87.8 percent judged them to be “unfair”.

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