Goldman Sachs has a lot to be thankful for – huge bonuses, massive taxpayer subsidies, unrivalled political influence – but in Greece they have finally found nirvana: a highly profitable business partner who can also credibly serve as the villain in the piece.
Goldman is widely reported to have arranged a swap transaction for Greece early in the last decade structured in such a way as to provide the country with $1 billion upfront in exchange for higher payments much later.
That later bit is key – it helped to mask over-borrowing by Greece from the euro zone’s budget watchdogs in Brussels, not to mention from Greek taxpayers and the buyers of Greek debt, all of whom have a right to fully understand the risks of a country incurring liabilities which perhaps it may struggle to repay.
Greece’s deficit has grown to such a size as compared to its ability to generate revenue that it will now require a rescue package from its euro zone partners, or if not may face the dire possibility of a default or exit from the currency union.
Other banks, mind you, are likely to have facilitated similar deals, and if they didn’t I’m betting it wasn’t for lack of trying.