The European Central Bank (ECB) has been accused by 200 Italian investors of violating its “equal” creditor status in the Greek debt restructuring.
A group of Italian investors is claiming damages worth more than € 12mn from the ECB over its purported unfair role and preferential treatment in Greece’s debt deal which allegedly resulted in considerable losses for non-official debt holders.
The ECB was able to “swap” its holdings of Greek government debt with protected bonds with no repayment date. This helped the ECB to avoid losses from the deal to stave off a Greek bankruptcy in March 2012.
The private sector however had to accept a “haircut” on their holdings which wiped off more than €100bn from Greece’s debt. The claimants hold that the ECB benefited from preferential treatment which imposed heavier losses on non-official debt holders.
The General Court of the European Union will issue a judgment this Wednesday, with the case also entailing potential ramifications for two major Eurozone government bond-buying programs which were launched in the wake of the Greek crisis. Should the case be successful, the ECB might face similar claims for damages from investors across the European Union.
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