Why do German taxpayers complain for financing the Greeks? Giving loans to Greece with an interest rate of 3.4% and 4.5% brings a much better profit than just deposit it at a German bank. For example, the German contribution of 15.17 billion euro to Greece’s rescue package of 2010 brought a profit of 380 million euro. Within one year. Now if the German taxpayers did not see this amount written down in their saving books at the banks (“Sparbuch”), they should complain to Finance Minister Wolfgang Schaeuble…
I assume the same applies for the angry Dutch and Finns and all those EU taxpayers who helped bailout debt-ridden Greeks, Portuguese and Irish.
“”Germany earned 380 million euros ($502.83 million) in interest on the loans it paid to Greece under the first bailout for the debt-strapped country, according to Finance Ministry documents obtained by Reuters.
Berlin’s contribution to the 2010 rescue package for Greece amounted to 15.17 billion euros, on which the Greek government paid interest ranging between 3.423 and 4.528 percent.
As of the end of 2011, Germany had earned 380 million euros on the loans. News of the windfall may help quell some of the mounting public frustration at having to help struggling Greece, portrayed by some in Germany as a “bottomless pit”.”” ( Reuters)
Maybe because we had to spend 22 BILLIONS for Greece so far, with 36 billions more in the next bailout tranche, and that’s money that isn’t very likely to be ever paid back? Just a guess.
And the ECB is supplying loans to the banks at 1% to improve liquidity. A nice little profit. Then again, there are the losers. Doesn’t take much to work out who they are.
They complain because the German tax payer does not see anything of that money. No, they probably have to endure another cut in wages or salaries with the excuse of all the money that has to flow to Greece *sigh* And third they hear constantly that it is a gift and never hear from their quality press that it is a loan with high interest.
Might this be the anwwer to your question?
what wages cuts? German public servant unions ask 6.5% wages increase and because they do not get they will go on strike
As usual, they won’t get that, but rather 4% or so. Like every union on earth, they start with demanding a higher increase in order to have room for bargaining. That’s simply negotiation tactics.
Btw, inflation was at about 2.3% in 2011. So, the real wage increases (the increase of purchasing power) won’t be that big. Imho the unions still don’t have the power to make a big difference – the official unemployment may have gone down, but there’s still high hidden unemployment (low income folks who have to rely on welfare to make a living) and thus the employers still have a strong hand (“if you don’t like that deal, there’s dozens waiting outside who would love that!”). Real change can only come from the political side! Well, maybe after the 2013 elections, we’ll see movement on that field.
As far as I am aware, the Germans had big pressures on their income around the Wiedervereinigung. But Gray must know more about that.
And I really hope the public sector unions will play it hard. Nice to see that idiotic behaviour is universal. And even in Germany the non-productive side of the economy is inflating itself like an all consuming balloon.
I was there at the Wiedervereinigung and can sing a song about the impact on the incomes and the FDP neo-liberal policies.
There was no Wiedervereiterung because Helmut Kohl called it Beitritt to default in 1990 and get rid of the reparations that had to be paid after Wiedervereiterung as dealt out in the Paris treaty.
Yup, Antonis, that’s right, of course the sudden enlargement of labor supply by millions of Eastern Germans seeking better incomes in the West kept the wages down. And even today, 22 years after the reunification, the wages are lower in the East! That’s not really fair, but there’s still high unemployment in the “new” states, and that gives the companies there a stronger leverage in labor negotiations.
Now, of course, after all those meager years, German workers should see a nice increase of their incomes! But it wouldn’t be good if the public sector manages to get a better deal than the private one. I think German officials generally do a productive job (Germany’s administration doesn’t seem to be overblown in relation to the work done), but they aren’t more productive than the folks who work in the industrial sector. Here’s hoping for fair deals for everybody.
Btw, folks, we Germans actually don’t have that money we give to Greece. We have to borrow that ourselves. And pay interests rates for that. So, the “profit” is rather 1.4% (3.4%-2%), of course.
Btw, the market rather demands about 35%:
http://www.tradingeconomics.com/greece/government-bond-yield
nevertheless: 380 million euro are 380 million euro whether with 1% or x% interest rate.
Come on, Greece pays those interest rates with money borrowed from the Germans and other people! It’s not as if any Greek’s tax Euros would be used for that.
and where do our taxes go?
