Competition among banks but also among former government «partners» has helped bring to light the occult ways used to finance part of the public debt. An announcement of an article in the specialist magazine Risk talks about a 10-billion-euro swap made by the Greek State and continually recycled. Besides the magnitude of the swap, the magazine reveals that many of these loans are permanently refinanced and never appear in official figures. The announcement, published on Tuesday, is the following: «US investment bank Goldman Sachs has structured a 10-billion-euro swaps ($11 billion) contract to help the Greek government meet its European Union (EU) debt targets. «Goldman used ‘off market’ cross-currency swaps to effectively extend a loan of about 1 billion euros ($1.1 billion) to the Greek government, which it will have to repay in the future along with interest payments and fees running into hundreds of millions of euros. The deal also helped the country to lower reported interest payments. «Due to loopholes in EU debt-accounting rules, the deal was not disclosed in Greece’s published accounts. The emergence of the off-balance-sheet deal coincides with a number of eurozone countries facing increased scrutiny from Brussels about excessive debts and budget deficits. «Although cross-currency swaps are widely used by both companies and governments to manage their exchange rate risks, the Goldman deal was deliberately structured ‘off market’ to help Greece to manage its debts. The majority of such deals rarely enter the public domain. «The full details of this story are published in the July issue of Risk.» It follows, then, that swaps are a way to hide the true extent of the public debt for a considerable period, at a cost to the taxpayer and to the advantage of the banks involved. Commissions paid are never made public, but are simply added to the public debt which, in Greece’s case, approaches 200 billion euros. Greece used swaps to a great extent in its effort to achieve the criteria set in the Maastricht Treaty for entry into the eurozone. Goldman Sachs, mentioned in the Risk article, has drawn the ire of competitors for its ongoing deal with the Greek State. Banks literally fall over each other to secure such deals, which bring a quick and easy profit. It seems that the latest revelations are the result of the fight for Greece’s swaps. People who claim to know about these deals say that the source of the leak is to be found among domestic bankers who feel excluded from the swaps made by the Public Debt Management Organization (PDMA). The same sources say that those who now consider themselves excluded from swaps were past beneficiaries of the Finance Ministry’s patronage. In any case, this war for the management of Greece’s public debt would be less severe if there were more transparency in the transactions. But transparency was a term never associated with the public debt and even many among those who in the past clamored for more transparency seem to have accepted the need for discretion. Thus, the government can get away with evasive answers to parliamentary inquiries, knowing full well that these issues will likely remain secret. PDMA itself has never given a public account of its activities, unless it considers reporting directly to the Finance Minister to absolve it of such obligations. In the past few years, the government has used a variety of financial instruments to borrow money. Some of those have been rendered useless by Eurostat, which obliged the government last year to include securitization transactions in its debt accounts. This has forced the government to resort once again to privatization.