Posted on 03/03/2010 11:23:16 AM PST by reaganaut1
Europeans are blaming financial transactions arranged by Wall Street for bringing Greece to the brink of needing a bailout. But a close look at the country's finances over the nearly 10 years since it adopted the euro shows not only that Greece was the principal author of its debt problems, but also that fellow European governments repeatedly turned a blind eye to its flouting of rules.
Though the European Commission and the U.S. Federal Reserve are examining a controversial 2001 swap arranged with Goldman Sachs Group Inc., Greece's own budget moves, in clear breach of European Union rules, dwarfed the effect of such deals.
Predicaments of the sort Greece is facingyears of overspending, leaving bond investors worried the country can't pay back its debtsweren't supposed to happen in the euro zone. Early on, countries made a pact aimed at preventing a free-spending state from undermining the common currency. The pact required countries adopting the euro to limit annual budget deficits to 3% of gross domestic product, and total government debt to 60% of GDP.
But an examination of budget reports to the EU shows Greece hasn't met the deficit rule in any year except 2006. It has never been within 30 percentage points of the debt ceiling.
Greece has revised its deficit figures, always upward, every year since 1997often considerably. Several times, the final figure was quadruple what was first reported. Late last year, the Greek government set in motion its current crisis by increasing its 2009 budget-deficit estimate, initially 3.7% of GDP, to nearly 13% of GDP.
Those revisions far exceed the impact of controversial derivative transactions Greece used to help mask the size of its debt and deficit numbers.
(Excerpt) Read more at online.wsj.com ...
Greeks blame NAZI theft of their gold during WW2 for this.
Europeans appear to be starting to blame US/Wall Street.
Get the feeling there is a bailout demand coming?
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