EUROPEAN UNION authorities have requested information from the Greek government about currency swaps it entered into on advice from Wall Street banks.

The transactions were undertaken as recently as 2008, and have come under scrutiny as a possible means for the highly indebted government in Athens to mask further borrowings from the public. “The question is, was this legitimate in government management operations?” Amadeu Altafaj Tardio, a European Commission spokesman, said of the transactions.

Goldman Sachs and other investment banks arranged swaps that allowed the Greek government to raise funds to trim its budget deficit while pushing payments well into the future. Those transactions were not classified as loans, according to a report in the New York Times.

The Greek government failed to disclose information about the transactions to a Eurostat team that visited Athens in September 2008 to monitor Greece’s debt management.

A Eurostat spokesman declined to say which transactions were subject to the group’s request, or whether it was focusing on the work of specific banks.

Since the emergence of the Greek crisis, the EU has sought to tighten the rules that govern the reporting of member states’ fiscal statistics. The European Commission yesterday approved a slate of measures that would strengthen Eurostat’s hand to collect such data. Those measures will now go to the European Council for consideration.

Meanwhile, Greeks with knowledge of the 2002 currency swap and a series of asset-backed securitisation deals – all carried out under the previous Socialist government that held power between 2000 and 2004 – yesterday voiced surprise at Eurostat’s statement.

“Eurostat knew all about these deals, which were perfectly legal at that time. We didn’t keep them secret,” said a former senior Greek finance ministry official. – (Copyright The Financial Times Limited 2010)