He also wondered about the passivity of U

The controversy over the participation of Goldman Sachs to "camouflage" of Greek debt is not extinguished. In the aftermath of the request for clarification by the Commission in Brussels to Athens, Eurostat said yesterday not informed, "until recently", transactions operated by Athens with Goldman Sachs in 2002. The Bank American attempted to defuse the case recently unearthed by the German weekly "Der Spiegel" and the "New York Times", recalling that it had already been revealed by the specialised press ("Risk Magazine") and brought to the attention of Eurostat as early as July 2003.

How Goldman Sachs helped the Greece to hide its debt by a foreign exchange swap

The best description of the offending "deal" has been provided by Christophoros Sardelis, the former of the Greek public debt (from 1999 to 2004) Management Agency before joining Banca IMI, Intesa SanPaolo IMI Italian Group subsidiary. It was he who directly negotiated the operation with Antigone Loudiadis, the head of the Department of the "fixed income" and the currencies of Goldman Sachs in London. According to him, the transaction established by the Bank in 2002 took the form of a "currency swap" on $ 10 billion of Greek debt issued in dollars and yen. The show was subsequently converted to euros following a "historic exchange rates" "off market", a spot rate to increase the flow of interest paid to the Greece for the duration of the "swap", the operation leading to a reduction of debt and additional income of 1 billion for this year here. The operation reportedly led to artificially shift several years payment of the interests of the Greek debt.

In the aftermath, Goldman Sachs has chosen to cover its exposure by placing this risk to an investor in well known sovereign risk: the Deutsche Pfandbriefe Bank (Depfa), who agreed to turn a "credit default swap" (CDS) at the American Bank for an amount of $ 1 billion. According to the "risk" magazine, which had already discussed the operation in July 2003, the operation would have enabled Athens to reduce the level of the Greek public debt of 107 of GDP in 2001 to 104.9 of GDP in 2002, and to reduce interest payments from 7.4 to 6.4 in one year. Christophoros Sardelis, Eurostat and the rating agencies were perfectly aware of this operation, which has been restructured "once or twice". But Eurostat spokesman Johan Wullt said yesterday that a request for information was sent to the Greece in 2007.

The operation was consistent with the rules of the European Union

For Greek Finance Minister Georges Papaconstantinou operation was "lawful at the time", but would today, and the Greece also no longer has recourse to this type of instruments. According to several experts, the agreement between Goldman Sachs was perfectly consistent with the rules of Eurostat, other European countries such as the Italy having had recourse to similar operations since 1996. But for other observers, the mechanism is to disguise a loan long term in "currency swap". And to Michael Meister, spokesman for the financial affairs of the Christian Democrat Party of Angela Merkel, "Goldman Sachs has violated the spirit of the Maastricht Treaty, although it is not certain that they have violated the law".

What has operation contributed to the Greek crisis

As in the "sub-prime" crisis, the use of the "derivative contracts" would have encouraged the Greece to accumulate debt by selling, for example, in a way early airport fees and Lottery revenues. The fact that the number two of Goldman Sachs, Gary Cohn, made recently, in November and January, in Athens to meet Greek Prime Minister, - and to attempt, unsuccessfully, to persuade him to sell 25 billion euros of debt to Beijing under the "Financial Times"-, seems to indicate that the Bank is active in this field. Simon Johnson, the former chief economist of the IMF, called a "special audit" wishes of the Commission in Brussels on the conduct of Goldman Sachs and the manner in which the firm has been involved in other "arrangements" of the same type, with the tacit of Mario Draghi, current goodwill Chair of the Forum and financial stability Executive of Goldman Sachs London at the time. He also wondered about the passivity of U.S. regulators and the FED. "They approved those activities which directly violated the integrity of the European Union", asks the Economist from MIT.