Goldman Sachs Hid Greece's Debt

Greece's overwhelming national debt has set off yet another global economic crisis—and just like the last one, American banks are at the center of the story. According to the New York Times, Goldman Sachs and other U.S. banks played a key role in postponing Greece's day of reckoning while it racked up more debt by using a variety of complicated financial tactics reminiscent of the mad science that sparked the subprime mortgage crisis. Just months before the current crisis, in November 2009, Goldman president Gary Cohn led a group of banks in offering Greece a way to refinance their health-care debt, but it was hardly the first of such efforts. In 2001, Goldman Sachs engineered multi-billion dollar loans for the government hidden behind currency trades to help it skirt the EU's deficit rules. “Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it,” Gikas A. Hardouvelis, an economist who's studied Greece's accounting, told the Times.