Even if Greece defaults on the entirety of its debt, Germany would still benefit.
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Reports that Germany has benefited from the ongoing Greek crisis by over $100 billion need further detailed consideration, a representative of the Ifo Institute for Economic Research told Sputnik on Tuesday.
Investors have fled instability in the euro zone for the safety of German bonds since 2010, pushing down interest rates on those bonds.
“The balanced budget in Germany is largely the result of lower interest payments due to the European debt crisis”, it said, “a significant part of this reduction is directly attributable to the Greek crisis”. During the financial crisis, German Chancellor Angela Merkel pressed her neighbors to follow Germany’s austerity example of raising taxes, and reducing borrowing and spending. As Greece has appealed for debt relief in the form of principal writedowns or restructuring, hardline officials like German Finance Minister Wolfgang Schäuble have argued that such a move would come at the expense of German taxpayers.
Government bonds in other countries – including France, the United States and the Netherlands – have also benefited in the same way from the crisis, the report suggested, but on a smaller scale.
Germany, the biggest contributor to the 240-billion-euro bailouts to Greece since 2010, was reluctant to offer its southern European neighbor a third relief worth up to 86 billion euros, fearing of throwing more taxpayers’ money to a “bottomless pit”.
“Even if Greece doesn’t pay back a single cent, the German public purse has benefited financially from the crisis”, said the institute.
They aim for a deal before the debt-ridden country must repay 3.4 billion euros to the European Central Bank on August 20.
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“A quick conclusion to the negotiations would of course be desirable but we must not forget that we are discussing a three-year programme, in other words a programme with a wide-ranging list of reforms”, government spokesman Steffen Seibert told reporters.
