The European Union’s top court on Tuesday denied access to a key European Central Bank document which underpinned its decision to freeze vital funding to Greek banks in 2015, a turning point in the country’s financial crisis.
Former Greek finance minister Yanis Varoufakis and German parliamentarian Fabio De Masi had requested access to a legal opinion informing the ECB decision, which they say was illegitimate and aimed at forcing Athens to cave in during bailout negotiations with its lenders. But the EU’s General Court said the ECB was right to deny access to the document in order to protect its “space to think.”
“Contrary to the applicants’ claim, the ECB could legitimately take into account the hypothetical effects that the disclosure of the contested document could have on its space to think in 2015 and also after 2015,” the three judges said in their ruling.
Varoufakis and De Masi have two months to appeal the verdict.
The ECB decision to freeze the amount of emergency cash it was providing to Greek banks forced Alexis Tsipras’ government to temporarily close them and impose capital controls, sinking the Greek economy and weakening his negotiating position during heated talks with international lenders. Eventually, hard-liner Varoufakis resigned and Tsipras struck a deal with the EU that gave Greece cash in return for austerity measures and reforms.
The document requested by Varoufakis and De Masi relates to the granting of Emergency Liquidity Assistance (ELA) by the Eurosystem, which includes the ECB and national central banks
After their request was rejected by the ECB, the pair turned to the EU’s General Court.
The ECB was not immediately available for comment but a spokesman said previously that the legal opinion preceded the decision to withhold funding by at least two months, adding the ECB decided not to disclose it to protect its legal advisers and its internal deliberations.
The ECB’s Agreement on ELA, published in 2017, prohibits national central banks from providing emergency cash if it threatens price stability or payments in the eurozone’s monetary system. [Reuters]