Skip to comments.Germany Making Big Euros Off Greek, Eurozone Crisis
Posted on 08/27/2012 7:09:36 PM PDT by SunkenCiv
When Greece makes a $3.98 billion loan payment this month to the European Central Bank, one of its international lenders in bailouts, Germany -- which is putting up much of the rescue monies -- will reap the biggest profit, eFXnews reported.
FT Deutschland noted that by 2026, when Greece is expected to finish paying off $325 billion in two bailout packages, that Germany could realize $15.8 in gains. In the meantime, Germany has already made significant gains from the very low interest rate it paid to finance its debt as shown in the calculations of economist Jens Boysen-Hogrefe of Germany's Kiel Institute, Handelsblatt reported.
According to these calculations, over the past three-and-a-half years, Germany saved $84.7 billion in interest costs compared to its average rate from 1999 to 2008. The Troika of the European Union-International Monetary Fund-European Central Bank is putting up the lifeline loans for Greece while EU funds have also gone to Portugal, Ireland and Spain.
German Chancellor Angela Merkel has insisted on harsh austerity measures for Greece to insure that investors â primarily banks â get paid back first ahead of Greek tax revenues going to salaries, pensions and social programs.
(Excerpt) Read more at eu.greekreporter.com ...
(source: eFXnews, Capital)
Stop picking on us, shut up, and keep the money coming. Sitting on our asses is an integral part of our culture.
that is what loans are, you pay them back with interest
How about Greece just live within its means if it doesn’t like it?
Why shouldn’t they? They are basically keeping much of Europe afloat, though they have plenty of debt themselves. Were it not for Germanys’ actions, 2-3 countries would have detonated by now. It is unfortunate that the people of these nations have to “suffer” for the profligacy of the bureaucrats in their gov’t. And they are indeed suffering, but no government, no entity can spend beyond its means, and if it does, the piper has to be paid. That includes us. We are all quite jaded by these ultra-low interest rates that have been in effect for the past 4 years. Anybody knows that mortgages used to routinely be 6-7-8%. That any entity would lend the US money for ten years at 1.8% (and it WAS 1.4% 2 weeks ago) is stupidity on their part. If the int rate that the US had to pay on its debt rose to more historically normative levels, the US economy would detonate as well.
Germany’s making a ‘pity/desperation loan’ - it’s amazing they or anyone would loan the Greeks money.
But Germany didn't have that money just lying around. They had to borrow it from someone which means that they had to pay interest to their own creditors for the privilege of lending it to the Greeks. And I would never use the word "expected" when it comes to the Greeks paying off. "Hoped" is about the best word you can use.
It was either that or the Greeks would have defaulted already, left the euro and crashed the whole house of cards. To delay that the Germans added another layer of cards to the whole unstable pile.
I wonder how the Germans will feel once they realize they will be paid back in drachmas?
Similary, the Germans will get a return because they loaned a dead-broke money. Perhaps they won't even get that return. Greece is a very risky bet now.
it’s too late. The time for living within their means was in the 90s and 00’s. NOw they must reap the whirlwind. There is no painless way out.