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ORIGINAL FRENCH ARTICLE: Quand la crise de la dette grecque renfloue l’Allemagne

by Cathy Ceïbe avec Ferdinand Moeck

When the Greek debt crisis fills German coffers

Translated Sunday 20 September 2015, by Adrian Jordan

According to a report by the Leibniz Institute for Economic Research, Berlin has made nearly 100 billion euros of budgetary savings since 2010 and profits from Athens’ privations.

In Germany, the news does not seem that disconcerting. Again on Monday, Chancellor Angela Merkel’s spokesperson, Steffen Seibert, expressed that “thoroughness comes before rapidity” in regard to conditions imposed upon Greece for it receive the first part of the third financial package, which is aid in name only. The spokesperson for uncompromising German finance minister, Wolfgang Schäuble, went out of step in stating that the nth sacrifice must be made to submit to Athens “An ambitious budgetary and financial plan, a credible strategy of privatisation and tenable pension reforms”. All in all, strong words.

Shares in the German debt were a safe haven

However, the German government should undoubtedly moderate its tone. According to a report by the Leibnitz Institute for Economic Research (IWH) published on Monday, the Greek debt crisis will have allowed Germany to make budgetary savings in the order of 100 billion euros since 2010. The economists remind us that shares in the German debt were a safe haven for foreign investors, who were able to enjoy a drop in interest on these loans. “Artificial rates were set on German bonds which, on average between 2010 and now, were 3 percent higher than they should have been in reality”, reckon the experts. They implacably continue to hammer home: “These savings are greater than the risk the crisis creates even should the Greeks fail to repay the debt in its entirety.” Keep in mind the following: Berlin agreed a loan of 90 billion euros to Athens in recent years, this being a capital gain of 10 billion euros. “Germany has therefore profited from the Greek crisis whatever the case”, they conclude, estimating that the saving corresponds to 3 percent of GDP. “Bad news in Greece was good news in Germany and vice versa”, affirmed the experts. Some criticism has been advanced, notably that which points out that the Greek crisis led to a fall in investment and other negative effects for German workers. “Savers are more greatly affected, comparative calculations must be made”, stated Lars Feld, member of the governmental German Council of Economic Experts, in the Frankfurter Allgemeine Zeitung newspaper.

The city of Frankfurt is a winner when it comes to privatisation

Apart from the results given in this study on interest rates, Germany also wins when it comes to privatisation of Greek services and companies. In 2011, the Hellenic Republic Asset Development Fund (TAIPED), was given responsibility for these “liberalisations”, the most important of these still being the granting of concessions for the 40 regional airports, for 1.2 billion euros, to German company Fraport, which together with a Greek company, has to pay 22.9 million in tax annually. The two principle shareholders of this said venture are the Hesse region (30 percent) and the city of Frankfurt (20 percent). The rewards could prove to be very juicy since they are based on the most profitable airports in the country, amongst which figure the holiday isles of Mykonos, Santorini, Corfu...

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