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cellor Kohl, says Gerd Langguth, a Merkel biographer and riages after divorces.

fter divorces. "Merkel comes across as utterly nomial,

political scientist at the University of Bonn, Adds Roland and the average German can really relate to her" said Carl
Berger: "She's not burdened by history. She's simply prag- Graf von Hohenthal, a management adviser at the Brunswick
matic. She knows what she wants and thinks what she does Group and former deputy editor-in-chief of Germany's Die
is in the interests of Germany and Europe. She is a European, We newspaper, who has known her since 1Q9O. "She dresses
yes, but Germany comes first." well but doesn't wear overly expensive clothes." Merkel wheels
Merkel's woman-of-the-people approach is what helped a shopping cart through her local food store, t raed by her se -
her win a second four-year term as chancellor in September. curity detail, at least once a month. She evenbags her own gro-
She and her husband, Joachim Sauera quantum chemist at ceries. "She doesn't smoke, she doesn't drink muchpower
Berlin's Humboldt University-are both in their second mar- is her thing," said Friedrich Thelen, former parliamentary

doesn't use such swaps now.
Athens got far more money
than it would have at the pre-
vailing exchange rates for the

THIS GREEK TRAGEDY euro back in 2002. Further, the

currency deal didn't show up in
officiai debt statisticsand did
not affect the debt-to-GDP
The firm's currency and bond deals for Greece have drawn fire limits for countries in the euro

zone. Goldman also extended
By Elisa Martjnuz2t a $ 1 billion up-front payment
Goldman Sachs. Wall Street's most to Athens as part of the deal.
profitable securities firm and a boon to This complex transac-
conspiracy theorists the worid over, has tion was until recently news
angered EU regulators over its role as to EU regulators, who last
Greece's enablerhelping the Greek week launched an investiga-
government mask the severity of its tion into the Greek currency
debt problems early last decade, Gold- swap. Goldman could face
man designed an off-balance-sheet legal liability "if it could be
currency swap deal that delivered a established that they were
windfall to the Greeks shortly after they knowingly hiding nsk, and
entered the euro zone. therefore knew or had
Now there's evidence Goldman reason to know that the bond
may have also misled investors disclosure documents were
when it managed the sale of $15 misleading" says Thomas
billion worth of Greek bonds in Hazen, a law professor at the
subsequent years, according to a University of North Carolina
review of bond prospectuses by at Chapel Hill. "But that would be a
Bloomberg News. No mention was Finance Minister tough hill to climb, in terms of burden of
Papaconstantinou proof. There would have to be some sort
made of the Greek currency swap
(top) and Goldman
in sales documents for the bond of smoking-gun memo." Michael Du-
CEO Biankfein
offerings in at least 6 of the 10 Vally, a spokesman at Goldman Sachs in
sales the bank arranged for since the New York, declined to comment.
pull off a lucrative cross-currency swap
2002 currency transaction. in which some $10 billion in Greek debt, Legal niceties aside, Goldman's im-
Failing to disclose the swap may have issued in dollars and yen to international age in Europe may take yet another hit.
allowed Greece, Goldman (a co-lead investors, was swapped for euro debt 'The price of bonds should reflect the
manager on many ofthe sales), and using a "historical" (and very favorable) reality of Greece's finances," Blain says.
other underwriters to get a better price exchange rate, says Christoforos Sardel- "If a bank was selling them to inves-
for the securities, says Biii Blain, co- is, then head of Greece's Public Debt tors on the basis of publicly available
head of fixed income at Matrix Corpo- Management Agency. (Greece entered information, and they were aware that
rate Capital, a London-based broker the euro zone at the start of 2001.) The information was incorrect, then investors
and fund manager. Goldman has earned swaps used by Greece to manage debt have been fooled."
about $24 million underwriting the were "at the time legal," Greek Finance -Wilh Maria Petrakis m Athens, Aaron
bonds since 2002. Minister George Papaconstantinou Kirchfeld in Frankfurt, Ilias Antoniou in
That year, Goldman helped Greece said on Feb. 15, adding the government London, and David Scheer in New York


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