ΤΟ ΞΕΒΡΑΚΩΜΑ ΣΗΜΙΤΗ-ΓΙΑΝΝΟΥ-ΝΔ ΓΙΑ ΤΑ SWAPS

Η Ελλάδα υπόδουλη των μεθοδεύσεων Σημίτη. Η οικονομία στα χερια Παπακωνσταντίνου.

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EUROSTAT.pdf
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ΔΕΝ ΜΕΤΑΦΡΑΖΩ ΔΙΟΤΙ ΘΑ ΧΑΘΕΙ Η ΟΥΣΙΑ. ΘΑ ΕΠΙΣΗΜΑΝΩ ΤΑ ΒΑΣΙΚΑ στο τέλος του άρθρου.

ii) Transactions on derivatives in Greece
This section is a short summary of the difficulties that Eurostat encountered in order to get complete  and  reliable  information  about  the  derivatives  and  notably  about  the  swaps transactions carried out by the Greek public debt agency (PDMA).

At the beginning of the year 2010, it became known that Greece had entered in 2001 into currency off-market swap agreements with Goldman Sachs, using an exchange rate different from the spot prevailing one. The Greek authorities had not informed Eurostat on this issue and no opinion on the accounting treatment has been requested from Eurostat as it should be

the case for transactions that are not explicitly covered by its rules. In addition, Eurostat had been  previously   wrongly  informed  by  the  Greek  authorities  that  there  had  been  no occurrences of off-market swaps in  the past, following a questionnaire sent to all Member States requesting information on swaps operations. In  2008 the Greek authorities wrote to Eurostat that: “The State does not engage in options, forwards, futures or FOREX swaps, nor in off market swaps (swaps with non-zero market value at inception).“

After the Goldman-Sachs (GS) case became known, Eurostat raised additional questions to the Greek authorities. The existence of currency swap transactions, as well as an interest rate swap  linked  to  them,  was  confirmed  but  no  detailed  information  was  provided  before Eurostat’s EDP methodological visits on 22-24 March 2010 and 29-31 March 2010.  Eurostat was also informed that this interest rate swap (IRS) had been substantially amended several times because the position of Greece in the swap worsened significantly due  to “adverse market trends”.

Two issues on swaps were on the agenda during Eurostat’s methodological visit on 21-22 June 2010.
First, on the basis of the information that had been provided, Eurostat informed the Greek authorities of its analysis as regards the correction that should be implemented at the level of the Greek Maastricht debt for the GS swap.
Second, at the request of Eurostat, the Greek authorities informed Eurostat that from 2005 to 2007 they entered in numerous small “off market interest rate swaps” (adequate data on these transactions however were provided only in September 2010) (****)


Finally, it is because of this recurrent delays by the Greek authorities to provide Eurostat with a complete and  adequate information on all swap transactions, that most issues related to swaps were only resolved during the Eurostat mission on 27-28 September 2010. On the one hand, the correction for the 2001 transactions was  agreed on as mentioned below. On the other hand, Eurostat and the Greek Authorities agreed on the treatment for EDP purposes of the other off-market swaps implemented by Greece from 2005 onwards. It was confirmed that these swaps had very short maturity, with a quick amortisation of the loan component for a rather small  cumulative amount, and at the end of 2009 the remaining impact was quite negligible. (****)


iii) The Eurostat analysis of the swaps with Goldman Sachs

In 2001 a series of off-market cross-currency swaps were effectively linked to underlying debt instruments issued on foreign markets. Greece entered in 13 contracts with Goldman Sachs (GS) involving exchange of different  currencies against the euro, with the exception of an
- 1 USD/CHF swap maturating in 2004,
- 9 swaps involving JPY/EUR (these constituted by far the highest amount in euro!!!) and
- 3 swaps exchanging USD/EUR.
Maturities also varied, from 2002 to 2016, with a higher concentration on 2008 and on 2016. Most contracts were “fixed- for-fixed”, with  some of them including a conversion option to a variable rate (paid by Greece).

