The European Bosses Are Ready To Crucify Goldman For Their Sins

[FarCenter]

Business Insider | Feb. 18, 2010, 9:41 AM | By PAN PYLAS, AP Business Writer

LONDON (AP) — The practice wasn't secret and it wasn't illegal, and some of it happened 10 or 15 years ago. But the practice of European governments reportedly using complex financial transactions to move debt off their books is getting closer attention from markets and the European Union.

The deals, known as swaps, let some governments shrink the apparent size of ther deficits, unsettling news at a time when markets are taking stock of Europe's struggle with increased levels of government debt.

Greece has until Friday to disclose to the European Commission how it used complex currency swap deals and whether they were used to conceal the real scale of its debt — specifically a 2002 deal that Greek officials said they did with U.S. investment bank Goldman Sachs.

Under the deal, known as a currency swap, Greek dollar and yen debt was reportedly exchanged for euro debt for a period at an advantageous rate to be reversed at a later date. The effect was to show less debt in the near-term.

The deals carry some of the hallmarks of the financial crisis — such as off-balance sheet liabilities and highly complex financial arrangements.

Christine Lagarde, France's finance minister, said the EU statistics agency Eurostat would examine how Goldman Sachs "helped Greece structure, postpone a certain number of debt repayments."

"You have to know first of all whether it was doctoring the accounts and if this was legal or not at the time it was done, and if it was legal, it will be necessary to find out whether it was favorable for stability. Probably not. And in that case, how we can avoid a repeat, if those measures already were taken,"

<SNIP>http://www.businessinsider.com/greece-facing-goldman-sachs-debt-deal-scrutiny-2010-2

[heli]

1. Crucify? What happened to the guillotine?

Crucifixion is so barbaric.

[w4rma]

2. What is the verb for using a guillotine? (nt)