Greece debt crisis: Where the loans really flow

Billion have so far been paid to Greece. Almost all the banks have benefited from the aid to Greece, is always maintained. But is that true?

It is an argument that has become independent and to hear in every Greece talk show and many political debates are: have provided with the 220 billion euros, the euro countries, European Central Bank and International Monetary Fund Greece since the crisis began effectively available, were almost exclusively foreign banks rescued. In the Greek population, on the other hand, is as good as nothing arrived, it is said of many who rail against the bailout policy failed in their eyes of creditors. Greek Finance Minister Yannis Varoufakis claims that 90 percent of the aid would have used the banks. The argument sounds a lot, but it discredits all efforts to bring the Greek economy up and running as a purely selfish act. But it is also true?

While it is true that banks in France, Germany, and America have benefited from the bailouts – but that’s not the whole truth. That at least is the result of an evaluation of the Munich Ifo Institute, which is open to the public for a month. Of the loans and support measures one-third had only been of benefit to foreign lenders, the Greeks, however, had benefited itself of two-thirds of the money – in the form of a higher level of consumption, which they would otherwise not afford, and capital flight abroad. “From this perspective one can roughly assume that the public credit means that Greece has received during the crisis, a third of the Greek current account deficits, a third of the repayment of Greek foreign debt and a third of the investment of Greeks Abroad served,” writes Ifo -President Hans-Werner Sinn in the analysis.

Meaning calls richer Greeks as profiteers

To bail out the banks and financial investors, “who had been involved in Greece and demanded public connection loans, which should be enabled Greece to repay its debt,” it’s actually gone in the first rescue operation of international creditors in the spring of 2010. End of March 2010 had French banks after the Ifo calculating claims of 53 billion euros to private and public sector borrowers in Greece, German banks had to comply with 33 billion euros, 10 billion euros of American and British of 9 billion euros. Just to look at these sums but grab much too short.

Meaning that takes into account for its evaluation and the credit flows between European central banks (Target balances), makes a related with the support measures “overshoot of consumption” in Greece. The Economist puts the private and public consumption in relation to the Greek net national income for its analysis. While the ratio in Germany lies at just under 90 percent for a long time, whether in Greece after euro accession in 2001 of 95 “increased to values of 110 percent, where it remained up to the present.”

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The sense of the view that this level of consumption is difficult to reconcile with the thesis of a humanitarian catastrophe by Broken savings. and material prosperity – – but the Greek gross domestic product has declined significantly in recent years. Unemployment is at record levels. Also, the level of pensions and the number of public employees were reduced. In an overview of the European statistical office Eurostat, in which the “actual individual consumption” – an adjusted for purchasing power value for the material well-being of households – is compared, Greece was in 2014 in the EU in 15th place of the 28 countries with a level of consumption that is 17 percentage points below the EU average. Germany is ranked 2nd with 23 points above the average. In addition to the funds for the foreign banks and the artificially aided consumption meaning is expressed mainly in wealthier Greeks as beneficiaries of aid loans. “In fact, there are anecdotal reports that Greeks have transferred money abroad on a large scale to acquire assets there, such as Bulgaria, where she appeared as homebuyers in appearance,” writes sense.

For Germany are 90 billion euros in the fire

In other southern European countries like Italy, the bank’s argument of Varoufakis will be taken up again and again. But while many arguments are forgotten, the three and five years, public discussion, especially in southern Europe certain: Back then pounded just Italians that rescue loans are provided. All doubts in Germany and northern Europe were branded as lack of solidarity behavior, also as dangerous as yet could collapse, the European monetary union without bailouts like a domino game in which one stone after another fall.

During the dispute over the true beneficiaries of the loans is related to the past, the question could in the future be at the heart of how much could lose in the event of a Greek sovereign default and the Greek banks in the euro countries. Also, the Ifo Institute has recently calculated (with reference to the figures of the end of March 2015). For Germany, therefore, are at worst almost 90 billion euros in the fire.