As the contracts were not based on the prevailing spot market rates of exchange at the time of the swap transaction but on different ones, the Greek government debt was de facto reduced by EUR 2.4 billion by the conversion process (a more favourable rate for the euro which has been used in the contract). It resulted that the obligations by the different parties under the swaps were at inception unbalanced and, normally, Greece should have made an equivalent payment in cash!! in order to compensate its swap counterpart !!!!, with an unfavourable!!! effect on the government deficit!!!.

Instead the Greek authorities agreed that this above-mentioned lump sum would be repaid through an off-market interest rate swap that was structured such that the repayment by Greece would be  spread by way of annual net interest payments until 2019, following a grace period of two years for such payments. The impact on the deficit therefore appeared over many years and the impact on the Greek accounts was low on a yearly basis.

For Eurostat, in substance and notwithstanding the fact that no payment of a lump sum took place at the start of the IRS contract, this is to be considered as a loan granted to Greece by GS in order to face its payment obligations resulting from the off-market swaps. Actually, all swap transactions, most of them carried out at the same date in June 2001, are to be seen as part of a single global arrangement.

The loan component in the 2001 IRS ( interest rate swap ) transaction amounted to EUR 2.8 billion, as EUR 0.4 billion  were  additionally  linked  to  the  cancellation!!!  of  three  other  currency  swaps  with negative value undertaken  before 2001 (two currency swaps JPY/EUR and one USD/EUR with rather short term remaining maturity and for an amount of EUR 1.6 billion).

Subsequently,  the  IRS  swap  was  actively  managed,  as  several  revisions  (also  named amendments) took place in the following period. This is a feature which does not seem to be commonly observed in normal  market practices. The revisions of the swap contracts dealt with the floating leg of the swap paid by Greece. Different formulae, including references to the inflation index, were implemented in succession in order to take into account the change in the market value of the swap resulting from market trends.

In August 2005a significant restructuring of the swap contract took place. The maturity of the swap was extended from 2019 to 2037. The interest rates used in the contract were reviewed, both on the fixed leg and on the variable leg. The principal notional amount of the contract was reduced. As a result, the level of the net annual payment by Greece to GS was slightly changed.

KAI ΦΤΑΣΑΜΕ ΣΤΗΝ ΕΚΠΛΗΞΗ !!!!… Η GS ΠΟΥΛΗΣΕ ΔΙΚΑΙΩΜΑΤΑ ΚΑΙ ΥΠΟΧΡΕΩΣΕΙΣ ΤΗΣ ΣΥΜΒΑΣΗΣ ΣΤΗΝ ΕΘΝΙΚΗ !

Almost at the same time, GS sold its rights and obligations to the National Bank of Greece (NBG, a bank completely privatised in November 2004) for an  amount that was exactly the market value of the swap at that moment and is to be considered as the value of the negative position for Greece, i.e. a liability to be paid.

The swap was marginally restructured again in late 2008 by a small increase in the notional principal amount  and a slight reduction in the spread applied to the Euribor floating rate reference.  Finally, the swap was securitised in February 2009 via a Special Purpose Vehicle (Titlos) that paid EUR 5.5 billion to the NBG.

