GERMAN ACTIONS ON GREEK CRISIS

Abstract

Beginning of Greece problems was related to the accession to the Euro Zone. It occurred despite Greece did not meet the criteria thanks to the support of Germany and the Bundesbank, which assessed the economies of countries aspiring to a common currency. Lack of credibility for one country could burry the entire project. After entering the euro zone, Greece has significantly increased the reliability and successive governments could continue to fund increasing debt by issuance of bonds, bought mostly by French and German banks. Greek debt problem was exposed by the crisis of 2008. After collapse of the Greek finance European Union was forced to create assistance programs for the country, exceeding 100 billion. The largest cost were beard of course, by the economy of Germany. In the possession of European banks are Greek government bonds worth 52,3 billion dollars. With about 43 percent of this amount corresponds to German institutions, and further 27 percent to French lenders. Thus, Greece's problems transforms into problems of the banking sector in Germany and France, and problems across the EU economy Financial institutions and EU member states have imposed draconian Greek rescue package, which is believed to be a rescue package for the EURO. Germany stresses that loans to Greece, should be based on "market price" because otherwise it would be a form of subsidy, which violates the principle of the euro area. Angela Merkel has been pushing up the leading role of the IMF's "rescue" of Greece, which met with numerous objections. Merkel has been opposing by long time the idea of financing the debt of Greece by other countries, particularly by Germany. Merkel behaved so in fear of her party's election results, because the German taxpayers with an increasing reluctance opposed aid for the Greeks. German minister of economy said, however, that the ejection of Greece from the euro zone is impossible. In consideration to many economists Greeks will not be able to repay their obligations, most Greek bonds which were held by German banks should be written off. Germany has adopted a tough stance towards Greece and its problems with a huge budget deficit, impending bankruptcy of the country. Germany was the biggest beneficiary of the unified currency. Now it's bearing the greatest cost of saving a drowning partner. Billions of euros, which are pumped, are not guided by a means of noble conception of European solidarity, but a pragmatic concern about its banking system.