German minister proposes ‘independent fund’ he chairs to take control of €50bn Greek assets

The Press Project reveals that the Luxembourg ‘Institution for Growth’ is chaired by German finance minister Wolfgang Schäuble – the same minister who proposed that “valuable Greek assets” should be transferred to an external fund

Germany’s finance minister Wolfgang Schäuble
Germany’s finance minister Wolfgang Schäuble

Germany’s finance minister Wolfgang Schäuble is the chairman of the board of supervisory directors of the Institution for Growth, an institution that could take control of “valuable Greek assets”, worth €50 billion.

Among one of the conditions for a bailout is a proposal for “valuable Greek assets” – as yet unidentified – to be transferred “to an existing external and independent fund like the Institution for Growth in Luxembourg to be privatized over time and decrease debt. Such fund would be managed by the Greek authorities under the supervision of the relevant European institutions”.

The institution is a wholly owned subsidiary of German development bank Kreditanstalt für Wiederaufbau (KfW).

The “Greek development fund” was created in July 2013 following an agreement signed between Schäuble, then Greek finance minister Yannis Stournaras, Greek Development Minister Kostas Hatzidakis, and Ulrich Schröder, CEO of KfW.

The fund’s objective was “to provide small and medium-sized businesses with better access to affordable financing”.

Now, the German minister proposed that €50 billion worth of Greek assets are transferred to this fund as collateral for new loans and for eventual privatization. The move may however be interpreted as impinging on the sovereignty of Greece.

EU officials say that this is one of the conditions that Alexis Tsipras is opposing, with Greece having already argued that it does not have assets worth that amount.

On Twitter, US financial analyst George Peakes said “it doesn’t look ‘good’ for Schäuble to sit on the board of the institution, but it’s a multilateral one”.

“Furthermore, KfW isn’t a ‘bank’: it’s wholly owned by the German government. Again, it doesn’t look good. But not like a private bank holding assets,” he tweeted.

“So like, if you’re going to have an issue with this, it’s because you’re worried about German government’s proximity to Greek assets. It’s not some plot where a private bank will about and Schäuble has a significant conflict in that respect. It’s a public institution.”