GC on non-disclosure of ECB documents: Carte blanche to public market manipulation? (T-590/10)

Today's Judgment of the General Court of the EU in case T-590/10 Gabi Thesing and Bloomberg Finance LP v ECB has provided clarification on the reasons that the ECB (and, by analogy, other EU Institutions) can provide to reject a request of access to its documents. The GC has backed the ECB in its non-disclosure decision on the basis of the protection of public interest and has adopted a broad view of such an exception. 

In general terms, the position of the ECB and the GC seem appropriate to grant  sufficient administrative discretion to the EU Institutions in their assessment of the public interest at stake. However, the specifics of the GC Judgment are a bit troubling, if one takes the position of the GC to its logical extreme. In my view, the following bears emphasizing:
43 [...] the ECB must be recognised as enjoying a wide discretion for the purpose of determining whether the disclosure of documents relating to the fields covered by that exception could undermine the public interest. The European Union judicature’s review of the legality of such a decision must therefore be limited to verifying whether the procedural rules and the duty to state reasons have been complied with, whether the facts have been accurately stated, and whether there has been a manifest error of assessment or a misuse of powers (see, by analogy, Case C‑266/05 P Sison v Council [2007] ECR I‑1233, paragraph 34). [...]
45 [...] with respect to the applicants’ arguments that the ECB incorrectly failed to take account of the public interest considerations in favour of disclosure and that there is a compelling public interest for disclosure of the documents at issue which would in fact further the public interest, the Court notes that the exceptions to the right of access to documents provided for in Article 4(1)(a) of Decision 2004/258 are framed in mandatory terms. It follows that the ECB is obliged to refuse access to documents falling under any one of those exceptions once the relevant circumstances are shown to exist, and no weighing up of an ‘overriding public interest’ is provided for in that provision, in contrast with the exceptions referred to in Article 4(2) and (3) of that decision (see, by analogy, Joined Cases T‑3/00 and T‑337/04 Pitsiorlas v Council and ECB [2007] ECR II‑4779, paragraph 227 and the case-law cited). [...]
51 As regards the issue whether disclosure of the first document would specifically and effectively undermine the protected interest in question, it is common ground [...] that, at the time of the adoption of the contested decision, the European financial markets were in a very vulnerable environment. The stability of those markets was fragile, in particular, because of the economic and financial situation of the Hellenic Republic. It is also common ground that that situation and the related sales of Greek financial assets were causing strong depreciations in the value of those assets, which also triggered losses for Greek and other European holders. The applicants did not dispute that that development had the potential of leading to negative spillover effects on the solvency and funding conditions of other issuers and countries in the euro area. In such an environment, it is clear that market participants use the information disclosed by central banks and that their analyses and decisions are considered a particularly important and reliable source to assess current and prospective financial market developments. Moreover, the ECB was entitled to find that public confidence is an essential element affecting the proper functioning of the financial markets. The ECB was not indeed contradicted in this respect by the applicants. [...]
56 [...] the fact that, on 21 October 2010, the data contained in the first document were outdated and that they gave only a snapshot of the factual situation at the time that the document was drafted does not permit the conclusion that, in the event of disclosure of that document, financial market participants would also have regarded as outdated and therefore of no value ECB staff assumptions and views regarding the impact of off-market swaps on government deficit and on government debt which are contained in that document.
57 Although it is true that those participants are professionals who can be expected to use information taken from documents in the context of their work, the fact remains that they consider assumptions and views originating from the ECB to be particularly important and reliable for assessing the financial market. It cannot reasonably be precluded that, even if those assumptions and views were made on the basis of data available well before 21 October 2010, they would have been regarded as still valid on that date. Moreover, it can be assumed that, by relying on those assumptions and views that were based on a certain known factual situation, those professionals might have inferred, on the basis of additional data, assumptions and views allegedly held by the ECB regarding the government deficit and government debt at the time that the ECB definitively refused access to that document. In this respect, any clarification by the ECB on the disclosed version of that document, indicating that the information contained therein was no longer up to date, would not have been able to prevent disclosure of that document from misleading the public and financial market participants in particular on the situation regarding the government deficit and government debt as assessed by the ECB.
58 In the light of the very vulnerable environment in which the financial markets found themselves at the time of adoption of the contested decision, the assessment that such an error would undermine the economic policy of the Union and the Hellenic Republic cannot be rejected as manifestly incorrect. Indeed, such an error might have had negative consequences on access, in particular for that Member State, to the financial markets and might therefore have affected the effective conduct of economic policy in the Hellenic Republic and the Union. (T-590/10, paras 43 to 58, emphasis added).
In my view, to put it clearly, the reasoning of the GC diminishes the analytical capacity of the financial sector and disregards the ability of professional financial advisors and analysts to separate the chaff from the grain and boldly assumes that panic and shortsightedness would have dominated the analysis of the documents which disclosure was requested (a rather strong assumption, at any rate). Moreover, in its analysis of the cumulative impact that disclosure may have had, the GC basically opposes all basic tenets that financial markets can only work effectively on the basis of full disclosure of any potentially relevant information [an assumption that, on the other hand, is strongly defended under EU rules on market abuse]. 

All in all, in an (acknowledged) extreme reading of the GC's Thesing Judgment, the ECB (and other EU Institutions) may have been given carte blanche to manipulate financial markets (by withholding information) if they deem such manipulation in the public interest. That can surely not be acceptable under EU Law. Therefore, a correction of the Thesing broad reasoning seems desirable, in order to keep any degree of effectiveness in the provisions of article 15 TFEU -- and so that everything is not effectively lost in the field of EU governance.