The Financial Times has confirmed that the Rothschild family will be placed in charge of the Greek economy with immediate effect.
According to reports, Lord Rothschild will become the new economic adviser to Greece, controlling the country’s debt and negotiations with creditors.
The Greek government are rushing to finalize the appointment before talks with Eurozone finance ministers resume on February 20.
The Rothschild company will take over the role of the US based banking firm Lazard.
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.
“An adviser is not being hired to arrange another debt restructuring with private creditors, it is being hired to advise on official debt. It will be a difficult job,” said Mitu Gulati, a law professor at Duke University in the US who specializes in the field. “There is always the risk that you can antagonize bilateral creditors when you bring financial advisers in and treat them like private creditors.”
Athens and its international creditors have been seeking ways to conclude negotiations on the current review of Greece’s €86 billion aid package. The bailout program was agreed two years ago and is the third since 2010.
Greece’s €323 billion debt is still the highest in the eurozone. According to the country’s Public Debt Management Agency, just €36 billion from that sum is owned by private investors who hold Greek bonds; the rest is in the hands of sector creditors such as the IMF and European institutions.
The country has €7 billion of debt payments due this July, which it won’t be able to meet unless it receives new funds or carries out restructuring.
Earlier this month, the IMF which was urging for more austerity and describes Athens’ debt as unsustainable, called for “significant debt relief” to stop Greece’s debts becoming “explosive.”