Μας πήραν πρέφα Κωνσταντίνε!! Greece had 13 off-market deals with Goldman to hide debts

Απο το Ιρλανδέζικο φύλλο του Independent (13 Μαίου 2011)

By Elisa Martinuzzi

Greece had 13 off-market derivative contracts with Goldman Sachs, most of which swapped Japanese yen into euro in a 2001 transaction aimed at concealing the true size of the nation's debt, according to the European Union's statistics office.
The amount borrowed through the swaps was due to be repaid with an interest-rate swap that would have spread payments through 2019, Eurostat said in a report yesterday. In 2005, the maturity was extended to 2037, the report said. Restructuring the swaps spread the cost over a longer period, leading to an increase in liabilities and debt, Eurostat said.
Repeated revisions of Greece's figures, beginning in 2009, spurred a surge in borrowing costs that pushed the country to the brink of default and triggered a region-wide debt crisis.
The use of off-market swaps, which Greece hadn't previously disclosed as debt, let the country increase borrowings by €5.3bn, Eurostat said in November.
Eurostat said most issues surrounding the swaps were resolved in September, when Greece agreed to correct its debt figures. (Bloomberg)
- Elisa Martinuzzi
Irish Independent


Για το ίδιο θέμα, από ιστοσελίδα με οικονομικό περιεχόμενο...
http://www.zerohedge.com/article/ecb-pushes-mad-button-asks-court-bar-greek-swap-disclosure-threatens-market-disruptions

ECB Pushes The M.A.D. Button, Asks Court To Bar Greek Swap Disclosure, Threatens With Market Disruptions

Submitted by Tyler Durden on 05/13/2011 15:34 -0400

Yesterday Eurostat disclosed that in order to hide its debt over the past decade, Greece had entered into not one, not two, but a total of 13 different currency swap contracts with Goldman Sachs, all based on the exchange of assorted currencies against the euro as well as one involving a dollar-CHF swap. This was a topic that was all the rage back in early 2010 when it was unclear just how deep the Greek insolvency runs, and was pushed into the open after Zero Hedge first exposed Titlos PLC, an SPV securitization deal by the National Bank of Greece which not took a shady "off the books" currency swap and then securitized it. Since then this story has died down as it has become all too clear just how insolvent not only Greece but all other European countries are, and it no longer matter to haggle over pennies when entire countries subsist day to day purely due to the generosity of the ECB. Yet while Eurostat disclosed the number of the swaps it did not provide detail into just what was contained within these swaps. Which is why back in December, Bloomberg, which recently won a lawsuit against the Fed and achieved release of top secret bank bailout documents, sued the ECB,asking "the European Union’s General Court in Luxembourg to overturn a decision by the ECB not to disclose two internal documents drafted for the central bank’s six-member executive board in Frankfurt this year. The notes show how Greece used swaps to hide its borrowings, according to a March 3 cover page attached to the papers obtained by Bloomberg News." Yet even now that it is all too clear just what the true fiscal situation of Greece and the periphery is, the ECB is still scrambling to hide its secretive and potentially fraudulent practices. Per Bloomberg: "The European Central Bank asked the European Union’s General Court to dismiss a lawsuit seeking the disclosure of documents showing how Greece used derivatives to hide loans and triggered the region’s sovereign debt crisis." The reason provided: "The ECB has complete discretion to decide what it should publish in the public interest, according to its defense to a lawsuit filed by Bloomberg News. Releasing the papers could damage the commercial interests of the ECB’s counterparties, hurt the region’s banks and markets, and undermine the economic policy of Greece and the EU, the central bank said." The reason given is the usual one: "Releasing the papers could damage the commercial interests of the ECB’s counterparties, hurt the region’s banks and markets, and undermine the economic policy of Greece and the EU, the central bank said." And so the mutual assured destruction pantomime continues unabated, even though everyone knows by now that nothing of the threatened would ever actually happen.
More from Bloomberg:

The documents don’t “provide information that would assist in informing the public debate in any meaningful manner,” the ECB said in its lawsuit. The files “contain ECB’s staff assumptions and hypotheses which were intended to feed the internal deliberations,” the ECB said in papers served today. The notes “were as such made on the basis of partial elements available at the time and not fully accurate information.”

ECB President Jean-Claude Trichet is withholding the documents as EU finance chiefs prepare to meet next week to discuss additional support for Greece, which received a 110 billion-euro bailout ($155 billion) last year. More than four in five institutional investors say Greece will probably default on its debt, according to a Bloomberg Global Poll published today.

And the kicker:

The documents should also be protected to safeguard the effectiveness of the ECB decision-making process, the central bank said. The ECB also challenged the Bloomberg suit on technical grounds. The suit, which is based on the EU’s freedom of information rules, was filed in Luxembourg in December. It requested access to two internal papers drafted for the central bank’s six-member executive board in Frankfurt last year.

So let's get this straight: the ECB's decision-making process relies on shady transactions that involve the use of currency swaps? Interesting. So while we know that the Fed uses curve options to sell volatility and keep rates low, we wonder if the ECB is doing a comparable off-market intervention using the same mechanism that "nobody" knew was being used by Greece for nearly 10 years.
We urge Bloomberg to push for a full disclosure on this matter as we are certain that substantial amount of ECB fraud will be exposed.
h/t Eric