The Association of Physical Persons – Holders of Greek Government Bonds to the United Nations

[Dr. Cephas Lumina]


To: The United Nations
To the attention of the United Nations Independent expert on foreign debt and human rights, Dr. Cephas Lumina,

OHCHR, United Nations Office at Geneva, CH­1211 Geneva 10, Switzerland

From: Association of Physical Persons ­ Holders of Greek Government Bonds (SYFPOED)

Tel. +30 211 8001774 Fax +30 211 8001775 Cell +30 693 2662052 info@fpoed­

page1image5032 page1image5192

Dear Dr Lumina,

The Association of Physical Persons – Holders of Greek Government Bonds (SYFPOED) is the only non­profit association recognized by the Greek State to represent all private citizens (“Physical Persons”) who hold Greek Government Bonds (GGBs). According to Public Debt Management Agency (PDMA) figures, approximately fifteen thousand (15,000) families had deposited a total of 2.3bn EUR of their savings into Greek Government Bonds prior to the Private Sector Involvement (PSI+). Through the PSI+ that was adopted in March 2012 as a means to reduce the Greek debt, our families suffered a haircut of their GGB savings despite our refusal to be involved in the process. Contrary to banks, financial institutions and speculative or pension funds, we were never consulted or represented in the negotiation process that preceded the PSI+, and were never offered any offsets that would ease our burden. Our association includes more than 5,000 members.

Following the economic crisis of 2007, the (central) Bank of Greece (BoG) and the Public Debt Management Agency (PDMA), repeatedly SOLICITED Physical Persons (individual citizens) to buy Greek Government Bonds as an alternative to time deposits, through official announcements and advertising campaigns. Eventually, these people were included in the PSI+ as if they were professional investors, without the Greek State taking into consideration their explicit refusal to be included in the process, nor the fact that they were excluded from options such as Credit Default Swaps (CDS’s) that would offset their risk. To make matters worse, in the PSI+ process, Physical Persons were TREATED UNEQUALLY compared to other private bondholders like banks, pension funds, speculators and corporations, but, also, compared to the rest of the Greek taxpayers. Banks, pension funds, speculators and corporations were offered recapitalization methods and/or tax breaks, while the remaining Greek taxpayers suffered no loss whatsoever on their savings.

The face value of GGB’s belonging to Physical Persons was cut (practically “confiscated”) by 53.5% while the remaining value will be paid to us with maturities of up to 30 years, when most of us are certain to have passed away. The present market value of our loss is in excess of 75%. We (Physical Persons) stand to suffer additional loss if we sell before maturity the new bonds that were allotted to us as a result of the PSI+.

In effect, our human rights were seriously violated as a result of the PSI+ as follows:

a) our savings were practically annihilated;
b) our economic rights, including the principle “pacta sunt servanda,” were retrospectively and unilaterally infringed upon and breached.
c) we were offered no offset or indemnification; and
d) we are now required to pay increased income taxes so that corporations and banks can enjoy recapitalization and tax incentives
(note: all Greek citizens are now required to pay higher taxes but only Physical Persons suffered right out loss of their savings).

Athens May 29th 2013

In other words, we (Physical Persons) are DISCRIMINATED against and receive UNEQUAL TREATMENT compared to both financial institutions and the rest of the Greek citizens, as we are asked to contribute disproportionately to the reduction of the Greek debt.

The violation of our economic rights in turn affects our social rights as the loss of our life­long savings deprives us from enjoying a minimum standard of living. With public welfare programs curtailed on account of austerity measures, we face further degradation of our living conditions (please see Attachment I for actual stories of families agonizing to meet primary needs).

Brief History

With the collapse of Lehman Brothers many Greek citizens became concerned about the instability of the private sector (i.e. banks, other financial institutions, companies and corporations). At that time, the Greek Government (i.e. the government of a sovereign State enjoying the unique guarantees of legal stability and financial controls of the European system) issued special bonds with tax­exempt coupons if held until maturity. These bonds were advertized as a product “suitable for physical persons,” the term in Greek connoting “persons NOT particularly savvy in investment practices” (please. see Attachment II). These notices appeared in the Bank of Greece’s website in Greek only. Attachment is a translation.

