The Case of Greece

Hans-Werner Sinn

Chapter Chapter 6 in The Economics of Target Balances, 2020, pp 39-47 from Springer

Abstract: Abstract The first beneficiary of the Target credit was Greece. Target and cash balance credit came early in the crisis and was then augmented by the fiscal credit provided officially by the intergovernmental European rescue programs and the IMF. The sum of these credits peaked at €347 billion in 2015 and then declined to €264 billion or 143% of GDP by the end of 2019. Unlike frequent assertions made in 2015, the public credit provided by other states including the Eurosystem and the IMF was not primarily used to bail out foreign creditors. In fact, only about one third of the public credit provided to the Greek economy from 2008 to 2015 was used for that purpose and one third was used to finance the Greek current account deficit accumulated during this period, helping Greece sustain a sum of public and private consumption way above 100% of national income. In net terms, the remaining third was used by Greek investors to finance foreign investment inside and outside the Eurozone.

Keywords: Capital controls; Rescue programs; Bail out; ESM; EFSF (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-50170-9_6

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DOI: 10.1007/978-3-030-50170-9_6

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