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OK, I'll try to shed some light on why this subject tends to inflame some of the europeans nationalistic sentiment with a concrete example: 1. Meet Portugal (m

OK, I'll try to shed some light on why this subject tends to inflame some of the europeans nationalistic sentiment with a concrete example: 1. Meet Portugal (my country). Some may know us derisively as the P in PIGS because of our financial problems (much similar to the Greek one in nature and extent). In 2010 and 2011 as one of the 14 member states of the EU that were part of the Greek loan facility Portugal contributed with 1102 million euros into the 52.9 billion loan that greece received [1]. Yes, that's correct, not all of the debt that people are so eager to expect that German forgives is from their coffers, it was actually pooled from the following countries: Belgium, Cyprus, Germany, Estonia, Finland, France, Ireland, Italy, Luxembourg, Malta, Netherlands, Austria, Portugal, Slovenia, Slovakia and Spain. 2. As you may know, about the same time we had our own problems and also had to be bailed out. As part of the measures put in place to reduce our deficit a massive tax hike was implemented in the end of 2012 [2] I'll draw attention to single one of those measures: the 3.5% extraordinary tax on the income paid by every single person with income above minimum wage (485€/month) including pensioners. Now, for the money quote [3]: "Minister of Finance Vitor Gaspar said the tax would bring in 1025 million euros". Less than what Portugal contributed to the Greek bailout fund. 3.5% of the income of every citizen in this country. In conclusion, that's one of the reasons for the nationalistic outrage against Greece defaulting the loan. It is not only the money of the richest bankers of Europe that won't be repaid, it is the taxpayer money of each of those countries that contributed to their rescue. To put in perspective, 1102 million euros means that default would cost every inhabitant in this country 110 euros (about 330€ per household) and not only hypothetically but in practice too as demonstrated above. EDIT: Changed second link as it was paywalled for the same news, but on CNN [1] http://www.rekenkamer.nl/english/Publications/Topics/EU_governance_to_combat_the_economic_and_financial_crisis/Financial_stability_instruments/Financial_instruments/Greek_loan_facility http://www.rekenkamer.nl/english/Publications/Topics/EU_gove... [2] http://edition.cnn.com/2012/12/31/business/portugal-fiscal-tax-increase/ http://edition.cnn.com/2012/12/31/business/portugal-fiscal-t... [3] http://www.eurofound.europa.eu/observatories/eurwork/articles/other/governments-first-bill-taxes-christmas-allowance http://www.eurofound.europa.eu/observatories/eurwork/article...

shoo 11y ago
Thank you for clearly explaining where some of the money came from, and pointing out this subtlety. It is perhaps interesting to compare Portugal's contribution to Germany's after crudely normalising by GDP: * Portugal contributed about 0.48% of its GDP in loans, compared to Germany's contribution of around 0.41%. * Portugal's GDP / capita is a bit less than than half of that of Germany
craigyk 11y ago
No doubt you should be annoyed, but you should direct most of that ire at the troika than at Greece. The money that went to "bailout" Greece really made its way to EU lenders by way of Greece. A real bailout would have consisted of of policies and loans that went to rebuilding the Greek economy, not toward squeezing every last drop of tax revenue from the few Greeks who are still employed and pay taxes.
- chvid 11y ago
  That is really not the right way to understand it. The buying and refinancing of bonds is a very direct support of the Greek economy as the bonds are used by the Greek banks as collateral when they go to the central bank to get cash euros to give to their customers. Greeks have taken out billions of fresh euro bank notes from their ATMs in the past few months. Without the Troikas support this would not have been possible.
  - deleted 11y ago
    [deleted]
chvid 11y ago
Very well said. And this is why there is little support in the rest of the EU for further transfer of wealth to Greece at this point.
toyg 11y ago
The problem with "your money" (as well as Belgium's etc etc etc) is that it didn't "go to Greece": it went to private lenders, aka French and German banks which were holding Greek debt. The honest people of Portugal were swindled out of their money, in the tradition of socializing private losses (while privatizing profits wherever possible). So I would suggest you redirect your complaints towards the real responsible parties: European bankers and the elites who keep enabling them. Portugal would benefit from getting together with other countries and ask for their money back from the (mostly German and French) financial sector, or at least a big haircut. This is also true of Italy, Spain, Ireland and so on.

shoo 11y ago

Thank you for clearly explaining where some of the money came from, and pointing out this subtlety. It is perhaps interesting to compare Portugal's contribution to Germany's after crudely normalising by GDP: * Portugal contributed about 0.48% of its GDP in loans, compared to Germany's contribution of around 0.41%. * Portugal's GDP / capita is a bit less than than half of that of Germany

craigyk 11y ago

No doubt you should be annoyed, but you should direct most of that ire at the troika than at Greece. The money that went to "bailout" Greece really made its way to EU lenders by way of Greece. A real bailout would have consisted of of policies and loans that went to rebuilding the Greek economy, not toward squeezing every last drop of tax revenue from the few Greeks who are still employed and pay taxes.

chvid 11y ago
That is really not the right way to understand it. The buying and refinancing of bonds is a very direct support of the Greek economy as the bonds are used by the Greek banks as collateral when they go to the central bank to get cash euros to give to their customers. Greeks have taken out billions of fresh euro bank notes from their ATMs in the past few months. Without the Troikas support this would not have been possible.
- deleted 11y ago
  [deleted]

chvid 11y ago

Very well said. And this is why there is little support in the rest of the EU for further transfer of wealth to Greece at this point.

toyg 11y ago

The problem with "your money" (as well as Belgium's etc etc etc) is that it didn't "go to Greece": it went to private lenders, aka French and German banks which were holding Greek debt. The honest people of Portugal were swindled out of their money, in the tradition of socializing private losses (while privatizing profits wherever possible). So I would suggest you redirect your complaints towards the real responsible parties: European bankers and the elites who keep enabling them. Portugal would benefit from getting together with other countries and ask for their money back from the (mostly German and French) financial sector, or at least a big haircut. This is also true of Italy, Spain, Ireland and so on.