An organization of overseas Greeks is lobbying Greece’s government to issue “special bonds” to members of Hellenic communities in Canada and other countries, the Star has learned. It’s a way to help ease the pressure of Greece’s heavy debt load, said John Dagonas, head of the Canadian Chapter of The World Council of Hellenes Abroad.
“The size of the bond will be substantial,” said Dagonas, who is spearheading the effort with the U.S. chapter of the council from Toronto. “We want to make a difference, and we’re trying to make the correct difference. We don’t want to go through the (Greek) government.”
Money from these so-called diaspora bonds will be tightly controlled, going directly to repay its bailout loans from the European Union, the European Central Bank and the I.M.F., he said. They won’t fund the Greek bureaucracy. “We don’t want to go through the government…because they’re in disarray right now, and we believe their actions have really created this issue that our country is facing right now.”
Founded by Greece in 1995, the council advises and consults the government on issues related to Greeks abroad. In early October, chapters of the council met in Athens to launch a project that they hope will allow expatriates to buy the diaspora bonds. The project is in its early stages, and Dagonas is trying to get the council’s six other chapters on board.
In March, Greece’s finance ministry filed an application with securities regulators in the U.S., and is awaiting approval of the diaspora bonds. The country also expressed an interest in reaching out to Canadian and Australian expats. But Greece hasn’t moved forward since then, said Thomas Saras, editor-in-chief of Patrides, a Toronto-based newspaper published in Greek and English.
“If they did not take action, it’s not our fault,” he said. “I’m not going to give money – even a penny – when I know that this penny is going to be drawn into the bureaucratic labyrinth.”
Even if the council can convince Greece to issue diaspora bonds in Canada, its efforts will likely be fruitless, said Fergus McCormick, head of sovereign ratings at Dominion Bond Rating Service, a Toronto-based credit rating agency.
“The issuance of additional debt – whether it’s diaspora or any additional debt – I think would not necessarily help Greece to attain debt sustainability,” he said. “The risk is that this increases further their debt burden.”
Greece’s debt is close to 160 per cent of its GDP, a high amount considering the country’s current political instability, and the fact that it’s embroiled in a deep recession, McCormick said, adding the diaspora bonds “would have to be a very, very substantial amount” to be helpful.
The council’s project is in its early stages, and has yet to decide on a goal amount, said Dagonas. Still, the bonds are a transparent way to raise money for Greece, he added.