Bonum Certa Men Certa

Saint-Germain's Poisonous Legacy of "Toxic Loans": The Emperor’s New Investment Guidelines

"Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done."

--John Maynard Keynes, "The General Theory of Employment, Interest and Money," Chapter 12: The State of Long-Term Expectation



Emperor's new clothes



Summary: Details about a secret vote to 'gamble' the EPO's budget on "a diversified portfolio managed by external experts"

In a document dated 24 November 2017 (CA/F 18/17 Rev. 1) the current and soon-to-depart Emperor or “Sun-King” of the European Patent Office, Mr Battistelli, presented the Administrative Council with a proposal for "New Investment Guidelines of the European Patent Office". (warning: epo.org link; see local copy [PDF])



"The official record shows that of the 32 delegates present, only 6 voted against, 2 abstained and the remaining 24 voted in favour."According to information from EPO insiders the proposal was rubber-stamped with almost indecent haste by the Budget and Finance Committee of the EPO’s Administrative Council in December 2017. See SUEPO Den Haag publication. [PDF]

The official record shows that of the 32 delegates present, only 6 voted against, 2 abstained and the remaining 24 voted in favour.

An interesting detail here is that the matter was decided by means of a secret vote which was apparently requested by the Italian delegation.

More recently, EPO insiders report (see above) that at the last meeting of the BFC, which took place in Munich on 16 and 17 May, Mr Battistelli’s proposal to invest the EPO’s whopping cash surplus of around € 2.3 billion in the newly established "treasury investment fund" was also approved by a large majority of the delegations with only one vote against by the German delegation.

Soon after the adoption of the New Investment Guidelines in December 2017, a contributor to the Kluwer Patent Blog voiced his concern about certain aspects of the guidelines and he expressed the view that the permitted range of exotic "financial instruments" "appears to be unnecessarily extensive".

"An interesting detail here is that the matter was decided by means of a secret vote which was apparently requested by the Italian delegation."These concerns were echoed in March 2018 by another regular contributor to the Kluwer Patent Blog, Dr. Thorsten Bausch, who noted that the EPO "literally sits on a heap of money; so much money that the President has written (warning: epo.org link; see local copy [PDF]) to the AC’s Budget and Finance Committee, asking them to liberalize the Investment Guidelines, so that the EPO can start investing in more exciting financial instruments such as currencies, derivative instruments, asset-backed securities (ABS), mortgage-backed securities (MBS), Credit Default Swaps (CDS) or in summary: ‘a diversified portfolio managed by external experts’.

Bausch recommended his readers "to study this document in full" and noted that it had already been critically discussed in the earlier January posting on the Kluwer Patent Blog. He shared the concerns expressed by the previous contributor and opined that "the experiences of Harvard University and others in 2008/2009 should be a lesson to all of us."

"Mr Battistelli’s proposal to invest the EPO’s whopping cash surplus of around € 2.3 billion in the newly established "treasury investment fund" was also approved by a large majority of the delegations with only one vote against by the German delegation."If Dr. Bausch was looking for cautionary tales in such matters he need not have ventured so far afield across the Atlantic to Harvard.

A quick glance over the Franco-German border into the political "backyard" of the Deputy Mayor for culture in St. Germain-en-Laye would have been sufficient to alert readers to the risks of dabbling in the kinds of exotic and exciting "financial instruments" foreseen in the Emperor’s New Investment Guidelines.

We think that it could be instructive to have a closer look at the SIDRU “toxic loan” débâcle in St. Germain-en-Laye.

"We think that it could be instructive to have a closer look at the SIDRU “toxic loan” débâcle in St. Germain-en-Laye."Our aim is to encourage a more critical approach on the part of all stakeholders including the general public to current attempts to (mis)use EPO funds for speculative gambling in the global casino of the international financial markets.

We hope that a careful and diligent study of the cautionary tale which follows will yield a “prudential” dividend for all those who make the effort to digest the details.

