Goldman Sachs defends 2001 derivative trades for Greece

City A.M. Reporter
Goldman Sachs has defended the cross-currency derivatives it conducted for Greece in 2001 which reduced the country’s debt as a common currency risk management procedure consistent with EU debt reporting rules.

The US bank said that it did the deals to reduce foreign denominated liabilities of Greece, which had become a priority following the nation’s entry into the single European currency.

“The Greek government has stated [and we agree] that these transactions were consistent with the Eurostat principles governing their use and application at the time,” the bank said in a statement on its website.

Details on the nine-year old swaps have re-emerged after several months of concern about Greece’s budget and debt levels. The country has battled to establish credibility over reducing its budget deficit, which at just under 13 per cent is more than four times the three per cent level stipulated by Maastricht.

Meanwhile, the European Union and Germany yesterday denied it was planning a €20bn to €25bn aid plan for Greece, and Athens pledged again to take new steps if needed to keep tough deficit-cutting plans on target.