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People first, or banks?

June 17, 2013

The anti-globalization pressure group Attac has published a study indicating that the bulk of the rescue funds made available for Greece have tended to go to help banks. Ordinary people haven't profited much, it said.

People pass a branch of National Bank of Greece in Athens ARIS MESSINIS/AFP/GettyImages
Image: Getty Images

More than three quarters of all rescue funds for Greece went directly to banks and rich investors, the German daily Süddeutsche Zeitung reported on Monday, quoting a fresh study by the anti-capitalist pressure alliance Attac.

The group said out of the 207 billion euros ($276 billion) earmarked so far by international creditors, 160 billion euros ended up with Greek lenders and investors.

"Political elites have not been trying to rescue the Greek population, but the finance sector," said Lisa Mittendrein from Attac Austria.

According to the calculations made by the pressure group, the government in Athens put 58 billion euros into the domestic bank's recapitalization program. Another 55 billion euros were used to pay back sovereign bonds and 11 billion euros more to buy back accumulated debt.

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Attac maintained that an additional 35 billion euros were spent with a view to sweeten the 2012 debt reduction scheme also known as the Greek haircut for affected insurance companies and investment funds.

The group also reported that only a small proportion of the money that actually did reach the Greek state budget could be used do anything meaningful for the population, as 35 billion euros had to be spent on debt servicing for the holders of sovereign bond bills.

"The widespread belief supported by European politicians that the various rescue packages for Greece have helped ordinary people in the country is no longer tenable," Mittendrein commented. Instead, she argued, Greeks have been made to foot the bill in terms of harsh austerity measures with all the known drastic social consequences like record-high unemployment.

The German government rejected the conclusions made by Attac, arguing that Greeks have profited from the government in Athens having more time to implement reforms. Berlin also claimed that all Greeks had profited from saving lenders from bankruptcy.

hg/rc (dpa, Reuters)