TheLocal.de — The Süddeutsche Zeitung (SZ) reported on Tuesday that according to German Finance Ministry reports shared with the Green Party, Germany made €1.34 billion from various financial schemes meant to aid Greece.
One loan by the German government-owned development bank KfW in 2010 to Greece yielded net gains of €393 million through interest.
Frankfurt’s European Central Bank (ECB) also launched its now-defunct Securities Markets Programme (SMP) to purchase government bonds to help financial crisis-hit countries like Greece. Each year, these bonds earn profits, which then the ECB distributes to central banks of eurozone states. Since 2015, according to the SZ, the German SMP profit share totalled €952 million.
Eurozone states actually decided in 2012 to pay out profits from the bond purchases to Greece. But since the second Greek relief package expired in 2015, the profits from 2014 were blocked and placed in a special account.
Revenues from interest since 2015 were no longer transferred out of the account. Parliamentary State Secretary in the Federal Ministry of Finance Jens Spahn told the Green party that the German government was not planning any transfer.
“The interest gains must at last be paid out to Greece,” said Green party EU expert Manuel Sarrazin to the newspaper.
“It cannot be that [German Finance Minister] Wolfgang Schäuble can refurbish the German budget with Greek interest profits.”
Green party budget policy spokesman Sven-Christian Kindler also criticized the findings.
“It is in fact legally possible for Germany to earn from the crisis in Greece,” Kindler said. “But it is not legitimate in the moral sense of solidarity.”
The good news for Athens though, is that if it completely implements reforms demanded by lenders in 2018, it will receive the profit made from the SMP in 2017.
In June, EU officials agreed to a debt deal with Greece, amounting to €8.5 billion in cash, in the latest tranche of Greece’s €86 billion bailout agreed in 2015.
The KfW, formerly KfW Bankengruppe (banking group), is a German government-owned development bank, based in Frankfurt. Its name originally comes from Kreditanstalt für Wiederaufbau (“Reconstruction Credit Institute”). It was formed in 1948 after World War II as part of the Marshall Plan.
It is owned by the Federal Republic of Germany (80 percent) and the States of Germany (20 percent). It is led by a six-member Managing Board headed by Ulrich Schröder, which in turn reports to a 37 member Supervisory Board. The chair of the Supervisory Board changes annually between the German Federal Ministers of Finance and Economic Affairs.
The current chairman of the supervisory board is Wolfgang Schäuble who also held the chair in 2015, when it was proposed that 50 billion euros of Greek public assets be transferred to the Institution for Growth in Greece. The Greek government adamantly rejected this option.