Our not-so-brilliant Eurozone finance ministers have announced a “Great Deal” with Greece that will keep Greece in heavy indebtedness for one more decade.
It is a deal that will not solve the simple problem that they have too much debt.
This new great deal just means that €96 billion of our loans to them- 40% of Greece’s debt – will only be repaid starting in 2033.
The “deal” means that Greece’s has more cash reserves to sustain it over the months to come. The ministers also claimed that this deal allows Athens can now return to the markets to finance spending. In other words, they can borrow even more to pay for their high budget deficits… That statement is about as irresponsible as you can get. This is just the worse type of window dressing and pure procrastination.
Greek cannot possibly repay these loans – their total debt is some 175% of the GDP, which is completely unsustainable.
German, British, French and Spanish banks were the biggest lenders to the Greeks and they had the audacity to demand in 2010 and 2011 that all the Eurozone members should support the Greeks with bailout funding that basically went to these banks.
There was absolutely no reason to include Finland in this group – we have very little business with Greece and our banks had no outstanding loans to the Greeks.
Finland was foolish enough to agree to lend €1 billion to the Greeks. Our government leaders claimed that such a loan was a “Great Deal”. These were the words of the then Finance Minister, and later Prime Minister. He is now a Commissioner in the EU and his name is Jyrkki Katainen.
He now occupies the post of “Commission Vice-President for Jobs, Growth, Investment and Competitiveness” and we must suppose that this means he is also hard at work along with his colleagues, Junker and Tusk making announcements that contain hardly any crumbs of truth.
The only way to deal with Greece is to for the big countries to forgive 50% of their debts to Greece and then let the Greeks sort out their lives in peace.