Germany Wins Again

On the Greece deal.
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Something like this.

English soccer star Gary Lineker once famously said of his sport that it was a “simple game: 22 men chase a ball for 90 minutes and at the end, the Germans win.” In this way, existential European debt negotiations have a lot in common with the beautiful game. For months and years, hundreds of people bicker and argue and recriminate over bailout terms, and at the end, the Germans win. And then win again.

The most obvious examples are the recent Greek capitulation and today’s third bailout deal, which look very much like they were written in Berlin and then translated for everyone else to sign. But, as it turns out, despite what their media and politicians had led them to believe, the Germans were winning all along.

“Germany benefited substantially from the Greek crisis. The balanced budget in Germany is largely the result of lower interest payments due to the European debt crisis,” IWH said Monday.

“The debt crisis resulted in a reduction in German bund rates of about 300 basis points, yielding interest savings of more than €100 billion ($110 billion) or more than 3% of gross domestic product during the period 2010 to 2015,” it said. A basis point is one-hundredth of a percentage point….

“When discussing the costs to the German taxpayer of saving Greece, these benefits should not be overlooked, as they tend to be larger than the expenses, even in a scenario where Greece does not repay any of its debts,” IWH said.

For Germany, a Profit From Greek Drama? [WSJ]
Greece Says It Has Reached a Deal for a Third Bailout [NYT]

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