Jun 2, 2012

“You send the money, you call it a ‘loan’ — you get it back and call it an ‘interest rate' ”

An interesting article published in the New York Times, stating the obvious: Most aid to Athens circles back to Europe.

This is a pretty good explanation on why the popular argument that Greece has received the biggest bailout program in history and should have got its act together by now is ignorant. The truth is, the average Greek and the Greek state don't even see most of this money given as "aid"; it all aids the pay of interest rates on the loans originally got! (and let's not start on how the original loans were scheduled with false fiscal numbers which were allegedly "cooked" by Goldman Sachs)

"As they pay themselves, though, the troika members are also withholding other funds intended to keep the Greek government in operationLast week, the Athens office that tracks revenue said Greece could run out of money by July. If so, Greece could default on its debts — except those due to the central bank, the monetary fund and the European Union.
“Greece will not default on the troika because the troika is paying themselves,” said Thomas Mayer, a senior adviser at Deutsche Bank in Frankfurt.
In an elaborate payment system that began after the May 6 election that brought down the Greek government and is meant to ensure that the Greeks do not touch the cash, the big three creditors are now wiring bailout payments to an escrow account in Greece. There the money sits for two or three days — before much of it is sent back to the troika as interest payments on the Greek bonds that Europe accepted under terms of the bailout deal struck in February. About three-quarters of Greece’s debt, or $229 billion, is now effectively owned by one of the three troika members, according to estimates by the investment bank UBS."

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