Belfast Telegraph

Greece accuses City trader of spreading rumours on debt plans

By Terri Judd

A London trader is expected to be questioned by police after being accused by the Greek authorities of sending an email designed to stir up rumours of a plan to restructure debt in the embattled country.

Paul Moss, of Citigroup, was said to have rattled nervous investors, leading to a drop of 4.6% in Greek bank shares last Wednesday, after allegedly sending a message saying the country could restructure its debt as soon as the weekend.

Greece has been excluded from financial markets since it suffered a debt crisis last year. Authorities insist the debt is sustainable but its scale and continuing slump in the country have led markets to anticipate a restructuring.

"We have located a computer terminal at a company in London from which a very damaging email was sent," said a police spokesman, Thanassis Kokkalakis. "It contained very confusing misinformation that is now the focus of an urgent investigation. This man will be questioned and the findings sent to a prosecutor."

Reports said that investigators from Britain's Serious Organised Crime Agency would be working with Greece's cyber crime division and speaking to the trader. Soca, however, refused to confirm any investigation. Meanwhile, the US bank said: "We are co-operating with the authorities".

The email was believed to have been sent at 14.42 UK time, 20 minutes after an already declining market started losing ground more rapidly on Wednesday.

But the allegations come at an extremely sensitive time with Greece struggling to meet the conditions set by €110bn euro (£97bn) EU-IMF bailout package and poised to launch a privatisation programme to raise £44bn. The country is seen as the most likely to default on its debts, potentially sparking panic throughout the euro zone.

Speculation Greece will fail to pay back its borrowings has pushed interest rates on debts due for repayment in 10 years to 15%, higher than those paid by fellow euro zone member Germany.

Greece's Finance Minister, George Papaconstantinou, insisted on Wednesday that it could deal with its debt mountain.

Yesterday the ministry in Athens described rumours of an Easter restructuring as "devoid of any substance and verging on the ridiculous" and said it had forwarded the email to the prosecutor's office.