A report in the Rheinische Post reveals that the German Ministry of Finances has admitted the dramatic impact of the austerity policy in Greece, in its response to a question by Die Linke.
The German Ministry revealed that one in two young people in Greece is unemployed; the economy shrunk by 25% since 2009 and the debt has soared. Greece’s alternative, according to the German Ministry, would be bankruptcy, but this would have a very high adjustment cost.
Furthermore the document reports how the expectations from privatizations between 2010 and 2013 fell far from short – only 1 billion euros revenue compared to the expected 22 billion euros. The German Ministry further admits that the dramatic wage and pension cuts have caused an explosion of unemployment.
Die Linke MP Andrej Hunko commented that that German Ministry’s response was proof of how the policy observed in Greece caused further recession and poverty without improving the country’s finances. To this he cites statistics show that outstanding debts towards the Greek state increased from 46 billion euros in 2012 to 78 billion euros in 2014. The rescue policy, according toe Mr. Hunko, was an “abysmal failure”.
The newspaper report further notes that the Greek government has paid Germany back about 360 million euros in interest, while stressing that the German state has not lost a single cent so far. With the financial situation in Greece getting worse though, the German government expects to receive about 20 million euros on an annual basis.