Eurostat closely considered the detailed documentation received in April 2010 from the Greek authorities showing that new transactions (originations) did take place in the years following 2004. For instance in 2008, the contractual arrangements between the National Bank of Greece (NBG) and Greece stated explicitly that “For this trade to be unwound Counterparty A – HR- would pay on 31 Dec 2008 to Counterparty B – NBG- 5.4 bio EUR“, whereas “For this trade to be initiated Counterparty B pays on 31 Dec to Counterparty A 5.4 bio EUR“. These two payments were netted so that, as stated in the  documentation received, Greece neither received nor paid any cash in this transaction. ( ΜΕ ΛΙΓΑ ΛΟΓΙΑ 31 ΔΕΚ 2008, ΣΤΟ ΙΔΙΟ ΣΥΜΒΟΛΑΙΟ ΤΟ ΚΡΑΤΟΣ ΠΛΗΡΩΝΕΙ 5.4ΔΙΣ ΣΤΗΝ ΕΘΝΙΚΗ, ΑΛΛΑ ΓΙΑ ΝΑ ΓΙΝΕΙ ΑΥΤΟ ΠΡΕΠΕΙ Ν ΕΘΝΙΚΗ ΝΑ ΠΛΗΡΩΣΕΙ 5.4ΔΙΣ = 0 !!! ΚΑΝΕΙΣ ΔΕΝ ΠΛΗΡΩΣΕ ΚΑΝΕΝΑΝ  )

Following the description of the amendments of the swap contracts which occurred between 2001 and 2008, Eurostat pointed out the significance of the changes that occurred at the above-mentioned dates,    2005    and    2008.    At    such    moments,    contrary    to    other amendments/revisions that dealt only with the way in which the floating payments due by Greece were reshaped, and had only small consequences, there were significant modifications in the obligations due by parties, with a noticeable extension of the maturity of the swap.

For Eurostat, a change in the contract that results in a significant transformation of the obligations of one or both parties must be considered in substance as a new swap agreement. In this context, the market value of the previous swap should effectively be considered as the new amount of the loan component included in the new off-market swap.

Therefore, the restructuring operations are new contracts between parties. In substance this must be interpreted also as the spreading of a lump sum amount that otherwise should have been paid immediately by  Greece to the counterpart in the contract, as in the absence of revisions, at least in case of substantial ones, it is very likely that the swap would have been written off with the payment of compensation due to negative market value for Greece. The liability due by Greece that should have been extinguished was used for redesigning a new transaction that foresaw new obligations for Greece taking account of this liability. Thus the revisions resulted in postponing the impact of the negative value for Greece by spreading it on a longer period,  about 30 years, i.e. 20 years more than initially agreed. As a result, the restructuring operations implemented in 2005 and 2008 were in fact the explicit recognition of an increase of the liability (principal amount of the loan) to be recorded as debt of Greece. In other words, an increase in the  principal amount of the loan granted to Greece must be recorded in Government debt.

In addition, at the same time, there must be a correction throughout the whole period for the deficit of Greece, as the flows of interest under the swap contract are reduced by an amount equal to the part of any settlement  flows relating to the amortisation of the loan (this is a financial transaction with no impact on the deficit),  whereas interest on the loan are still imputed as expenditure. The method is explained through an example in the 3rd edition of the Manual for Government deficit and debt (Part VIII).

All the appropriate corrections have now been implemented in the EDP notification released on 15 November  2010. In the latter, the correction for the relevant transactions has the following effect:

1) Increase in the debt (loan component)18

Amounts in millions €

2006	2007	2008	2009
5.125,5	5.125,5	5.400,0	5.281,7

2) Reduction of deficit (amortisation of the loan)

Amounts in millions

2006	2007	2008	2009
*	*	123	118.3

18   As regards the impact for previous years that are not covered by the notification, the debt increased by 2.830 bn euros in
2001. There was a grace period of two years in 2002 and 2003, with no settlements exchanged under the IRS so that the amortisation of the original loan starts in 2004.

* “grace period” (no settlements under the new swap contract agreed in 2005)



iv) Conclusion

Before the correction requested by Eurostat, the level of the Greek government debt did not reflect the real level of liabilities incurred under the swap contract implemented in June 2001. The above-mentioned investigations show that the implementation of different swaps in 2001 have been structured with the intention to reduce the outstanding amount of debt, for the part denominated in foreign currencies after conversion into euro, by the deliberate use of a rate of exchange different from the spot rate at this time. The IRS, with a specific distribution of the flows, was a crucial element of this global arrangement as it was designed such  that the compensation normally to be paid by the Greek government was spread, after a grace period of two years, originally until 2019, and later up to 2037.

