The Slog has learned that EU stereotyping of the Greeks, and credit agency fears about the UK, are more important than most newspapers realise.
Senior European credit management sources told us yesterday that EU finance ministers and their staff are at pains to present the Greek financial sector as slipshod and naive, when this isn’t the case.
“In fact” one senior executive in a Swiss bank told The Slog, “Greek regulators are much more on the ball than those in Britain”. The source added that top European finance ministers “are keen to present Greece as a sort of one-donkey State with a laid-back mentality. The truth is that it’s they, the EU elite, who allowed all this crap to go unpunished. The people in Athens know they have a problem, which is more than you can say for their equivalents in Westminster and the City”.
Angela Merkel in particular castigated the Greeks for ‘falsifying their accounts for years’. But expert observers reject this, laying more of the blame on global investment banks.
Another executive asserted, “Goldman Sachs and all the other vultures did far more of the smoke and mirrors with investors than the Greek Government. But the Brits are simply in denial, and that’s much more dangerous”.
Our banking and credit agency sources across the Atlantic concur with this view of the UK, especially after today’s shocking expenditure-to-deficit figures. These have only served to convince senior management in both Fitch and S&P that a downgrading of UK credit status is now unavoidable.
“They just seem to be oblivious to the dangers” said one US informant close to the issue, “Without a wake-up call and soon, the situation will go critical”.
Meanwhile, whoever is ‘responsible’ for the Greek financial crisis, Greek government bonds declined sharply in Europe. And risk markets around the globe remain suspicious about EU pledges of support for Greece. “If they don’t give real financial aid to help cut the (Greek) budget deficit” said one credit manager, “Then the buck will just go right back to Brussels. They can’t hide on this”.
As we went to press, other opinion leaders were also declaring that EU confusion on bailout policy will simply reduce confidence in the Council’s ability to control mounting debt.