ZCZC
BCN-22
EU-EUROZONE-GREECE-GERMANY-ECONOMY-DEBT
Germany pockets 2.9 bn euros from Greece bailouts
FRANKFURT AM MAIN, June 22, 2018 (BSS/AFP) – Germany has earned some 2.9
billion euros ($3.5 billion) since 2010 on Greek debt bought to help the
struggling country, a government report seen by AFP showed Thursday.
“Contrary to all the rightwing myths, Germany profited massively from the
crisis in Greece,” said Sven-Christian Kindler, a Greens party MP whose
question to the finance ministry uncovered the figure.
“It cannot be the case that the federal government is cleaning up the
German budget with billions of interest earnings from Greece,” he added.
The finance ministry document shows the Bundesbank (German central bank)
had by the end of last year earned 3.4 billion euros of interest on Greek
bonds it bought in 2010-11.
Officials at the Frankfurt institution bought Greek debt under a scheme
known as the Securities Markets Programme, created by the European Central
Bank (ECB) to calm financial markets in troubled eurozone economies.
At a February 2012 Eurogroup meeting, eurozone finance ministers agreed
that interest on those bonds should be paid back to Athens via the single
currency area’s crisis firefighter, the European Stability Mechanism (ESM).
The Bundesbank duly sent 527 million euros to Greece in 2013.
– Debt relief tussle –
But a 2014 tranche of 387 million euros was held by the ESM, part of a 1.8
billion-euro total earmarked to cover some Greek debt payments in exchange
for the government pressing ahead with reforms demanded by its creditors.
That reciprocal arrangement ended in June 2015, when the Eurogroup
suspended the transfers during a standoff with Greek Prime Minister Alexis
Tsipras.
Taking all the twists and turns into account, Germany’s federal government
has raked in 2.5 billion euros of profit on Greek debt, while public
investment bank KfW has notched up 400 million euros of interest payments on
a loan to Athens — a total of 2.9 billion euros.
Eurogroup ministers will meet Thursday for talks on finally ending the
Greek bailout saga, nine years after the country stunned the world with out-
of-control debts and set the scene for three bailouts and a near collapse of
the euro single currency.
If agreement is reached, the 86-billion-euro third programme sealed in
2015 would expire in August, bringing the level of assistance received by
Athens to 273 billion euros since 2010.
Greece “has fulfilled its obligations, and now the Eurogroup must keep its
promises,” MP Kindler said, calling for “substantial debt relief” for the
troubled Mediterranean nation.
Hardliners like Germany, the Netherlands and other northern European
countries are wary of more debt relief for Greece, while France, the ECB and
the International Monetary Fund favour reducing its burden.
Finance ministers have discussed resuming transfers of their interest
earnings on Greek bonds to Athens, although backdated only as far as 2017.
BSS/AFP/HR/1035