The Telegraph: How eurozone taxpayers came to own Greece

The other day a deal was finally struck on how to fund Greece for the next few years after many late night meetings and circular discussions. Although the deal may allow Greece to carry on for now, it seems likely that it will continue missing the targets set by the EU/ECB/IMF Troika, meaning a new funding gap will open and fear of ‘Grexit’ will resurface before too long. But the one thing that this deal did drive home is, when it comes to Greece, just how far down the wrong path EU leaders have gone.

As a recent Open Europe analysis shows, , 70.5 per cent of Greece’s €301bn debt mountain is now held by taxpayer-backed institutions (eurozone governments, bail-out funds and central banks as well as the IMF) – that is around €212bn, well over 100 per cent of Greek GDP, and by the end of January next year this is set to increase to close to €250bn. A further €14bn could be needed to execute a buy-back of Greek bonds – one of the measures included in this week’s deal, which involves using new funding to purchase Greek debt at a low price and then retire it, providing a reduction in debt equal to the difference in the purchase price and the original price of debt. In addition, we’re now looking at numerous billions which the eurozone governments and central banks will forego in profits on their holdings of Greek debt and reduced interest rates on loans. (Although how this isn’t seen as a loss for the countries or at least an increase in the loans remains an enigma).

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