There seems to be some discrepancy between the current and older data released by the German Finance Ministry regarding the profits it makes from the bailout loans to Greece. While the German Finance Ministry claims nowadays that the profits from Greek interest were “€360 million from 2010-2014“, according to older media reports based on data from the same Ministry the interest paid by Greece to Germany was “€380 million by end of 2011” – that is in the first year and thus from the first bailout only.
German Finance Ministry: 2015 and 2012
“Since the first bailout package in 2010, Germany has collected a total of €360 million,” the German Finance Ministry said as quoted by German daily Rheinische Post on Thursday. The German daily has been quoting a 40-page answer of the Ministry to a questionnaire submitted by the Die-Linke party.
“In the time period form 2010 to 2014, the KfW* has paid out around 360 million euro in revenues to the German government,” adding that “in the coming years the federal government is expecting around 20 million euro per year on interest revenues.”
However, I remembered a press article from March 6th 2012, according to which the German Finance Ministry had had earn €380 million and thus from the first Greek bailout alone.
“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)
The Reuters report was also quoted by German media, like the DIE ZEIT. I don’t remember that the Reuters report was dismissed by the German finance Ministry.
Ministry’s data on Greece
In its response to Die Linke, the German Finance Ministry documents among others the economic shrinking process in Greece in recent years with a plethora of data. Some excerpts published by the Rheinische Post that has obtained the Ministry’s document:
“The volume of non-performing loans between 2012 and 2014 had increased from 46 to 78 billion euros.
The debt increased from €301 billion 9126.8% of GDP) in 2009 to €318 billion (176.3% of GDP) in 2014.”
But what is most striking is that the German Finance Ministry sees “a disorderly sovereign default” as the alternative to the bailout adjustment program.
“The alternative to an adjustment program would be a disorderly sovereign default in Greece, resulting in considerably grave adjustment costs.“
Die Linke-MP Andrej Hunko evaluated this as a sign that the crisis management of the EU policy has “failed across the board and requires
requires fundamental reorientation.”
In a article MP Andrej Hunko commented:
“The response from the federal government clearly shows how the austerity-aiming Troika–policy in Greece has caused recession and poverty, without improving anything in the financial situation of the country.”
We can certainly say that the strict austerity policy does not work. But can we say that the German Finance Ministry tells the truth about its profit from the Greek loans?
Tips & Documents to [email protected] are much appreciated 🙂
*KfW, formerly KfW Bankengruppe, is a German government-owned development bank.