Greece owes €323bn (£228bn) to a combination of official and private creditors, equivalent to more than 175% of its GDP.
Much of that debt mountain was built up by Greece receiving bailout packages, funded in part by its eurozone neighbours. Germany is far and away the most exposed country within the single currency bloc.
However, when adjusting exposure for the sizes of a country’s respective economy, Germany appears better placed than most neighbours to absorb losses.
Eurozone governments loaned Greece €52.9bn under the first bailout in 2010 and a further €141.8bn under a bailout in 2012. Germany’s exposure for the two bailouts is €57.23bn, with Franceowed €42.98bn, Italyowed €37.76bn and Spain €25.1bn, according to calculations by Reuters based on official data.
That is in addition to those countries’ contributions to International Monetary Fund (IMF) loans made to Greece.
When taking into account the countries’ exposure via bailouts, via European Central Bank (ECB) loans and via their banking systems, Germany is again well out in front, according to the thinktank Open Europe.As for what such exposure would really mean for a country’s economy, it is worth adjusting for relative GDP levels.
The news agency Bloomberg calculated liabilities as a share of 2013 nominal GDP levels and found a very different picture emerged.
On that ranking, Germany falls to eighth place with an exposure amounting to 2.37% of its economy’s size. France falls to seventh at 2.38% and Italy to fourth. On this measure, Slovenia at 3.06%, Malta at 3.03% and Spain at 2.78% appear to have the most to lose.
Given it is not a member of the European single currency, the UK is, of course, not exposed to Greece via any eurozone rescue loans. It is, however, on the hook because of its contribution to IMF bailouts.
The UK’s share of the IMF loans is about €1.3bn while its banking system exposure to Greece is about €9.85bn, according to Open Europe.
theguardian.com
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