While Greece’s crushing economic crisis has hurt many people – those suffering pay cuts, tax hikes, slashed pensions and who have lost their savings by investing in Greece – it’s made a lot of money for some speculators, the European Central Bank, as well as German banks.
Eurozone finance ministers, who didn’t sign off on the loan at a meeting earlier in the week are set to convene again in Brussels on Nov. 26 to decide whether to authorize disbursement as Samaras prods them to act. But that could require yet another scheme to extend the repayment period and meet fiscal targets which could require a bridge loan of up to $40 billion to cover a financial gap.
Germany, for example, has lent Athens 35 billion euros ($45.4 billion) but that hasn’t slowed Greece’s slide and the lenders may have to write down their investments as much as 50 percent, similar to the losses imposed on private investors by a previous administration in Greece, although IMF chief Christine Lagarde isn’t keen on doing the same.
Through the IMF, developed countries are pouring money into the EU bailouts, forcing the agency to raise an extra $400 million in capital earlier this year. British Prime Minister David Cameron promised there would be profits on the contributions, on the grounds the IMF had made a return on past rescue programs, but this time that could turn into losses.
At that point, leaders in Germany and France, and indeed in the U.K., the United States as well as other countries, such as South Korea and Australia, will have to explain that taxpayer’s money is keeping Greece afloat, and keeping it in the Eurozone and find some way to justify the decision, such as keeping the euro intact to prevent ramifications to world markets.
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