The "Masters of the Universe" have been at it again. This time, the banksters at Goldman Sachs are implicated in the financial failure of Greece. The investment firm brokered complex currency swaps with the Greek government that allowed it to push healthcare liabilities forward and thereby hide them from regulators in Frankfurt. In one deal according to
The Independent Goldman provided $1bn in funding to the government in 2002, and
earned a $300 million fee. The international bank probably earned several times that taking short positions on Greek bonds. It is widely considered that Greece cooked its national books in order to gain entrance into the European Union. The Union imposes strict debt limits on member nations, and requires national deficits not to exceed 3% of GDP. Greece never adhered to these rules even before the worldwide financial crisis, and concealed an estimated 13% deficit under the previous government. It owes an estimated $419bn. The size and scale of the Goldman-Greece deals are not yet fully understood by the EU central bank and an audit is
certain to follow. It is clear Greece will need a massive bailout by solvent members if the country is to avoid default. But Germany's Chancellor Angela Merkle has already expressed her unwillingness to pull Greece out of its financial crisis at the cost of taxpayers.
EU leaders promised Thursday of last week that Greece would be rescued without
providing details of a plan. Betting seems to be that a mechanism will be sorted out, since Black Rock funds, the world's largest money management company,
increased its holdings of Greek bonds. Speculation has been rampant that Greece would be the next of the debt ridden European
PIIGS* to fail. Apparently, the world crouches helpless at the feet of the financial colossus that cowers even Uncle Sam. It is no wonder the CEO gets a $9 million dollar bonus for a single year's operation.
*Portugal, Ireland, Italy, Greece and Spain
