Quelle surprise: most of the Greek bailout money went to the banks
06 May 2016 12:51 pm
So Greece received something like 128 billion Euros in all those bailouts.
But a new study by the European School of Management and Technology (ESMT).has found that most of the money went to the banks.
"Most of the money was used to actually transfer risks from private creditors to public creditors," EMST Jorg Rocholl told Deutsche Welle. "This means money was used to repay the private creditors by taking on more debts that were taken by private creditors."
Less than 10 billion euros from Greece's first two international bailouts ended up in the hands of the Greek treasury.
The study revealed that less than 5 per cent of the overall funds went to the Greek fiscal budget, with the overwhelming rest going to existing creditors in the form of debt repayments and interest payments. So 95 per cent went to saving European banks.
“The aid programs were badly designed by Greece’s lenders, the European Central Bank, the Europe Union and the International Monetary Fund. Their priority, the report says, was to save not the Greek people, but its banks and private creditors.” according to the German business newspaper Handelsblatt
All this is consistent with the claims made by economists including Nobel Prize-winner Joseph Stiglitz and former Greek finance minister for the anti-austerity Syriza party, Yanis Varoufakis.
As Stiglitz says, almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems.
So the system was basically designed to screw Greece.