Wall St. Helped to Mask Debt Fueling Europe’s Crisis
Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.
Even as the crisis was nearing the flashpoint, banks were searching
for ways to help Greece forestall the day of reckoning. In early
November — three months before Athens became the epicenter of global
financial anxiety — a team from Goldman Sachs arrived in the ancient
city with a very modern proposition for a government struggling to pay
its bills, according to two people who were briefed on the meeting.
bankers, led by Goldman’s president, Gary D. Cohn, held out a financing
instrument that would have pushed debt from Greece’s health care system
far into the future, much as when strapped homeowners take out second
mortgages to pay off their credit cards.
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