Into the government’s spending, like useless agencies, overstaffed departments, the bailout of ruined banks (like Proton), dead retirees, pensions for people who still work, the paranoid defense budget, and certainly a serious amount is stolen by corrupt officials and politicians, too. Gladly, at least some money is still spend on reasonable expenses, like honest, hardworking officials (there sure must be some) support for the unemployed and pensions for retired folks who really need that money to survive. But it could and should be more.
Fact is, even without the admittedly huge interest payments because fo the monstrous public debt, the Greece government still can’t balance the budget, there’s still a deficit. About 20% of the Troika money cover up the difference, the rest goes to the banks and investors. That means, if Greece defaulted but decided to stay in the Eurozone, there would have to be even harsher austerity! That’s why a return tothe Drachem is the only reasonable solution after a default.
Now, don’t misunderstand me, I’m not writing this because I have any fun whatever with this sad state of affairs. It’s simply the truth. Don’t shoot the piano player…uh… messenger, pls!
we don’t shoot anyone here
Have you taken a look at the site of the Greek Finance Ministry? They don’t publish the Greek budget?
Market demands 1102% (one year maturity). That means the market expects a default. Does anybody really think that this is a good deal for Germany?
Come on keeptalkinggreece, be serious.
If I would be serious, I would have migrated far away and long ago.
Let’s all be serious for a moment….. ok that’s long enough, back to normal now…
*grin*
Here is a German TV-Clip about the real benefits Germans make out of the crisis, something around 60 billions:http://www.wdr.de/tv/monitor/sendungen/2012/0301/griechenland.php5
Assumed I were a person not tooooo reliable in the past regarding financial matters (good at cooking the books etc.): would you really regard giving me your money a good deal – even if you are able to get the money at great conditions (because you have to borrow the money yourself)?
OR: how much of your own money would you give to the state of Greece?
How reliable is a state if not even its population confides in it? Why should taxpayers of other countries trust it?
some can also blame the one who lends money to an untrustworthy borrower. Remember all the banks that were handing out loans and plastic money? It is a failure of the whole system. On the other hand, can we speak of one country without debt? No, we can’t. The easy way is to blame Greece for all disasters of this world, incl Noah’s flood, euro crisis, bad weather, tsunamis, acne on teenagers.
Having lived in Greece for a short period of time I’ve realised that the Greeks indeed are to blame for everything. The talk of the faults in the system, of the politicians, etc overshadows one truth too hard for most Greeks to see: you get the politicians and broadly the society you deserve, and most of you display an antisocial behaviour that doesn’t create a viable society.
Almost everyone I’ve dealt with in this country has been dishonest at best, more commonly outright deceptive. People are so corrupt that they no longer see what normal human behaviour is like.
I tend to believe it’s all a result of thousands of years of emmigration of the best and brightest, leaving the corrupt, idle, and dumb behind. Now with another wave of the best of the country leaving, there may truly be no solution on offer.
what do you do in the blog of an antisocial, corrupt, idle and dumb Greek? Oh, posting your opinion….
Khmm, we can talk about few countries in the EU with only neglible debt. Wait, one is even right next door from Greece!
I used to like this site for timely info about Greek developments. Now I rarely read it, since whoever writes the content clearly has lost objectiveness.
yeap! we’ve lost everything incl objectiveness.
KTG, although I believe that “Local Observer” is a bit harsh, what I truly believe is that Greek people on a whole are contemptous and abrupt in general and for foreigners (especially Brits/Americans) this behavior is perceived as being rude.
So, if a foreign person is treated rudely over and over and over again, they will be come negative against the Greeks and start to have a chip on their shoulder.
So, I believe someone else has mentioned this before, but, if Greek people could try just treating each other and foreigners nice until the other person did something to deserve rude treament that would be optiumum. I’m not against being rude to someone who treats me bad, but I certainly do not act rude to people without a reason, and this I know happens in Greece.
@Local Observer: Please don’t generalize because not all Greeks are like that, and what’s even better, is if you try and keep trying with those Greeks who are initially rude, they will eventually come around. I’ve proved it over and over and now some of the rudest Greeks I’ve met initially are now friends!! Just try to keep being nice and non-judgemental and you’ll have a better time in Greece.
sure many Greeks are rude and get on my nerves since quite a long time. But. when foreigner firends come here, they’re firstly shocked thinking that we’re always argue and are hostile to each other. whereas we just speak quick and loud.
Yes, this is true too. I even do that too now, talk with my hands etc…
lol When I returned to Greece, I had to (re)learn and raise my voice because people would not hear what I was saying. It’s a land of deaf, I’m afraid.