It’s now well known that Eurostat accounting rules allowed Greece to keep billions in debt-like obligations off its books. But just how much debt does Greece have?
The official estimate is €270 billion or $366 billion now that the hidden debt has been brought back on to the books. But a management consultant in Greece says there a huge liabilities not yet accounted for.
His jaw dropping estimate: Greece may have as much as €55 billion that remains “off-the-books.”
He says that this number has been widely discussed in the Greek press, although it hasn’t gotten much attention in the English language media.
- Interest rate swaps generate an additional EUR 5.5 bln in debt to Ethniki;
- It is estimated that there are at least a further EUR 6 bln in debt to public healthcare organisations beyond the EUR 6.3 bln already added to the debt in the debt revision of October 2009 (which lead to Greece’s deficit rising to over 12%);
- The Central Government has guaranteed a further EUR 26.2 bln in debt from various semi-government organisations and local authorities which should be stated on the government balance sheet, but is not.
- The Commission also points out that it is impossible to estimate current debt due to two additional points:
a. Most social security funds have not yet published accounts for 2008 and 2009. Many other semi-governmental organisations are equally in arrears.
b. The precise level of government expenditure obligations under the raft of public-private partnerships signed during the Karamanlis years cannot be established.
All this means that there is at least EUR 37.7 bln in “known” debt which is not currently recorded. I suspect that there is far more. For instance, the Hellenic Railway Organisation (OSE) has recently been recording annual loses in excess of EUR 500 mln in recent years. The state aid that was to be repaid by Olympic Airways was estimated at EUR 650 mln, while the Karamanlis government also agreed to absorb a further EUR 700 mln in early retirement costs for Olympic staff (which the Papandreou government has recently repudiated).
I would say that a conservative estimate of “off-the-books” debt is at least EUR 40 bln, and quite possibly EUR 50-55 bln, as has been stated in a number of press reports in Greece.