ECB Wins Ruling to Keep Greek Derivative Swaps File Nontransparent

“The European Central Bank will be allowed to keep private files showing how Greece used derivatives to hide its debt after defeating the first court challenge using the bloc’s freedom of information rules.

“Disclosure of those documents would have undermined the protection of the public interest so far as concerns the economic policy of the European Union and Greece,” the EU General Courtin Luxembourg said today, rejecting a request by Bloomberg News initially filed in August 2010.

Today’s ruling by three judges denies European taxpayers, on the hook for the cost of Greece’s 240 billion-euro ($311 billion) bailout, the opportunity to see whether EU officials knew of irregularities in Greece’s public accounts before they became public in 2009. The decision underscores the ECB’s lack of accountability as it expands its powers to become the euro area’s chief banking regulator, said Georg Erber, a research associate at the German Institute for Economic Research.

“The courts are bending the rules to legalize the policies of the European institutions and help stabilize the region,” said Erber, a specialist in financial-market regulation. “It reveals implicitly that the EU was well-informed about what was going on and didn’t take steps to avert the crisis.” ”

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