Great Britain

EU crisis: How much money 'German banks REALLY earned from Greek debt crisis'

The EU is taking unprecedented action to help its members endure the massive economic shock of the coronavirus pandemic. However, some nations are resisting the idea of shared borrowing to cover the heavy costs, suggesting that even during this crisis there are limits to solidarity in a bloc that is trying to reaffirm itself after Brexit. The EU’s executive has temporarily set aside its strict rules on spending to give governments the leeway they need to keep their economies afloat.

However, that is not going to be enough, as it will leave the most affected countries, such as Italy, managing their own worsened finances once the crisis has ended.

National governments have so far stopped short of bigger action involving breaking a longstanding taboo: joint borrowing among countries that share the euro currency.

Leaders are expected to discuss the question in a teleconferenced summit today, but Germany and the Netherlands are adamantly opposed to pooling risk across the continent.

Holger Schmieding, the chief economist at Berenberg bank, said: “To which extent Europeans help each other in this acute emergency can shape popular perceptions of what Europe stands for – and for a long time to come."

ctp_video, eurozone, eurozone news, euro news, Germany, Germany news, European Union, eu news, Angela Merkel, Angela Merkel, angela Merkel news,

Revealed: How much money 'German banks really earned from Greek debt crisis' (Image: GETTY)

ctp_video, eurozone, eurozone news, euro news, Germany, Germany news, European Union, eu news, Angela Merkel, Angela Merkel, angela Merkel news,

German Chancellor Angela Merkel (Image: GETTY)

As the crisis deepens, unearthed reports reveal how Germany, a leading nation in the Greek bailouts, has earned huge sums in interest payments since the financial crisis.

In 2010, eurozone countries bought €210billion of government paper, including Greek bonds, in order to provide greater liquidity to the EU's banks as the Greek debt crisis unfolded.

According to figures obtained from Angela Merkel's government by Germany’s Green Party in 2018, Germany received €2.9billion (£2.5billion) in interest payments on Greek bonds that were bought through a now-defunct bond-buying programme.

Germany also received a total of €400million (£341million) on a loan from the KfW Development Bank.

The original agreement between Berlin and Athens was for any interest earned on the bonds to be paid back to Greece when it fulfilled its reform obligations.

ctp_video, eurozone, eurozone news, euro news, Germany, Germany news, European Union, eu news, Angela Merkel, Angela Merkel, angela Merkel news,

Eurozone (Image: GETTY)

ctp_video, eurozone, eurozone news, euro news, Germany, Germany news, European Union, eu news, Angela Merkel, Angela Merkel, angela Merkel news, ctp_v

On the sidelines of a voting on new austerity measures in Greece in 2017 (Image: GETTY)

However, Germany repaid €527million (£449million) of interest payments to Athens in 2013 and €387million (£330million) in 2014.

After Greece’s second bailout programme was agreed in 2015, those repayments stopped, and Berlin accumulated the ongoing interest.

Therefore, Germany is reportedly €2.5billion (£2.1billion) in profit, plus interest of €400million (£341million) on a loan from the KfW development bank.

Sven-Christian Kindler, a Green MP, said in 2018 that Germany had “massively profited from the crisis in Greece”.

He said: “It cannot be the case that the German government consolidates the German budget with billions in Greek interest profits.

DON'T MISS:
Coronavirus: Italy doctor explains why London WILL be worst-hit area [EXCLUSIVE]
Labour humiliation: McDonnell's coup against Corbyn exposed [INSIGHT]
Dominic Cummings unmasked: Vote Leave insider lifts lid on Brexit guru [ANALYSIS]

ctp_video, eurozone, eurozone news, euro news, Germany, Germany news, European Union, eu news, Angela Merkel, Angela Merkel, angela Merkel news, ctp_v

Sven-Christian Kindler, a Green MP (Image: GETTY)

“Greece needs air to breath and room for manoeuvre for investments and fighting poverty in the country."

Not long after the German government released the figures, eurozone countries agreed to the long-awaited debt relief deal for Athens in June 2018.

The deal gave Athens more time to repay the loans and extended a grace period during which no interest would be taken.

EU Economic Affairs Commissioner Pierre Moscovici said at the time that the agreement meant "the Greek crisis ends here".

Greece successfully exited the bailouts on August 20, 2018.

Football news:

There is a real chance that 50-60 clubs will go bankrupt. The owner of Huddersfield about the consequences of the pandemic
Valverde about the game with Manchester City: we Want to play so that we can go further. Real is ready to do anything for this
Great selection from Roma: KAFU opens up in the box and waits for a pass, but instead Totti and Batistuta score masterpieces
Sabitzer has been exposed to coronavirus in April
In the 90s, the Russian club played in the Finnish championship: the players carried cigarettes, the President went on the field. It ended because of the default
Flick about Holand: it is the first season, so it is too early to compare it with Levandovsky
Felix sprained a knee ligament in training. This is his 3rd injury of the season at Atletico