Only a small fraction of the €240bn (£170bn) total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes.
Most of the money went to the banks that lent Greece funds before the crash.
Unlike most of Europe, which ran up large budget deficits to protect pensioners and welfare recipients, Athens was then forced to dramatically reduce its deficit by squeezing pensions and cutting the minimum wage.
The troika of lenders first stepped in during the spring of 2010 after Athens could no longer afford to finance €310bn borrowed from a wide range of major European banks.
Two years later, the International Monetary Fund (IMF), European commission and European Central Bank (ECB) came up with a second bailout that centred on a €100bn debt write-off by private sector lenders.
Private bondholders saw the value of their bonds drop by 53% and took a further loss by exchanging the debt for securities with a lower interest rate.
This eliminated about €100bn of debt, but €34bn was used to pay for various “sweeteners” to get the the deal accepted. That €34bn was added to the Greek debt. Greek pension funds, which were major private lenders, also suffered terrible losses.
Then €48.2bn was used to bail out Greek banks which had been forced to take losses, weakening their ability to protect themselves and depositors.
Lastly, €140bn has been spent on paying the original debts and interest.
Less than 10% of the bailout money was left to be used by the government for reforming its economy and safeguarding weaker members of society.
Greek government debt is still about €320bn, 78% of it owed to the troika. As the Jubilee Debt Campaign says: “The bailouts have been for the European financial sector, while passing the debt from being owed to the private sector to the public sector.”
