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- Germany risks being taken for the Greek bailout with billions of euros in liability.
- The euro rescue fund ESM plays in the new financing package for Greece a crucial role.
At the beginning of each new bailout in Europe there is a number. When now planned rescue package for Greece it is 86 billion euros. So Much Money Does Greece to remain in the euro can
It was during the financial crisis many times those numbers -. And to this day no one knows quite what they may mean the end for the individual. After all, unlike the so-called solidarity contribution, which will be forfeited a quarter of a century after the reunification of the income of each employee, the state does not prosecuted citizens for the time being for the salvation of the debtor countries. How much should be? After all, Germany is not paying for now, but vouches primarily for the repayment of loans.
It will initially be reflected in the new rescue package for Greece, for the European Stability Mechanism ESM to be tapped. But how much is deploying the 86 billion euros at the end of the ESM, is unclear.
Good € 16 billion could come from the International Monetary Fund, more money will bring the planned privatizations.
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40 to 50 billion euros from the ESM
And if the investor confidence in Greece again, Athens could also record directly in the capital market loan. For the time being this way remains the Greeks, however, barred. The already reflected in the current high returns contrary, investors want to currently have for Greek government securities: Currently these are for two-year bonds in the country at 27 percent, for papers with ten-year term with 12 percent. With interest rates at this level there is no state budget can finance
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(Video: Reuters Photo: AFP , photo: AFP)What is now to be calculated? In Brussels it is said of EU circles that the ESM at the end probably should provide 40 to 50 billion euros. Basically works the ESM as a bank: If a country needs money, the fund issues bonds that are purchased in the financial markets, for example by large institutional investors. Even if the ESM forwards the money to Greece, investors keep the papers for sure, because the euro zone countries vouch for the bonds. The bonds of the ESM are even sought after in such a way that investors in recent months, partly slightly negative interest in buying took – just to get their money in ESM bonds to invest. Negative interest rates means that the investors end up getting less money back than they have invested initially
Currently already are the returns for ESM papers but back in positive territory – depending on maturity from 0.4 to 0. 8 percent. The ESM so can still borrow money for very low interest rates.
With 14 billion euros in the liability
If the ESM actually make 50 billion euros available to the Federal Republic of dignity a total of 13.5 billion euros liable because Germany holds a share of 27 percent of the stabilization mechanism. In fact, this figure is currently slightly higher as Greece and possibly also due to lack of capital Cyprus can not be held liable. Including the shares of both countries from the ESM out of the German share is 27.8 percent, the liability amount would then be just under 14 billion euros.
After Germany the largest share of ESM France maintains with good 20 percent. This is followed by Italy with 18 percent and Spain with just under 12 percent. Overall, the ESM has a volume of around 700 billion euros, of which, however, only a small portion – 80 billion euros – was in fact paid by the Member countries. Of the 700 billion euros of the ESM is allowed to use 500 billion euros for financing. As the ESM has been taken only with 50 billion euros to complete, it is expected to lift the new rescue package for Greece effortlessly
Greece is not all
14 billion euros -. Is the Now everything? No. Germany is liable under the proposed bailout package beyond this sum, because the IMF provides loans. In contrast to the ESM, in which only the euro members have an obligation to adhere to the IMF now 185 member countries. The German share is because at 5.81 percent. Should the IMF as expected make 16 billion euros available, Germany is responsible for over 900 million euros.
Overall, Germany would have to this very simplified calculation just are necessary for nearly 15 billion euros.
In this sum of course, not the crisis loans from previous years included, for Germany are also liable. According to a statement of Munich-based Ifo Institute for Greece should come alone 72 billion euros, for the other euro countries Cyprus, Spain, Portugal and Ireland, there are an additional 42 billion euros. Also in the country risk is in accordance with the Ifo lineup for the purchases of government bonds by the central banks, which beat again with 35 billion euros. Added together, then the risk for Germany is 164 billion euros
True costs are unclear
And that is still not enough. The Ifo Institute supplemented in such lineups like to the sums of the so-called Target balances arising from cross-border credit transfers in the euro zone. They are, according to Ifo at 230 billion euros. But experts are divided on how high the risk of the Target balances actually is.
It is also unclear whether the Greek central bank can repay per the emergency loans from the ELA program, with which the ECB is the Money supply in Greece backs. ELA stands for Emergency Liquidity Assistance. The loans from this program now add up to almost 90 billion euros, is responsible for the formal alone the Greek central bank
Whatever., The many figures that Germany incurring high risks. But do not show the true cost. Ever is not clear whether the will may be estimated depending reasonable. Yes, it is not even certain whether Germany is really losing money on balance in the rescue
This is why:. At the beginning of a bailout are big numbers. But what they have at the end of consequences, currently is able to say no. Maybe so will remain little left of all the excitement at the end.
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