Financial assistance to Greece: Three programmes. EPC Discussion Paper, 26 February 2016

There are a lot of myths surrounding the bailout money that was given to Greece. Many people still believe that the money never went to the Greek people, but to the Greek and European banks; that the intervention of the euro-area governments and the IMF dealt almost exclusively with the Greek debt; that very little money was used to finance Greek public expenditure; that most Greek debt was reimbursed; that no cuts were made to the stock of Greek government bonds on the market; and, finally, that so far, no cuts have been made to the debt of the Greek state towards the euro-area countries. In this Discussion Paper, Fabio Colasanti debunks some of those myths by taking stock of the numbers behind the financial support given to Greece by the countries of the euro-area and the IMF. Examining the three bailout programmes in detail, he discusses the reasons for and against a restructuring of the Greek public debt in 2010, its implementation in 2012, the degree in which the Greek debt towards the euro-area countries has already been cut, and the scope for further cuts. Finally, the paper explains how both issues were and are still dominated by internal political considerations, both in the creditor countries and in Greece.