Economy

Debt crisis: Eureca – the secret plan to save Greece

28 September 2011
Presseurop
La Tribune

La Tribune, 28 September 2011

Reducing the debt mountain of Greece without provoking default to get the country permanently out of recession and social unrest: this is the “secret German plan to save Greece”, La Tribune reveals. Baptised Project Eureca, it has been dreamt up by the influential Roland Berger consulting group in Germany, and “very likely not to have been designed outside the circle of Angela Merkel and the experts from the troika”. The idea is to create a common structure, “sort of equivalent to the Treuhandanstalt founded in 1990 by Germany to privatise some 8,500 East German companies.” Greece will put into this pot all of its public assets (banks, real estate, telephone, ports ...) – or 125 billion euros. Purchased by a European institution, this structure will pilot the privatisation of assets before 2025.

The money released would allow Athens to redeem its obligations to the ECB and to the European Financial Stability Fund (EFSF). Its debt/GDP ratio would be cut from 145 to 88 percent. Interest rates on Greek debt would fall by 50 percent and Athens would be able to return to the markets. Such a plan "would wipe out the gains of speculators (...) who bet on a collapse of Greek bond prices as well as those of the Spanish, Italian and Irish governments," the daily explains. But it would have to “count on the opposition of banks and financial markets, the former because they probably have their own ideas on the privatisation of Greek assets, and the latter because the current situation of uncertainty allows multiple games and rewards”. For now, Eureca is not on the table in the discussions among European leaders.