PM hints at action against US banks

Prime Minister George Papandreou indicated yesterday that Greece might take legal action against certain US banks which, he said, bear «great responsibility» for the debt crisis engulfing his country. Asked during an interview with CNN whether Greece had been a victim of US investment banks, Papandreou said: «I hear the words fraud and lack of transparency. So yes, yes, there is great responsibility here.» Questioned further about the possibility of Greece taking legal action against these banks, Papandreou responded: «I wouldn’t rule out that this may be a recourse.» Papandreou also referred to an investigation by Greece’s Parliament into deals struck by Greek authorities in 2000, with help from Goldman Sachs, that allowed them to mask the extent of the country’s debts through the use of complex financial instruments. «We are looking into the past – how things went in the wrong direction and what kind of practices were negative practices,» Papandreou told CNN. The role of global investment banks in a debt crisis that has undermined the euro has been criticized by several European politicians, most prominently German Chancellor Angela Merkel who has urged European governments to crack down on speculators seeking to profit by gambling on the risk of countries defaulting on their debt. In a related development over the weekend, Germany’s economics and technology minister lashed out at the head of Deutsche Bank for questioning Greece’s ability to repay emergency EU loans. «I find the declarations strange, surprising and annoying,» Rainer Bruderle said in comments published on the website of the financial weekly WirtschaftsWoche. «At a time when the debate is being carried out so publicly, such a strong statement on the television is not helpful,» he added.

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