Recent Techrights' Posts

Brittany Day Can Rest and Let Microsoft/Chatbots Write Fake 'Articles' About "Linux" This Christmas
Who said people don't work on Christmas? Chatbots or plagiarism-as-a-service work 24/7, every day of the year except during Microsoft downtimes
 
Microsoft Openwashing Stunts Initiative (OSI) is A Vulture in "Open" Clothing
it's quite telling that the OSI isn't protecting the Open Source Definition
IBM Has Almost Obliterated or Killed the Entire Fedora Community (Not IBM Staff)
Remaining Fedora insiders are well aware of this, but bringing this up (an "accusation" against IBM) might be a CoC violation
Links 25/12/2024: Fentanylware (TikTok) Scams and "Zelle Scams Lead to $870M Loss"
Links for the day
Links 25/12/2024: Windows TCO Brought to SSH, Terence Eden 'Retires'
Links for the day
Gemini Links 25/12/2024: Reality Bites and Gopher Thanks
Links for the day
Links 25/12/2024: Latest Report Front Microsoft Splinter Group, War Updates
Links for the day
Links 25/12/2024: Hong Kong Attacks Activists During Holidays, Xerox to Buy Lexmark
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, December 24, 2024
IRC logs for Tuesday, December 24, 2024
Gemini Links 25/12/2024: Open Source Social and No Search
Links for the day
Brittany Day Connects Windows Ransomware to "Linux" Using Microsoft LLMs (FUD Galore, Zero Effort, No Accountability)
FUD and misinformation made by Microsoft LLMs again?
Links 24/12/2024: Labour Strikes and TikTok Scrambling to Prop Up Radical Politicians That Would Protect TikTok
Links for the day
Where the Population is Controlled by Skinnerboxes Inside People's Pockets (or Purses)
A very small fraction of mobile users practise or exercise freedom/control over the skinnerbox
[Meme] Coin-Operated Publishers (Gaming the Message, Buying the Narrative)
Advertise (sponsor) to 'play'
Advertisers and Their Covert Impact on Publications' Output (or Writers' Topics of Choice, as Assigned or Approved by Editors)
It cannot be trivially denied that sponsorship in the form of "advertising" impacts where publishers go (or don't go, won't go)
Terrible Year for Microsoft Windows in Cyprus
down from 86% to 72% since January
[Meme] How to Kill Unions (Staff on Shoestring Budget Cannot Afford Lawyers)
What next for the EPO? "Gig economy"?
The EPO's Staff Union (SUEPO) Takes Legal Action to Rectify the Decrease in Wages (Lessening of Purchasing Power)
here is what the union published
Gemini Links 24/12/2024: Deedum Gemini Client Gets Colour Support, Advent of Code 2024
Links for the day
Microsoft Windows Slides to New Lows in Colombia
Now Windows is at an all-time low
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Monday, December 23, 2024
IRC logs for Monday, December 23, 2024
A Strong and Positive Closing for the Year's Last Week
In a lot of ways this year was a good one for Free software
Feels Too Warm for Christmas
Christmas is here, no snow in sight
Links 23/12/2024: 'Negative Time' and US Arms Taiwan Again
Links for the day
Links 23/12/2024: The Book of Uncommon Beings, Squirrels, and Slop Ruining Workplaces
Links for the day
Links 23/12/2024: North Korean Death Toll in Russia at ~1,100, Oligarch Who Illegally Migrated/Stayed (Musk) Shuts Down US Government
Links for the day
The World's 'Richest Country' Chooses GNU/Linux
This has gone on for quite some time
Richard Stallman on Love
Richard Stallman's personal website includes a section that lists three essays on the subject of love
Apple's LLM Slop Told Us Luigi Mangione Had Shot Himself, BetaNews Used LLMs to Talk About a Dead Linus Torvalds
They can blame it on some bot
Microsoft, Give Me LLM Slop About "Linux" and "Santa", I Need Some Fake Article...
BetaNews is basically an LLM slop site
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, December 22, 2024
IRC logs for Sunday, December 22, 2024