Since 2009, the Greek Government issued bonds for “physical persons ­ savers” on the following dates, none of which reached maturity on account of the PSI+:

  • ●  April 4, 2009, maturing on March 20, 2012
  • ●  June 2, 2009, maturing on July 19, 2019
  • ●  January 29, 2010, maturing on August 20, 2015
  • ●  March 8, 2010, maturing on June 19, 2020
  • ●  March 30, 2010, maturing on April 20, 2017

    2009 and 2010 were the two years during which most Physical Persons deposited their savings in these loan bonds. The Greek banks and other financial institutions “pushed the product” as “a secure and guaranteed­upon­maturity savings method for the capital.” It is worth noting that the rules regarding the Markets in Financial Instruments Directive (MiFID), already adopted as national law by the Greek State in 2007, were not always applied. Several articles have appeared in the Greek press criticizing the absence of penalties against Greek financial institutions for such unlawful conduct. At the same time, the buoyancy of the Greek economy was advertized in the media while the statistics for the country’s deficit were eventually proven intentionally understated. By so misinforming the public, Physical Persons were tricked into buying supposedly “secure” Government Bonds, i.e. bonds of a sovereign State that could in no way go bankrupt within the legal and economic framework of the European Union.

    When the haircut occurred in March 2012, the bonds held by the Central Banks of the EU countries, the European Union itself and the European Investment Bank (EIB) were exchanged and excluded from the PSI+ (please see attachment IV). Banks, financial institutions, and pension funds were not only represented in negotiations with the Greek State but, also, provisions were made for their burden from the PSI+ to eventually ease. Such provisions include the recapitalization of systemic banking institutions, the tax treatment of losses for the following 30 years, and the direct subsidization of pension funds from the Government Βudget. In
    contrast, despite repeated public assurances by the Greek political leadership that PHYSICAL PERSONS – BOND HOLDERS would be protected should a debt haircut take place, this
    special category of GGB holders, without their consent or participation in any negotiations, was placed in the same category as banks, financial institutions, pension funds and speculators and was actually included in the haircut, but NO OFFSETS WHATSOEVER were offered to them (please see Attachment III).



We expected the Greek state, if not the EU, to protect us. As this proved to be a vain hope, following Greek legal procedure, we filed a relevant petition to the Council of State (one of three Supreme Courts in Greece). We hope, and for the moment still believe, that the Greek judicial system will prove fully independent according to its designated role, and that justice, human rights, and trust in institutions will be restored. But, even if the Supreme Court rules in our favor, the Greek Government may not be in a position to honor its obligation toward us.

Legally, the haircut was based on the RETROACTIVE introduction of Collective Action Clauses (CAC’s) in all contracts signed by the Greek State (and therefore in bonds issued under Greek law).


The CAC’s were introduced per bond issue but also included a supra majority clause under which if at least 51% of the overall bondholders convened and 75% of them agreed to vote in favor of the PSI+, then the remaining bondholders would have to accept the eventuality of their bonds being restructured according to the need of the Greek State to reach a certain threshold of debt relief. This provision was not included, nor in any other way implied, in the initial contracts with the Greek State. Please also note that Collective Action Clauses were never before part of the Greek law.

The agreement that was reached between the Institute of International Finance (IIF) – representing all institutional private bondholders – and the Greek State, ensured a high percentage of voluntary involvement of IIF members in the PSI+. Indeed, according to official data, participation in the PSI+ reached 96%. This high percentage offered the possibility for Physical Persons (individual bondholders) to be excluded and exempted from the haircut, had the Greek State so decided.

IN OTHER WORDS, THE HAIRCUT WAS NOT VOLUNTARY FOR US. It happened without our consent and without our representation in the negotiation process that preceded the PSI+, while it did not provide for any kind of indemnification or relief.

It should be stressed that despite the fact that CDS’s were triggered after the Greek PSI+, the Greek state is still paying at face value English law bond holdouts that were bought by vulture funds at a fraction of their face value. Please see attachment IV for details.

The profile of the individual bondholder

Most individuals saving money for “a rainy day” were not “risky investors.” They were often vulnerable and disadvantaged older people with WWII memories. Lacking an “investing culture,” sometimes of a lower educational level and limited access to information, they relied on the bank personnel for advice. They were “sitting ducks” for the trained bank employees. By not always respecting MiFID procedures, the bank officials avoided asking them certain questions that could raise doubts regarding the purchase of Government Bonds.

Other members of our group are better educated and informed individuals saving for a time of need or to supplement their pension upon retirement. These individuals relied on the official EU and ECB validated reports and statements of the Bank of Greece, the Public Debt Management Agency and the Hellenic Statistical Authority about the status and prospects of the Greek economy, as well as the fact that the EU had never given any signs of disapproval of Greece’s fiscal management. By buying Greek Government Bonds, these individuals were actually expressing their trust to the European economic system, the European Institutions and the relevant processes.

