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EU asking Greece to explain derivatives reports

Published 02/15/2010, 08:30 AM
Updated 02/15/2010, 08:33 AM

By David Brunnstrom and Luke Baker

BRUSSELS, Feb 15 (Reuters) - The European Commission said on Monday it was asking Greece to explain reports in the U.S. and German press that it engaged some years ago in derivatives deals with U.S. investment banks to cut its deficit and debt figures.

According to a report in the New York Times, one contract allegedly involved Greece selling forward its future receipts from lottery ticket income and airport landing fees in exchange for cash that was used to write down debts.

Greece did not inform Eurostat, the European Union's official economic statistics agency, about any such transactions so the agency has asked for more information from Athens, commission spokesman Amadeu Altafaj told a regular briefing.

"I want to state that Eurostat was not aware of such transactions," he said. "But I can tell you that Eurostat has, indeed, following these reports, already requested the Greek authorities for an explanation by the end of February."

Asked if the derivatives trades that Greece is alleged to have done fell within EU budget rules, Altafaj said:

"We need the information on what kind of transactions took place, if they did, and what was the effect on the government accounts of Greece. This allegedly took place in 2001.

"This is something that we don't have the information (on) yet and we have requested. Based on that information we will make an assessment."

A senior Greek finance ministry official told Reuters on Monday that Greece's current debt financing operations were transparent and complied with Eurostat rules.

"As far as operations regarding debt financing are concerned, all such operations are conducted in an effort of transparency and in order to be fully Eurostat-compliant," the official said, without commenting further.

At a meeting later on Monday, euro zone finance ministers were due to exert more pressure on Greece to implement planned budget deficit cuts. EU leaders pledged last week to help Athens resolve its crisis if needed, but they are still hoping to avoid having to provide concrete aid. [ID:nLDE61E0YM]

Inaccurate Greek data on its debt problems, some of it apparently deliberate and politically motivated, has fuelled its debt crisis by angering investors and Greece's EU partners.

Last October, the incoming socialist government revealed Greece's 2009 budget deficit would be twice as big as a previous estimates -- and four times the EU ceiling. [ID:nLDE6131TT] (Writing by Andrew Torchia; Editing by Ron Askew)

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