EU rules require members to cap debt levels at 60% of their gross domestic product and their annual budget deficits to no more than 3%. As any student of Public Choice economics would expect, this has led to all sorts of “exotic maneuvers” aimed at meeting the rules while in fact spending more than authorized. Governments’ deceitful actions range from off balance sheet budgeting to the use of currency swaps and other derivatives “to artificially massage cash flows and liabilities” in order to meet debt and deficit thresholds.
The irony is that private sector firms that have engaged in this type of behavior have been pilloried and their executives faced prison time. None of that will happen to government members and parliamentarians; that’s the privilege of making the rules and enforcing them.