Following Eurostat investigations on the swap issues in Greece, all the appropriate corrections have now been implemented in the EDP notification released on 15 November 2010.
ΤΙ ΣΧΟΛΙΑ ΝΑ ΚΑΝΩ????.
ΤΑ ΠΡΑΓΜΑΤΑ ΜΙΛΟΥΝ ΑΠΟ ΜΟΝΑ ΤΟΥΣ… ΕΝΩ ΠΕΡΙΜΕΝΑΜΕ ΚΑΘΑΡΣΗ ΑΠΟ ΚΚ ΒΛΕΠΟΥΜΕ ΣΥΝΕΧΕΙΑ ΣΤΗΝ ΟΥΡΑ ΣΗΜΙΤΗ.
ΤΟ ΔΕ ΠΑΣΟΚ ΔΕΝ ΗΞΕΡΕ ΔΕΝ ΑΚΟΥΣΕ ΜΕΧΡΙ ΣΕΠΤΕΜΒΡΙΟ 2010 !!!! ΤΑ ΔΕ SWAPS ΘΑ ΜΑΣ ΣΚΑΝΕ ΜΕΧΡΙ ΤΟ 2037.
Η ΤΡΑΜΠΑ ΤΗΣ ΣΥΜΒΑΣΗΣ GOLDMAN SACHS – ΕΘΝΙΚΗΣ ΤΟ 2005 ΤΙ ΜΑΣ ΛΕΕΙ ???
ΤΙ ΘΑ ΠΟΥΝ?? ΔΗΜΙΟΥΡΓΙΚΗ ΛΟΓΙΣΤΙΚΗ ( ΣΥΝ 5.4ΔΙΣ ΠΛΗΝ 5.4ΔΙΣ = 0 ) ??? ΟΤΙ ΜΠΑΛΩΣΑΝ ΤΙΣ ΤΡΥΠΕΣ ΣΗΜΙΤΗ?? ‘ΑΛΛΑ ΛΕΕΙ Η EUROSTAT !
ΕΝΩ ΔΑΝΕΙΖΟΜΑΣΤΕ ΑΠΟ ΤΗΝ GOLDMAN SACHS ΓΙΑ ΝΑ ΠΛΗΡΩΝΟΥΜΕ ΤΙΣ ΔΙΑΦΟΡΕΣ ΕΠΙΤΟΚΙΩΝ ΤΩΝ SWAPS ??
NA ΘΥΜΙΣΩ OTI
1. Η ΛΟΥΔΙΑΔΗ ΚΑΙ Η GS ΠΗΡΑΝ 750 ΕΚ ΑΜΟΙΒΗ ( ΓΝΩΡΙΖΑ 300 )
2. Ο ΧΡΙΣΤΟΔΟΥΛΟΥ ΗΤΑΝ ΣΤΗΝ ΕΘΝΙΚΗ ΑΦΕΝΤΙΚΟ ΣΤΟ PRIVATE BANKING ( ΑΦΟΥ ΕΦΥΓΕ ΑΠΟ GS ) KAI ΣΗΜΕΡΑ ΔΙΑΧΕΙΡΙΖΕΤΑΙ ΤΟ ΔΗΜΟΣΙΟ ΧΡΕΟΣ ΜΕ ΜΙΣΘΟ ΔΗΜΟΣΙΟΥ ΥΠΑΛΛΗΛΟΥ… !!!
OTAN ΜΙΛΑΜΕ ΜΕ ΣΤΟΙΧΕΙΑ ΚΑΙ ΔΗΜΟΣΙΑ, ΑΠΑΙΤΟΥΜΕ ΚΑΙ ΑΠΑΝΤΗΣΕΙΣ ΔΗΜΟΣΙΑ…. ΑΠ ΟΛΟΥΣ !
ΠΠ
ΟΛΥΜΠΙΑΔΑ