QUEEN’S PARK - As shocking news emerges from the Greek debt crisis, NDP Finance Critic Peter Tabuns is calling on the McGuinty Liberals to sack New York investment bank Goldman Sachs.
McGuinty is using the bank to help sell Ontario assets, including lotteries, liquor stores and electricity. Even as Greek lottery revenue is at the centre of a growing scandal.
Scandals are nothing new to Goldman Sachs. But its involvement in Greece’s government debt crisis has raised eyebrows around the world.
“Banks like Goldman Sachs care only about the money they can make,” said Tabuns. “They don’t care about the people or societies hurt by high-risk, low-ethics choices. We saw it in the global financial crisis and we are seeing it again in Greece.
“If Dalton McGuinty won’t sack Goldman Sachs for what it did in Greece, he should sack them before they do damage to Ontario.”
In Greece, Goldman Sachs is believed to have used high-risk financial instruments—called derivatives—to help the government hide the size of its debt. What looked like a currency transaction is alleged to have hidden Greek debt in return for future lottery and airport revenue.
Worse, the New York Times reports the bank then bet on Greece to default on the very debt it helped hide.
“What does it take for Dalton McGuinty to figure out that Goldman Sachs doesn’t work in anyone’s interest but its own?” asked Tabuns. “Mr. McGuinty should tell Goldman Sachs it is not welcome in Ontario after the damage it helped create in Greece.”
Tabuns isn’t alone in raising questions about the scandal-ridden bank. In fact, the bank itself admitted to shady dealings in testimony before the U.S. Congress last year.
But while McGuinty has said nothing about Goldman Sachs’s role in the Greek debt crisis, the chairman of the United States Federal Reserve has not been silent.
“We are looking into a number of questions related to [Goldman Sachs] in their derivatives arrangements with Greece,” Ben Bernanke was recently quoted in the New York Times as saying. “Obviously, using [derivatives] in a way that potentially destabilizes a company or a country is counterproductive.”
Tabuns said the Liberals can’t say they weren’t warned.
“I dare Dalton McGuinty to speak to Toronto’s Greek community and ask them if they think the bank at the centre of Greece’s crisis should privatize Ontario’s most-prized assets,” he said.
