Schaeuble wants IMF out and bailouts ‘a la carte’ with Germany only to gain

Joaquín Almunia, Vice-President of the European Commission in charge of Competition, received Wolfgang Schäuble, German Federal Minister for Finance. The host is obviously bewildered with what he hears from his German visitor. (EC Audiovisual Services).

Joaquín Almunia, Vice-President of the European Commission in charge of Competition, received Wolfgang Schäuble, German Federal Minister for Finance. The host is obviously bewildered with what he hears from his German visitor. (EC Audiovisual Services).

Wolfgang Schaeuble, the German Minister of Finance issued an appeal yesterday to European partners to do together whatever it takes, in order to push the International Monetary Fund out of the European Union. Four years ago it was again Schaeuble and Germany the ones who demanded the cooperation of IMF in the first bailout of a Eurozone country, at the prologue of the Greek tragedy in the winter of 2009-2010.

It’s unbelievable how narrow and short the field of vision of this man is, when it comes to money. Back in 2009 Germany wanted badly the know-how, the cooperation and the considerable contribution of the IMF amounting to the one-third of the money needed to bail out Greece, in a loan facility then totalling at around €120 billion.

Today when the IMF says it’s time for Germany to start spending for the rest of Europe, Berlin wants the IMF out. Incidentally, the German Finance Minister speaking at the Economic Council of his CDU political party yesterday said that, “there is a growing discontent over IMF’s implication in the European financial affairs and we Europeans should work together, to place the situation under our own exclusive control, so as we won’t be needing help from the IMF”.

Germany only to gain

However there is more to it. The IMF in its latest report on Greece, which was published last week, said that the Greek sovereign debt is not any more sustainable and needs to be given a new haircut, the third in a row. After the last two haircuts, performed only on the privately held Greek bonds and the PSI (Private Sector Participation) operation in March 2012 to cut down the Greek sovereign’s obligations, most of them are now officially held by Eurozone governments, central banks and the ECB.

In reality the German exchequer today holds directly and indirectly – through ECB and Bundesbank – something less than the one-third of the Greek debt. When the moneybags in Berlin heard that the IMF considers the Greek debt no more sustainable and recommends a haircut, they want to push the Fund out of Europe, because it is now their own holding of this country’s bonds in line to be cut down. Germany agrees only to bailouts that leave a profit for Berlin.

Let’s tell the whole story. The IMF report on Greece also revealed that Germany had actually delayed the first Greek debt haircut by one year, thus increasing its cost and reducing effectiveness. Berlin did that in order to give the opportunity to German commercial lenders to get rid of their primary Greek debt portfolio they had accumulated in the good times. In reality Germany gained tens of billions of euros from the Greek bailouts and the delayed PSI operation.

Haircuts ‘a la carte’

When this PSI operation finally got the green light from Berlin in March 2012, it was only the Greek lenders and the country’s social security funds still holding those toxic bonds. Consequently, after the PSI, the Greek banking system and social security funds went bust. Berlin had already taken care that the German lenders had got rid of their own Greek debt portfolio, with the financial help of the ECB. In this respect the most favoured ‘private’ German lender was the Deuthsche Bank.

With that kind of political help from Berlin and Frankfurt this major German bank managed not only to get rid of its Greek toxic assets, but to even conclude successfully a capital increase last month, raising fresh money from the market to the tune of €2.5bn. Not to forget that Deuthsche was the largest creditor to Greece’s sovereign and private borrowers, making billions in the good times and getting a swift and taciturn bailout when the crisis came. And all this despite the fact that Deuthsche was responsible for Greece’s over borrowing.

At the end poor Greeks paid the bill of Deuthsche Bank’s imprudent lending to Athens. In reality the country’s bailouts saved the German banks at the expenses of the Greek pensioners. Athens was obliged to pay Berlin interest rates reaching 5%, at a time when the IMF was lending to the country at 3%.

Unquestionably, Germany has gained tens of billions directly and indirectly from the two Greek bailouts. Now that the IMF tells the whole story and asks Berlin to finally undertake a part of this cost, at least the share which corresponds to the indirect bailouts of its own lenders, Schaeuble asks his European peers to throw the Fund out of Europe.

