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21 Apr, 2010 15:43

“Greece made mistake of taking advice from Goldman Sachs”- economist

“Greece made the mistake of taking advice from the Investment Bank Goldman Sachs in using exotic derivatives literally to hide their public debt from the European Commission,” says William Engdahl, economist.

He points out that Greece actually kept secret billions of dollars worth of debt off the books, which came out last year when the new government revealed that the public deficit in spending was up to almost 13 per cent of GDP, the level seen in some Third World Countries during the 1980s debt crisis.

Engdahl does not think that the European Union will drop its struggling members to stay afloat.

“The fact that the Merkel government and German government backed down on its hardline stance against the bail-out indicates that …they will bail it out,” Engdahl points out.

The economist suggests measures that could prevent other European Union governments from finding themselves in the position of Greece.

“The European Union governments would do very well to take Goldman Sachs, which is under federal investigation charged with fraudulent practice in the US, and make sure that these large banks like Deutsche Bank, Goldman Sachs and so forth are not in the position to use these derivatives to manipulate public debt and to weaken the finances,” says William Engdahl.