Eurostat now suspects that other European nations, potentially even crisis-stricken Italy, could be hiding the extent of their debt problem using swaps just like Greece has.
If multiple nations have been fooling the Eurozone’s own statistical office, then we really can’t be sure what the Eurozone’s aggregate financial situation really is, now can we.
This could be bad news for the euro if the practice was widespread:
“In case there is reason to expect that these kind of techniques have been used by other member states, not only Greece, then we will request information from other member states,” said Mr Rehn.
The Finnish politician said Eurostat had no evidence of other capitals using the swaps, but the statistics agency was also unaware of Athens’ activities until very recently.
Media reports over the weekend said Europe’s other chronic big spender, Italy, has also used the off-balance sheet items in the past to hide its debt pile.
Greek finance minister George Papaconstantinou told journalists on Monday: “Greece was not the only country using them. They have since been made illegal and Greece has not used them since.”