ECONOMY

Overpriced bonds affair remains subject of political controversy

The government yesterday stood by a statement by Prime Minister Costas Karamanlis in Parliament on May 3, according to which the securities firm Acropolis, which has been involved in the sale of overpriced bonds to social security funds, was also involved in suspect practices before the present government came into office in 2004. «The data submitted by the prime minister to Parliament last week correspond to reality,» alternate government spokesman Evangelos Antonaros told reporters. He was commenting on a statement by Acropolis which said: «What the prime minister claimed does not correspond to reality and was evidently the product of mistaken information.» «We are certain that the morals, honesty and integrity of the prime minister would not have allowed him to make charges against Acropolis while a judicial investigation is under way if he was in possession of the right information and the opportunity to evaluate all the parameters and data of the issue.» Acropolis said that all its sales of government bonds to social security funds were based on competitive offers. The government’s image over the last two months has been battered as a result of the bonds affair, with the opposition charging serious responsibility in the mishandling of the reserves of social security funds, the heads of which are usually government appointees. The affair indirectly led two weeks ago to Karamanlis’s dismissal of Labor and Social Security Minister Savvas Tsitouridis, who was largely associated with a number of appointees and subordinates of questionable caliber. Hearing Yesterday, the main opposition accused the ruling party of procrastination in setting a date for a hearing by Parliament’s financial affairs committee of key figures in the sale of an overpriced 280-million-euor structured government bond to the civil servant’s auxiliary pension fund (TAEDY) in February. Officials of bank JP Morgan, one of the intermediaries in the sale which a month ago offered to buy back the bond, said yesterday that «the bank could not ignore the request of the Greek Parliament for information.» They added, however, that it had still not received an invitation from the financial affairs committee. Separately, a government plan to have specialized firms audit pension funds’ investments in structured bonds attracted only one offer, from Grant Thornton.