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Study: Greek Crisis Benefited Germany More than 100 Billion Euros

greece_germany_euA new study by a German think tank revealed that Germany has gained more than 100 billion euros since 2010 due to the Greek crisis.
“The debt crisis resulted in a reduction in German bund rates of about 300 basis points (BP), yielding interest savings of more than 100 billion euros (or more than 3% of gross domestic product, GDP) during the 2010 to 2015 period. A significant part of this reduction is directly attributable to the Greek crisis,” a study by The Halle Institute of Economic Research, which is part of the Leibniz association, concluded.
The institute, which is a private non-profit think tank, explained in its study that this money was made from the lower interest rates on Germany’s borrowing that resulted from investors’ turn to stable countries, especially Germany, due to the crisis.
“Any time there was bad news about Greece, yields on German government bonds fell, and any time there was good news about Greece, German government bond yields rose,” the study found.
The study further argued that Germany will contribute 90 billion euros at most to the currently negotiated bailout package. Thus, if Greece is unable to pay back its money, Germany has still benefited.
“Even if Greece indeed does not repay any of its loans, Germany comes out ahead,” the institute stated. “If Greece does pay or pays at least in part, the savings are substantial.”

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