16 Feb 2010

Greece asked to explain currency deals

10:10 am on 16 February 2010

The European Union has called on Greece to explain reports that it used complex financial deals to hide the true extent of its debts.

The Greek government has already said earlier figures on the state of the public finances were false, the BBC reports.

The EU has given Greece until the end of February to give details on how complicated financial deals, called currency swaps, affected the Greek government's financial accounts since 2001.

The BBC says reports suggest that in 2002 Greece did at least one complex currency deal arranged by US investment bank Goldman Sachs and that the choice of exchange rate made the debt appear smaller than it really was.

Greece's finance minister George Papaconstantinou says some of the swaps used in the past were at the time legal, and Greece was not the only country using them. He added that they have now been made illegal, and Greece has not used them since.

Mr Papaconstantinou wants other eurozone nations to release a detailed plan of how they will bail out his country. He said such a move was necessary to ease market fears that Greece could default on its debts.

Eurozone leaders pledged last Thursday to support the country, but stopped short of detailing any exact proposals.