ESMT White Paper

Where did the Greek bailout money go?

ESMT White Paper
Subject(s): Economics, politics and business environment
Keyword(s): Greek debt crisis, government debt crisis, European debt crisis, Greek bailout, Economic Adjustment Programme
JEL Code(s): H50, H62, H81, H87

This paper provides a descriptive analysis of where the Greek bailout money went since 2010 and finds that, contrary to widely held beliefs, less than €10 billion or a fraction of less than 5% of the overall programme went to the Greek fiscal budget. In contrast, the vast majority of the money went to existing creditors in the form of debt repayments and interest payments. The resulting risk transfer from the private to the public sector and the subsequent risk transfer within the public sector from international organizations such as the ECB and the IMF to European rescue mechanisms such as the ESM still constitute the most important challenge for the goal to achieve a sustainable fiscal situation in Greece.

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