Economies across Europe reportedly have used complex financial transactions — sometimes in secret — to hide the true size of their debts and deficits.



European Union rules mandate that members cap debt levels at 60 percent of their gross domestic product and their annual budget deficits to no more than 3 percent, requirements intended to build trust in the euro.



However, some have sold state assets, bundled expected future payments into securities and used credit default swaps to mask their non-compliance, The Wall Street Journal reports.



"The problem for Eurostat is the flourishing of new financial instruments and techniques, says James D. Savage, a University of Virginia professor who is an authority on EU budgeting.



“Member states are going to try to take advantage of them."



Additional maneuvers: Greece insisted to the Eurostat statistics authority that large portions of its military spending were "confidential" and thus excluded from deficit calculations.



Portugal classified subsidies to the Lisbon subway and other state enterprises as equity purchases.



France agreed to assume pension liabilities for France Telecom workers in exchange for a lump sum of more than 5 billion euros, a move that helped bring France's budget gap 3 percent of GDP in 1997 and helped it to join the euro.



Germany tried to reappraise gold reserves for a fast fix in 1997.



Investors are left in the dark because Euro-zone governments are under no obligation to completely disclose details of the derivative agreements into which they enter, making it nearly impossible to determine how risky those investments really are.



Swaps are another tactic countries have used to meet the euro-zone requirements, often without publicly disclosing them, which made it difficult for investors to gauge a country's finances.



It wasn't until 2008 that Eurostat was able to revise its rules to push countries to include swaps in their debt and deficit calculations, but critics contend too little is known about countries' continued exposure to swaps deals already made.



The European Union and Germany today denied a report of a 20-25 billion euro aid plan for debt-plagued Greece, whose credit swaps with Goldman Sachs have been the focus of an investigation, The New York Times reports.



"I have no comment on such a plan that does not exist and is denied even by the alleged source of it," European Commission spokesman Amadeu Altafaj told a news briefing in Brussels.





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