EU Probes Hidden Greek Deals as 400% Yield Gap Shows Doubt
By Alan Katz and Elisa Martinuzzi-Bloomberg
....The fiscal crisis turned attention to currency swaps arranged by Goldman Sachs Group Inc. that helped Greece hide the extent of its debt.
“There are more, or even many, of this kind of swap operation, which we have to clarify,” said Radermacher, the former president of the German Federal Statistics Office who was appointed as the EU’s chief statistician in April 2008. “The Goldman Sachs case was the beginning.”
Greece has told the agency that the other contracts were each significantly smaller than the ones signed with Goldman Sachs, Radermacher said. Signed in 2000 and 2001, the Goldman swaps reduced the country’s foreign denominated debt in euro terms by 2.367 billion euros and lowered debt as a proportion of GDP to 103.7 percent from 105.3 percent, according to a Feb. 21 statement by Goldman.
Goldman Sachs spokewoman Fiona Laffan declined to comment for this article.
In April, Eurostat said it might have to revise Greece’s 2009 debt figure higher by as much as 7 percentage points of GDP, in part because of the use of swap contracts that allowed it to reduce current reported debt in return for greater liabilities in future years....
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