Courtesy of Mish.
For those still wondering why the global economy is struggling, the simple answer is “It’s the debt, stupid.”
We will return to the global economy in a moment, but first consider the plight of Greece.
A detailed study shows that of €215.9 billion in Greek aid, only €9.7 billion went to Greece. The rest went to banks and other creditors.
Greece still has to pay back the rest, and is struggling to do so.
Bailouts for Banks, Not Greeks
With insiders warning that Athens may soon be in need of more aid, a new study finds that the Greek bailouts so far have benefited European banks, not the Greek people.
Please consider Study: Bailouts for Banks, Not Greeks
After six years of ongoing bailouts amounting to more than €220 billion, or $253 billion in loans, Greece just cannot get out of crisis mode.
It is tempting to blame those who refused to reform the country’s pensions and labor markets for the latest calamity. But a study by the European School of Management and Technology, a copy of which Handelsblatt has obtained exclusively, gives another perspective. 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.
This accusation has been around for a long time. But now, for the first time, the Berlin-based ESMT has compiled a detailed calculation over 24 pages. Their economists looked at every individual loan instalment and examined where the money from the first two aid packages, amounting to €215.9 billion, actually went. Researchers found that only €9.7 billion, or less than 5 percent of the total, ended up in the Greek state budget, where it could benefit citizens directly. The rest was used to service old debts and interest payments.
Generosity Explained
