Thursday, March 11, 2010
Greek Military Spending
"Concerns that Greece and other struggling European nations may not be able to repay their debts are focusing attention on another bug worry: Economies across the Continent have used complex financial transactions--sometimes in secret--to hide the true size of their debts and deficits. ... Despite criticism, european leaders deemed many of these moves acceptable as they sought the long-planned currency union. ... In 2000, Grrece reported that it spent E828 million ($1.13 billion) on the military--about a fourth of the E3.17 billion it later said it spent. Greece admitted to underreporting military spending by E8.7 billion between 1997 and 2003. Portugal classified subsidies to the Lisbon subway as equity purchases. But even though the swaps prettied up the accounting, they didn't affect the underlying economics: A drop in the euro would leave Greece with a losing swap position. In 2000 and 2001, that happened, according to people familar with the situation", my emphasis, Charles Forelle and Susanne Craig at the WSJ, 22 February 2010, link:
Countries lie? About military spending? But the US spends 45% of the world's total. Sure.