Last night I shared a post I found on facebook comparing the cost of the Greek bailout with the amount used to prop up the banks following the banking crisis a few years ago. The figures were compelling; it also turns out they were fabricated. This is sad because the author had made a good point, and if he had checked his sources he would have found that, while the amount the banks were bailed out by was different to the figures he quoted, it was still colossal in comparison to what Greece needs. Therefore here is some more reliable information:
An article posted in the Guardian on 12th September 2011 (since updated, 20th May 2014) quotes a number of figures based on different factors, but concludes:
“not only has the [UK] government bailed the banks out to the tune of £123.93bn, and at its peak had liabilities for the banking crisis of £1.2 trillion, but the value of its stakes in the biggest banks has plummeted and the interest it is receiving on the loans is relatively small. The interest collected is smaller than that the government pays on its debts, taken out to refinance the banks”
Source: http://www.theguardian.com/politics/reality-check-with-polly-curtis/2011/sep/12/reality-check-banking-bailout
A report published by the USA’s Congressional Budget Office provides several more figures on the American banking crisis. These include:
“By CBO’s estimate, $428 billion of the initially authorized $700 billion will be disbursed through the TARP, including $419 billion that has already been disbursed and $9 billion in additional projected disbursements. The cost to the federal government of the TARP’s transactions (also referred to as the subsidy cost), including grants for mortgage programs that have not yet been made, will amount to $21 billion, CBO estimates…”
Source: http://www.cbo.gov/sites/default/files/cbofiles/attachments/44256_TARP.pdf
$21bn doesn’t sound very much in comparison to other figures mentioned, but it should be pointed out that this was the actual cost of the bailout, i.e. what the American tax payer won’t ever get back, not the amount of the loans considered necessary, deemed to be $700 billion. It also doesn’t take into account the appalling personal losses through mortgage foreclosures, job losses etc.
The current IMF estimate of the additional loan needed to prop up Greece is 52 billion euros. Of course Greece will need more if it is to finance itself for a full recovery, plus far better repayment terms based on sane levels of economic growth. And consider this: Greece is not a bank, it is a country of just over 11 million people, including children, the old and the sick. Furthermore, the situation Greece is now in is just as much, if not more, to do with the incompetence and near-sightedness (and obsession with propping up banks) of other European Governments, than it is to do with it’s own fiscal inadequacies, yet an entire nation is set to suffer as a result of decisions made by politicians and executives who only seem to have compassion when it comes to their own kind, not others.
Here’s one more quote, from the EU constitution:
“The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.”
(Article 1-2 The Union’s values. Treaty establishing a Constitution for Europe as signed in Rome on 29 October 2004)