This person was the architect of all those financial operations and hopefully the German people will send him home in the forthcoming September elections. Europe cannot tolerate any more such a chauvinistic behaviour and Eurozone has to get rid of this person who represents the most backward circles of Germany.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Closing the gaps in accelerating women’s rights:the role of medical students

COP21 Breaking News: China has promised to cut emissions from its coal power plants by 60% by 2020

EU Commission spends billions without achieving targets

LEAGUE OF YOUNG VOTERS LAUNCHES TOOL FOR YOUNG PEOPLE TO COMPARE POLITICAL PARTIES AHEAD OF EU ELECTIONS

The vital role played by logistics during humanitarian crises

Will CETA be implemented after eight long years or it will be vetoed by the EU citizen?

A new global platform to unleash entrepreneurs on the world’s toughest problems

EP launches Caruana Galizia Prize for Journalism on anniversary of her murder

EU citizens want more competences for the EU to deal with crises like COVID-19

COP25: ‘Signals of hope’ multiplying in face of global climate crisis, insists UN chief Guterres

Canada needs to increase foreign aid flows in line with its renewed engagement

Data show EU Economy in a stubbornly subdued state

Why are so few women buying into Bitcoin?

3 cognitive biases perpetuating racism at work – and how to overcome them

The EU will always have a stable partner in Montenegro, says President Đukanović

The jobs forecast is unsettled. It’s time for a reskilling revolution

This one small change could transform education for millions

Google prepares to final EU judgement over Android antitrust case

Greferendum: the biggest political gaffe in western modern history to tear Europe apart? #Grexit #Graccident

6 young leaders who are improving the state of the world on International Youth Day

Human rights chief calls for international probe on Venezuela, following ‘shocking accounts of extrajudicial killings’

Protests, violence in Haiti prompts international call for ‘realistic and lasting solutions’ to crisis

UN working ‘intensively’ to stop Ebola in eastern DR Congo, following second case in major border town

Oslo leads the way in ‘Breathe Life’ campaign for cleaner cities in climate change era

Bureaucracy in the member states again the obstacle for long due strong European Hedge Funds

London is becoming the world’s first National Park City

1 in 7 people would choose not to fly because of climate change

Libyan national conference postponed, nearly 500,000 children at ‘direct risk’ from fighting around Tripoli

Industrial clusters using green hydrogen can drive clean energy transition in Europe and China

UN mobilizes in Rohingya camps to support babies born of rape; young mothers face stigma

The crucial need to prioritise palliative care in Universal Health Care

Could 2021 be a turning point for forests and climate change?

$675 million appeal to stop coronavirus in its tracks, as deaths rise

What wealth managers can learn from family dynamics

How’s Life? reveals improvements in well-being but persistent inequalities

The challenge of maintaining interest in Primary Health Care in medical students

Antitrust: Commission imposes interim measures on Broadcom in TV and modem chipset markets

Heart attacks and strokes are more common on high pollution days, data shows

Governments can fight corruption by joining the digital payment revolution

These are the benefits of learning a second language

Tax crimes: MEPs want EU financial police force and financial intelligence unit

State aid: Commission approves € 1.6 billion Polish scheme to compensate companies for damages suffered due to coronavirus outbreak and provide liquidity support

Science is ‘key’ to pushing forward the 2030 Agenda, UN development forum told

Greece to stay in the euro area but the cost to its people remains elusive

India’s future as a world power depends on 4 key relationships

Trade MEPs promise thorough scrutiny of the EU-UK agreement

How Asia could be the winner in the US and China’s Belt and Road race

Africa’s shrinking lake shows the impact of climate change on women and indigenous people

Quarantine: A mental health guide for every mood

European Commission kicks off major EU trade policy review

New Eurobarometer survey shows: The majority of Europeans think the EU should propose additional measures to address air quality problems

This mobile laundry gives homeless people free showers and washes their clothes

Italy’s dilemma after Merkel-Hollande agreed loose banking union

EU budget: Commission proposes major funding increase for stronger borders and migration

As the Universal Declaration of Human Rights turns 70 – is it time for a new approach?

UN policewoman recognized for ‘speaking up and speaking out’ on behalf of the vulnerable

Can Greece’s devastating economy deal with the migration crisis?

Afghanistan: UN envoy urges further extension of ceasefire with Taliban, as Eid ul-Fitr gets underway

The European reaction to the neo-fascist wind

Computer skills are crucial for children – in lockdown and in life

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s