According to Spiegel Online, Greece has been getting liar loans from everyone’s favorite subprime lender. In this case, the lying was about the exchange rate (the loans were structured as currency swaps with “fictional exchange rates”) and the national balance sheet (the “credit disguised as a swap didn’t show up in the Greek debt statistics”). As with many subprime loans, these are designed to explode in the “long term” (i.e., after the insiders have gotten the hell out). Of course, the insiders got out quickly: “Goldman Sachs charged a hefty commission for the deal and sold the swaps on to a Greek bank in 2005″ (one would expect nothing less!).
So how big are Greek debts? “In 2002 the Greek deficit amounted to 1.2 percent of GDP. After Eurostat reviewed the data in September 2004, the ratio had to be revised up to 3.7 percent. According to today’s records, it stands at 5.2 percent.” Hey, what’s a few percent of GDP between friends?
Whatever credibility Greece may have had, it’s gone now. And does anyone think that their able bankers didn’t sell similar products to other greedy piigs?