greek loan scam: German parliament agrees loans to Greece: bail out for foreign banks

On Friday, the Bundestag (parliament) in Berlin voted for a “rescue package” for Greece after a heated debate, with 390 votes for, 72 against and 139 abstentions. The parliamentary factions voting for the package included the CDU / CSU (Christian Democratic Union / Christian Social Union, FDP (Free Democratic Party) and the Greens...

Under the legislation presented by the government, the federally-owned KfW Bank would provide Greece with 22.4 billion euros in credit over the next three years. In total, the EU and the International Monetary Fund (IMF) are to provide Greece with 110 billion euros.

However not one cent of this money will benefit the impoverished people of Greece. Instead it will be used to refinance loans that were given to Greece. The banks and speculators had drastically raised their interest rates following Greek government bonds being classified as “junk” (high-risk investments) by the rating agencies. Now the EU and the IMF have jumped in to guarantee the banks their fat profits and save them from writing off some of their loans.

According to a report in the New York Times, about 80 percent of the total credit packet (about €90 billion) will flow directly to the German, French and other foreign banks, which are creditors of the Greek debt. Jean-Paul Fitoussi, an economics professor at the Institut d’Etudes Politiques in Paris said that the emergency plan for Greece was an “indirect bailout for the French and German banks”.

http://www.wsws.org/articles/2010/may2010/bund-m10.shtml

Wouldn't that make an odd, yet true, headline?

Roughly 30% of the money will come from the IMF. 40% of the IMF is funded by US taxpayers. It'll be money we'll never recover because our investor status will be junior to current bondholders, ie the banks. We're getting flayed again.

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2010/05/03/the-great-reflation.aspx

By guaranteeing the banks their "fat profits" and "save them from writing off some of their loans," they are preventing Greece from going into default. Is that what you really think would be best for Greece's citizens? To allow Greece to go into default?

their fat profits, you're saving your wife from a broken leg. Is that what you really think would be best for your wife, to have her leg broken?