“Drop everything!” cried Günther the other day, bursting through my door. His voice was trembling with excitement. “We have the solution; you won’t believe it. It is so elegantly simple. And … totally legal,” he purred.
I sat him down, poured him a drink, and prepared to listen.
“Zo…” he began. “Let’s say that Germany, for example, has agreed to lend to Greece, the sum of 8 billion euro. It’s nothing in the world of global debt crises. It doesn’t need to be the Germans. It could be the Chinese-“
“The Chinese? With the aviation pickle?” I said.
“Ok, not the Chinese. The Germans. Happy?”
I nodded.
“So then we hold an auction of EUAs. And we auction a billion units. Now, the Germans bid top prices. Let’s say they bid 8 euros and take the lot.”
“Ok,” I said, dipping a sugar cube into my coffee. “You mean, it’s been pre-arranged?”
“Now, the EU then has 8 billion euro in its pocket. It then lends this on to Greece.”
“Aha!” I said.
“Now what do we have?” asked Günther. He didn’t wait for me to answer. “Well, you see, Greece has its money. Gut. The EU has a loan note from Greece. Gut. And German is holding one billion over valued EU allowances.”
“Gut,” I agreed.
“Now, here’s the trick,” he smiled to himself. He tapped his little cheroot case. “Germany swaps the EUAs for the loan note. So now Germany holds the loan note from Greece and the EU holds the EUAs.”
“And th- th- then what?” I stuttered.
“Then we can do what we want with the EUAs. They have already been auctioned, so we’ve done what we were supposed to do. The EUAs are ‘out in the market’, so to speak. Only, we are holding them. We don’t need to do anything. You see, it’s magic. And then we just sit on them.”
I gasped. I spilt my coffee. I blinked. Open mouthed, in awe at Günther’s cunning.
“But don’t you have to give the proceeds over to the member states? And doesn’t it have to be reinvested in renewable techhnology?”
“Mere technicalities, my friend. Welcome to realpolitik,” said Günther, refilling his glass.
“Who’d have thought that the Greeks would help us solve the set-aside crisis?” he chuckled.
Just then Archimedes arrived with a bag of fresh donuts.
“Timeo Daneos…” smirked Günther, flaunting his classical education and his yellow corduroy waistcoat.
