The European Union’s court on Tuesday (12 March) denied access to a European Central Bank (ECB) document which underpinned its decision to freeze vital funding to Greek banks in 2015, a turning point in the country’s financial crisis.
Former Greek finance minister Yanis Varoufakis and German parliamentarian Fabio De Masi, who will appeal Tuesday’s ruling, had asked to see a legal opinion informing the ECB decision.
They argued this was illegitimate and aimed at forcing Athens to cave in during bailout negotiations with its lenders.
But the EU’s General Court ruled the ECB was right to withhold the document in order to protect its “space to think”.
“Contrary to the applicants’ claim, the ECB could legitimately take into account the hypothetical effects that the disclosure of the contested document could have on its space to think in 2015 and also after 2015,” the three judges said.
The ECB decision to freeze the amount of emergency cash it was providing to Greek banks forced Alexis Tsipras’ government to temporarily close them and impose capital controls, sinking the Greek economy and weakening his negotiating position during heated talks with international lenders.
Eventually, hard-liner Varoufakis resigned and Tsipras struck a deal with the EU that gave Greece cash in return for austerity measures and reforms.
De Masi said he and Varoufakis would challenge the verdict, which could now go to the European Court of Justice, the highest court in the EU.
“The ruling…stinks,” De Masi said in a statement, adding “transparency should not prevent the ECB from thinking.”
A spokesman for the ECB declined to comment.
The document requested by Varoufakis and De Masi relates to the power of ECB’s Governing Council to intervene in decisions made by the euro zone’s 19 national central banks, such as the supply of Emergency Liquidity Assistance (ELA).
After their request was rejected by the ECB, the pair turned to the EU’s General Court.
The ECB said at the time the case was filed that the legal opinion preceded the decision to withhold Greek funding by at least two months, adding it was not disclosed due its “validity for future deliberations on ELA” and other matters.
The ECB’s Agreement on ELA, published in 2017, prohibits national central banks from providing emergency cash if it threatens price stability or payments in the euro zone’s monetary system.