As concerns over Greece and its debt mount, Athens has reportedly decided to call in Rothschild, one of the oldest financial firms in the world, to navigate the country’s long-running creditor stand-off and avert default.
According to the Financial Times, Greek authorities hope to finalize the appointment before crunch debt talks with eurozone finance ministers on February 20. The date has been described as the last chance for a bailout review with the upcoming elections in Europe likely to dominate the EU agenda.
Sources told the Financial Times that Rothschild is expected to advise Athens on all areas connected to its debt, including negotiations with creditors, potential inclusion in the European Central Bank’s €80 billion per month bond-buying program and the resumption of Greek government bond sales.
They added the bank will be paid a bonus when Greece regains access to global debt markets.
The Rothschild investment bank was founded over 200 years ago by Mayer Amschel Rothschild. Five of his sons established banking businesses around Europe and the firm today has more than three thousand employees in 40 countries.
The appointment of Rothschild as sovereign debt adviser will require ministerial approval. The bank will thus replace US investment bank Lazard, which worked on Greece’s bailout talks in 2012, and is currently acting as financial adviser to the Greek Ministry of Energy.
The FT revelations may also shed light into the mystery surrounding a secret meeting of Prime Minister Alexis Tsipras with Rotchild representatives in Paris last month.
Last week, the political debate in Greece was heated after the vice president of main opposition party New Democracy revealed that Greek Prime Minister Alexis Tsipras had a secret meeting with the representatives of the Rotchild investment bank in Paris.
The meeting was revealed after the ND vice had claimed Tsipras had misused the prime minister aircraft and flew to Paris for family vacation while he was flying back to Greece from Portugal end of January.
Bowing to the insisting pressure of ND, the prime minister’s office said in a non paper that purpose of the meeting was to bring investment in Greece and that there was also a meeting with the CEO of cosmetics company L’ Oreal. The non paper also said that the Rotchild investment bank was adviser to the Public Debt Management Agency.
According to press reports, the Rotchild confirmed the meeting with the Greek Prime Minister but did not revealed details. In the same wavelength, L’ Oreal confirmed without further details that it was a private meeting.
After the Financial Times revealed that Greece government will hire Rotchild as debt adviser, Greek media report that the investment bank will help the Greek government to reach a deal with the EU and the IMF lenders on the next Eurogroup scheduled for 20. February.
Without the conclusion of the second review Greece will not be able to receive the next bailout tranche in order to meet its obligations towards the lenders and private investors.