Greece’s public finances have been under intense scrutiny in recent weeks. Questionable accounting practices have been used that may have hidden the extent of the nation’s debt crisis. Greece is not alone. Finland has used similar tricks in the past.

The eurozone pact requires countries to keep total debt below 60 per cent of gross domestic product and annual budget deficits under 3 per cent. To meet the criteria various accounting measures have been used by some countries in order to make their official statistics measure up. Some complex financial transactions have been used as well.

Finland used a variety of techniques to massage official statistics. From 1995-2001 Finland engaged in securitisation operations in regards to housing loans granted by the State Housing Fund. These loans were transferred to another entity, Fennica, which in turn issued bonds on the market using the loans as guarantees. The net result was a transfer of debt from Finland to Fennica and out of official statistics.

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DAVID J. CORD - HT