The average age of the members of the association is 63 years. These older persons are now left with bonds that mature from 2023 until 2042 (life expectancy in Greece is 79.5 years). Given their older age and the economic crisis, there is little they can do to increase their income (annual unemployment rate in Greece is 27.2%). In many cases, their mental and physical health is affected while at the same time the government is making disproportionate cuts in the health sector. Their trust in the system having been justifiably undermined, it seriously affects their will to plan ahead, to save and, sometimes, to even continue living on (please see Attachment V). Needless to say that, as with any other social group, many of these families face personal dramas and difficulties, as well as unemployment of multiple family members.

Foreign Debt, the Greek Political System, Greek Justice and the European Union

It has now become very clear to everyone in Greece and abroad that the main culprit for Greece’s economic collapse is the Greek political system. In order to maintain their position and power, Greek politicians, instead of wisely managing the national wealth and guiding the Greek people to financial security through careful steps, they kept carelessly increasing the national debt and misinforming their constituencies about the potential and health of the Greek economy.

A side effect of this malpractice has been the successive layers of vested interests created in all walks of public life, the justice system included. As a reaction to this pattern of practice we knowingly decided to place our hopes with the Council of State, one of Greece’s three supreme courts, expecting vindication through official legal channels and thus supporting “the righteous Greece.”

On the other hand, the European Union has not yet developed the institutions that would help ease its less developed members into the necessary discipline, neither has it taken steps toward the necessary, in our opinion, overall federalization of its system. In many ways, this has resulted in the European North taking advantage of the European South, with foremost example the German State that had actually been turning a blind eye to German companies (Siemens comes easily to mind) when they offered under the carpet money to various officials in order to get large­scale commissions.

We strongly believe that the combination of high fiscal debt, political corruption and violation of economic rights is responsible for the injustice done to us. The United Nations has always stood up for the righteous of the world. We can think of no other recourse than to seek the help and support of your office.

Thanking you for your time and consideration, we kindly ask you to consider taking action on the matter in the form of a communication.


Ioannis Marinopoulos, Chairman, SYFPOED

Attachment I

Below please find the names of SYFPOED members who were particularly affected by the process of the PSI+, with a brief description of their unusual circumstances. For additional details and/or facts, please contact SYFPOED.

Katerina Peretzi, from Athens, following the PSI+, is unable to provide full necessary care for the 90% disabled (almost quadriplegic) son Constantine Sparis, 45. Her daughter Lena Sparis, 40, is currently unemployed on account of the crisis.

Similarly, Mr. Tzanetas from Patras had placed all his savings in Greek Government Bonds to secure the future of his paraplegic daughter.

Filippos Mamatas, from Serres, is unable to provide the necessary care for his 83 year­old disabled mother.

Constantine Goglias, 74, from Naoussa, has had three open­heart bypass surgeries. He is unfit for work and can no longer support himself because of the “voluntary” PSI+.

Andreas Lolos, a farmer, faces serious psychological problems as a result of the dire financial situation he has come to due to the PSI+.

Giorgos Sotiriou, 75, from Thessaloniki, retired, is 50% disabled, has chronic obstructive pulmonary disease and is left penniless because all of his savings had been placed in Greek Government Bonds.

Michelle Varthalitou (Greek­French residing in Syros) has cancer and is under chemotherapy. She cannot meet the high cost of her treatment. She will have to remain untreated.

Stergios Tsakmaklis, 58, from Orestias, is totally blind. He had bought his home with a bank loan that he can no longer serve because he lost the income from the Greek Government Bonds that he had bought. The bank has already notified him that he will lose his house.

Attachment II

Translation of the Bank of Greece’s August 3, 2010 invitation to “Physical Persons” to buy Greek Government Bonds:

08/03/2010 – Offer of 10­year Bonds to Savings Depositors

The Public Debt Management Agency announces that on March 4, 2010 the Greek State will issue a 10­year syndicated loan bond with an annual fixed interest rate of 6.25%, maturing on June 19, 2020. Date of issue is set for Thursday, March 11, 2010.
The Ministry of Finance offers the possibility to natural persons (individuals ­ private savings depositors) to acquire them (trans: the bonds) without tax on interest gained, under the following conditions:

­­ The titles will be held until their maturity*, and
­­ The titles will be acquired from the day of issue (included) until 5 working days thereof, i.e. from Thursday, March 11, 2010 to Thursday, March 18, 2010
There is no ceiling to the funds. Acquisition will be at the price level set by Banks and Financial Institutions.

*Because the holding of titles is monitored by the Dematerialized Securities System (DSS) of the Central Securities Depository (CSD), the entry of the purchase of said titles into DSS, is a necessary condition. The process for this entry is simple and will be performed by the aforementioned distributing financial institutions. Necessary documentation is the individual’s Identity Card and his/her private Tax Identification Number.

