Greek bailouts just pay interest on debt?

[Anna B]

It seems that most of the Greek bailouts go to servicing the interest on the debt it already has, which then grows exponentialy.

Very little of it goes to actually helping the Greek people or improving the overall situation.

 

What's the point of that?

 

I understand the German's are doing very nicely from the interest thanks.

 

Can someone explain please?

[tzijlstra]

It seems that most of the Greek bailouts go to servicing the interest on the debt it already has, which then grows exponentialy.

Very little of it goes to actually helping the Greek people or improving the overall situation.

 

What's the point of that?

 

I understand the German's are doing very nicely from the interest thanks.

 

Can someone explain please?

 

First point: What makes you think the Germans are doing very nicely from the interest? The Greeks pay less interest than many other nations (For example Ireland, Spain, Portugal and Italy) and only just a bit more than what Germany does. Not only that, the Germans aren't the only ones putting money into the bail-out, all Eurozone countries have contributed.

 

Second point: The debt isn't actually rising dramatically as a percentage of the GDP, it is staying relatively stable. The bail-outs replace other (earlier) packages and in fact are designed to bring the interest down.

 

Third point: Want to help the Greeks? Go on holiday there this year, have you booked yet? There is no point in the rest of the Eurozone funding massive benefit-increases for the Greek people, it will just keep their economy unbalanced.

[Anna B]

First point: What makes you think the Germans are doing very nicely from the interest? The Greeks pay less interest than many other nations (For example Ireland, Spain, Portugal and Italy) and only just a bit more than what Germany does. Not only that, the Germans aren't the only ones putting money into the bail-out, all Eurozone countries have contributed.

 

Second point: The debt isn't actually rising dramatically as a percentage of the GDP, it is staying relatively stable. The bail-outs replace other (earlier) packages and in fact are designed to bring the interest down.

 

Third point: Want to help the Greeks? Go on holiday there this year, have you booked yet? There is no point in the rest of the Eurozone funding massive benefit-increases for the Greek people, it will just keep their economy unbalanced.

 

I love Greece and the Greeks and would happily go there for a holiday if I could, especially if it could help at all, but for reasons I've put in another thread, I'm sadly not in a position to go abroad for a while.

 

However I do have a friend who's just come back, and she says the situation is dire, with beggers and homeless people everywhere. The hotel was feeding them leftovers from the kitchen at the back door. This is Europe in the 21st century?

[Cyclone]

It seems that most of the Greek bailouts go to servicing the interest on the debt it already has, which then grows exponentialy.

Very little of it goes to actually helping the Greek people or improving the overall situation.

 

What's the point of that?

 

I understand the German's are doing very nicely from the interest thanks.

 

Can someone explain please?

 

They owe the interest, that's how borrowing huge sums of money works... They need to get themselves into a position to start paying back the capital, or they should never have borrowed it in the first place, but to not borrow it they would have had to actually collect taxes and not take the p*ss with their entire economy.

[Anna B]

First point: What makes you think the Germans are doing very nicely from the interest? The Greeks pay less interest than many other nations (For example Ireland, Spain, Portugal and Italy) and only just a bit more than what Germany does. Not only that, the Germans aren't the only ones putting money into the bail-out, all Eurozone countries have contributed.

 

Second point: The debt isn't actually rising dramatically as a percentage of the GDP, it is staying relatively stable. The bail-outs replace other (earlier) packages and in fact are designed to bring the interest down.

 

Third point: Want to help the Greeks? Go on holiday there this year, have you booked yet? There is no point in the rest of the Eurozone funding massive benefit-increases for the Greek people, it will just keep their economy unbalanced.

 

I love Greece and the Greeks and would happily go there for a holiday if I could, especially if it could help at all, but for reasons I've put in another thread, I'm sadly not in a position to go abroad for a while.

 

However I do have a friend who's just come back, and she says the situation is dire, with beggers and homeless people everywhere. The hotel was feeding them leftovers from the kitchen at the back door. This is Europe in the 21st century?

 

The German interest thing was something that was mentioned in passing in one of the financial papers. On a purely personal opinion level surely the way to get out of debt isn't to add to it. I also heard that Greece would be running a surplus if it wasn't for paying debt interest.

[geared]

I understand the German's are doing very nicely from the interest thanks.

 

Can someone explain please?

 

That piece in the news was specifically relating to Germany borrowing money.

German government bonds are very much in demand at the moment, because other EU countries are looking abit dodgy.

 

This pushes the interest rate on the German bonds right down, so the benefit for them is they can borrow plenty of money at very low interest rates.

 

Don't forget that much of the Greek debt was lent on very low interest rates as well, much lower than they could have obtained without the help from Germany.

 

---------- Post added 14-08-2015 at 15:34 ----------

 

I also heard that Greece would be running a surplus if it wasn't for paying debt interest.

 

Thats the most stupid thing ever, it's like saying "Greece wouldn't be in this mess in the first place, if they hadn't borrowed all that money"

 

They're not straddled with all that debt because we think it's a good laugh to watch the Greeks hop about like angry little elves.

They're straddled with all that debt because they ran their country into the ground.

 

It's their own fault and they can sodding well pay for it.

Edited August 14, 2015 by geared