Germany made more than €1bn out of Greek crisis

Germany is resisting calls to cut the Greek debt. [Fredrik Rubensson/Flickr]

Between its loans to Athens and its debt buying programmes, Germany has cashed in to the tune of €1.34bn since the beginning of the Greek crisis. EURACTIV’s partner La Tribune reports.

Germany’s finance ministry has published details of the profits it has made on loans to Greece: €1.34bn since 2009, according to reports by German daily Süddeutsche Zeitung.

A dig into the detail revealed that the German development bank KfW has taken some €393m in interest payments on a loan of €15.2bn that it made to Athens in 2010. Between 2010 and 2012, a state debt-buying scheme by the eurozone’s central banks brought the Bundesbank a profit of €952m.

The other eurozone members had agreed to hand any profits back to the Greek central bank. But the pay-back operation was brought to a halt in 2015 for political reasons, according to French paper Les Echos, particularly because of tensions between Alexis Tsipras’ freshly elected government and the Troika.

In displaying its good will at implementing the reforms and austerity measures demanded by its creditors, Athens had hoped to encourage its EU partners to start this money flowing again.

No debt relief for Greece

Despite the efforts of the Greek government to satisfy the demands of its creditors, notably by running a budget surplus above and beyond its objectives and by adopting ever more austerity measures, Berlin still refuses to soften its approach.

Tsipras’ government has been calling for debt relief in order to restore confidence with a view to a return to the debt markets. After eight years of crippling austerity, economic growth is refusing to take off in Greece.

The IMF recognised this fact and even said it would only contribute to the next tranche of aid if the Greek debt is cut.

But faced with the categorical refusal of German Finance Minister Wolfgang Schäuble, the Fund was forced to back down.

Without its latest injection of cash, Greece would have defaulted on a loan repayment due in July. The Fund does not want to increase its participation until the other EU countries are ready to make concessions.