Germany Made $110b Profit on Greek Crisis
World Economy

Germany Made $110b Profit on Greek Crisis

Greece’s biggest creditor Germany has made a huge profit on the country’s debt crisis over the last 5 years as it saved through lower interest payments on funds borrowed amid investor "flights to safety."
Each time investors got bad news about Greece, they rushed to the ‘safe haven’ of Germany, with the interest rates on German government bonds falling, according to the study from the private, non-profit Leibniz Institute of Economic Research, AFP reported.
The estimated €100 billion ($110 billion) Germany had saved since 2010 accounted for over three percent of its GDP, the report said.
"These savings exceed the costs of the crisis–even if Greece were to default on its entire debt," the study said.
The bonds of countries such as the United States, France and the Netherlands had benefited "to a much smaller extent."
German Finance Minister Wolfgang Schaeuble, who has always been against writing off the Greek debt, pointed to his own government's balanced budget.
The balanced budget, however, was possible mainly as a result of Germany's interest savings through the Greek crisis, the study claimed.
Schauble has repeatedly said the Greek debt of €316 billion cannot be restructured within the eurozone. He claimed Grexit (Greece’s exit from the Eurozone) might be a solution for the country’s debt ‘haircut.’
While Greek and EU officials say Athens and the creditors are close to the final agreement on the third €86 billion rescue, Berlin continues hindering the process.
Last week, the creditors urged for more reforms from Athens, arguing that another two- or three-week bridging loan was better than hurriedly striking a three-year deal.
Germany’s proposed option of a €5 billion bridging loan to give negotiators more time is still on the table.
The multibillion deal is expected to be reached by the August 20 deadline, when Greece has a €3.2 billion debt repayment due to the European Central Bank.

Short URL : http://goo.gl/iVmvjM

You can also read ...

Russia Economic Recovery Underway
Retail sales in Russia picked up in April, while real wages...
Peru Economy Strengthens
Economic growth in Peru strengthened in the first quarter...
Greece at Crucial Point
Discussions are heating up over future debt repayments for...
Brazil CB Keeps Rates on Hold
Brazil’s central bank considered cutting interest rates last...
EU Tells Italy to Cut Debt, Warns of Euro Spillover
Italy’s incoming government should aim to cut its heavy public...
While China tries to alleviate its demographic crunch, the aging society means a pension shortfall.
Forget that image of sweatshops making all kinds of cheap...
Saudi Gov’t Told Not to Boost Spending
The International Monetary Fund urged the Saudi government not...
Eurozone inflation slowed to 1.2% in April moving further away from the ECB’s 2% target ceiling.
Eurozone economic growth slowed much more sharply than...