(CN) - Bloomberg News has no right to banking documents relating to the Greek debt crisis, the EU General Court ruled Thursday, saying such disclosure would "undermine the public interest."
Bloomberg reporter Gabi Thesing had asked the European Central Bank in August 2010 for two documents titled "The Impact on Government Deficit and Debt from Off-market Swaps - The Greek Case" and "The Titlos Transaction and Possible Existence of Similar Transactions Impacting on the Euro Area Government Debt or Deficit Levels."
Claiming that release of the reports would undermine the economic policy of the EU and Greece, the bank denied Thesing's request.
Thesing and Bloomberg sued almost immediately, claiming that EU law gives any citizen of the union and any natural or legal person residing in or having a registered office in one of the member states has a right of access to European Central Bank documents.
Two years later, during which Greece's fiscal crisis only deepened, the Luxembourg-based General Court of the European Union dismissed the action.
Expanded transparency rules passed in 2004 were also designed to protect "the independence of the ECB ... and the confidentiality of certain matters specific to the performance of the ECB's tasks," the ruling states, abbreviating the bank's name.
The ECB enjoys wide discretion in determining whether disclosure could undermine the public interest, while the court's hands are largely tied except to make sure the refusal complies with EU law, according to the judgment.
"It is true that the European Union judicature set out those principles in relation to the extent of the review concerning the exceptions to the right of access to the documents," the justices found.
"However, the reasoning on which those principles are based is also valid in a case where the ECB refuses to grant access to a document," they added.
Bloomberg had argued that public interest favors disclosure, and that the bank failed to take this into consideration.
The court found, however, "that the exceptions to the right of access to documents provided for [by EU law] are framed in mandatory terms."
"It follows that the ECB is obliged to refuse access to documents falling under any one of those exceptions once the relevant circumstances are shown to exist, and no weighing up of an 'overriding public interest' is provided for in that provision," the judgment states.
The court also rejected arguments that there was no risk of misleading the public and the markets in ordering disclosure of the documents.
One the documents in question contained bank staff assumptions and views regarding the impact of off-market swaps on government deficit and on government debt in Greece.
This document relied on partial data, presenting a "snapshot of the situation in March 2010," the bank said. By the time Bloomberg asked for it, it was allegedly outdated.
But there is no guarantee financial markets would have known the data in the report was outdated if Thesing and Bloomberg reported on it, the court said.
"Although it is true that those participants are professionals who can be expected to use information taken from documents in the context of their work, the fact remains that they consider assumptions and views originating from the ECB to be particularly important and reliable for assessing the financial market," the court wrote. "It cannot reasonably be precluded that, even if those assumptions and views were made on the basis of data available well before October 21, 2010, they would have been regarded as still valid on that date. Moreover, it can be assumed that, by relying on those assumptions and views that were based on a certain known factual situation, those professionals might have inferred, on the basis of additional data, assumptions and views allegedly held by the ECB regarding the government deficit and government debt at the time that the ECB definitively refused access to that document. In this respect, any clarification by the ECB on the disclosed version of that document, indicating that the information contained therein was no longer up to date, would not have been able to prevent disclosure of that document from misleading the public and financial market participants in particular on the situation regarding the government deficit and government debt as assessed by the ECB. In the light of the very vulnerable environment in which the financial markets found themselves at the time of adoption of the contested decision, the assessment that such an error would undermine the economic policy of the union and the Hellenic Republic cannot be rejected as manifestly incorrect. Indeed, such an error might have had negative consequences on access, in particular for that member state, to the financial markets and might therefore have affected the effective conduct of economic policy in the Hellenic Republic and the union."
For many of the same reasons, the court upheld the shield over the related second document, which involves an analysis of Titlos-issued asset-backed securities, underwritten by an interest rate swap between the National Bank of Greece and the Greek government.
The EU's statistical agency Eurostat had also already made reports about Greek's debt crisis public, according to the ruling.