A study by two German researchers concludes that of the 216 billion euros of the redemptions of the last six years, only 9.7 billion went to the Greek budget. That is, less than 5% of the total served the population, while 95% went to the coffers of European banks.
The study published by the German economic newspaper Handelsblatt is written by Jan Hildebrand and Thomas Sigmund, researchers at the European School of Technology and Management in Berlin. And concludes that the priority of bailouts designed by the ECB, European Commission and IMF was to save the banks and private creditors, not the Greek people.
"The bailout packages served first to rescue the banks," confirms Jörg Rocholl, president of the institution and adviser to Minister Schäuble. The study shows that 86.9 billion were used to pay off old debts, 52.3 billion went to pay interest and 37.3 billion went to the recapitalization of banking in Greece.
Although the money paid for debt service is always an expense of any state budget, the truth is that Greece has been bankrupt since 2010, notes the German newspaper, casting doubt on the way the redemptions were conceived.
"Greece would be in a better position today if there had been debt relief at the beginning of the crisis in 2010, much damage would have been avoided for both Greece and Europe as a whole," says Marcel Fratzscher, president of the German Research Institute Economical (DIW), to Handelsblatt.
Comments
But the EU, with its rules written on tissue paper, and its "assumption" that borrowers have the same views on debt as lenders, and the introduction of the euro currency, is at fault.
When England and Scotland combined in the early 18th century, they took care to amalgamate their fiscal systems; so did the United States in the late 18th century. The EU was formed without this essential first step, and is unsustainable until that step is rectified. One of the few good decisions made by Gordon Brown was for Britain to remain outside the euro bloc.
CHIP IS CORRECT - lenders have a legal right to assume that debts will be paid, but where debts turn into bad debts, they have no right to expect rest of taxpayers to make good on their bad decisions. If I lend money, I don't expect the state to bail me out if I make a bad decision - that's what insolvency law if for? Let's not forget who the parasites are here: the banks. When they make profits, they're private profits. When they make losses, the come begging for rescue.
In retrospect, we made a big mistake no simply letting the Greeks default. If German, Italian, French, UK and Spanish banks make bad decisions - that's not our problem.
The problem is the EU standards which are as solid as tissue paper. They have no idea where the money went in Greece; they don't even know where THEIR (our) money went - witness 21 years of accounts that have failed audit and not one bureaucrat jailed.
How much of this debt -if public borrowing - was diverted into private pockets and then off-shore or ploughed into 'private projects'? If private borrowing how much was unsecured to any asset. Other peoples money just handed to 'friends and family'? As with Greece and Italy - Portugal (a far smaller economy) has half a trillion of unsustainable debt, and rising by millions each week, to pay back. They should be left to get on with continuing to fail as they have failed so many of us over the years.