Greek text can be found at : &List_ID=1af869f3­57fb­4de6­b9ae­bdfd83c66c95&Filter_by=AN

Attachment III

February 2012 statement (in translation) by then Minister of Finance and President of the Pan­Hellenic Socialist Party (PaSoK) Evangelos Venizelos: “…all necessary care will be taken so that all the categories of citizens that should be protected (transl. note: from the PSI+) will be protected. This protection concerns those who can be characterized as ‘small­time investors,’ who, however, are not investors but savers.”

Statement (in translation) by PaSoK President Evangelos Venizelos two months after
the PSI+ and prior to the June 17, 2012 elections: “It is true that the PSI treated the small­time holders of Greek Government Bonds unjustly. It is true that these people are savers and not investors and should not have been included. However, it was our partners (transl. note: the Troika) who imposed this on us being concerned about the possible international legal consequences of such differentiation.


The truth is that there is a legally safe solution. I do not wish to discuss it further because it would not be constructive…I know exactly what to do the day after the elections if I have the responsibility of handling this matter…”

April 22, 2012 statement (in translation) by (then) Main Opposition party Nea Democratia President Antonis Samaras (currently Prime Minster of Greece): “…Regarding the holders of Greek Government Bonds who lost their life­long savings in the haircut: It is imperative that they be compensated! We are not going to discuss this now. But it can be done…”

June 13, 2012 statement (in translation) by Nea Democratia spokesman Yannis Mihelakis (four days before the June 2012 elections): “Even before the beginning of the restructuring of the Greek debt, inside and outside of the Greek Parliament, Nea Democratia had initially maintained that it was necessary to exempt and later on to compensate Physical Persons for their loss. Such solution seems feasible…It is being processed by the Public Debt Management Agency and has the assent of the General Accounting Office…”

Public Statement (in translation) issued by SYRIZA­EKM (currently Main Opposition party) prior to the June 17, 2012 elections: “The Greek State needs to regain its reliability regarding its ability to borrow from the Greek citizens. (Transl. note: It is therefore necessary) that all the Physical Persons who bought Greek Government Bonds following the Public Debt Management Agency’s announcements until 2010 (Greece’s first agreement with the Troika) be compensated.”

Statement (in translation) issued by Dimitris Hatzisocratis, DEMAR party official responsible for economic and social policy prior to the June 17, 2012 elections (DEMAR is a small leftist party currently participating in the coalition government): “My personal commitment during your (transl. note: SYFPOED’s) demonstration in front of the Ministry of Finance is also DEMAR’s commitment; right after the elections…we will support your demand to be compensated for your savings…”

Attachment IV

Bonds held by central banks were excluded from the PSI and in particular

1) 56.3 bn EUR of bonds held by the ECB and other National Central Banks 2) 134.2 ml EUR of bonds held by the European Union.
3) 315.4 ml EUR of bonds held by the EIB

All these bonds were bought at a discount to their face value and will be paid in full _____________________________________________________________________ Holdout bonds paid in full to vulture funds by the Hellenic Republic after the PSI+

  • ●  Hellenic Republic FLOATING FGN
  • ●  Hellenic Railways FIXED EN BOND
  • ●  Hellenic Railways FIXED EN BOND

XS0147393861 EUR BOND FR0000489676 EUR

XS0208636091 EUR

435,872,000.00 15/05/12 183,970,000.00 13/09/12 250,000,000.00 21/12/12

XS0354223827 EUR BOND
365,373,000.00 02/04/13

  • ●  Athens Urban Transportation Organization 240,000,000.00 26/03/13 FIXED EN
  • ●  Hellenic Railways XS0165688648 EUR FIXED EN BOND

    Total amount paid: 1,475,215,000 EUR

Attachment V

The regional European Office of the World Health Organization’s report for 2010 states that financial destitution coupled with ongoing ambiguity about the future can trigger mental depression. Worth noting at this point are two findings following a research by Prof. Chara Spiliopoulou of the University of Athens as presented in the Athens scientific symposium on suicide prevention in November 2012:

­­ Between the years 2011 and 2012, suicides increased by 100%.

­­ Most important factor for this increase was the economic problems faced by those who committed suicide.

Because of their religious beliefs (96.5% of Greeks are Christian Orthodox), the families of suicide victims go to great length not to disclose the cause of death, or their loved ones will be denied proper burial or memorial services. It is safe to say that the officially recorded suicides in Greece are considerably fewer than the actual number.πιστολή-καταγγελία%20συ.φ.π.ο.ε.δ.%20προς%20οηε.pdf


Related posts:

Greece: UN rights expert to assess impact of austerity measures

ICC Appeals

To the Prosecutor of ICC: Save Greece! Save the cradle of western civilization 

CV of Mr. Cephas Lumina



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