Greece Had 13 Currency Swaps With Goldman, Eurostat Says
Greece had 13 off-market derivative contracts with Goldman Sachs Group Inc. (GS), most of which swapped Japanese yen into euros 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 on its website today. 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 5.3 billion euros ($7.5 billion), Eurostat said in November.
Today’s report provides details of Eurostat’s analysis of data obtained by its inspectors in Greece last year. Eurostat said most issues surrounding the swaps were resolved in September, when Greece agreed to correct its debt figures.
A phone call and an e-mail to a Goldman Sachs spokeswoman in London weren’t immediately returned.
Greece agreed in September with Eurostat to treat other swaps from 2005 as debt. Those contracts had “very short maturity, with a quick amortization of the loan component,” Eurostat said.
The Goldman Sachs deal originally amounted to a loan of 2.8 billion euros, according to Eurostat. National Bank of Greece SA (ETE), the country’s biggest lender, in 2005 took over the swap from New York-based Goldman Sachs. Four years later, National Bank securitized the swap, Eurostat said.
To contact the reporter on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net
To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net.
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