The Greek sovereign debt is in the news today. I got to wondering just how big it is. Meaningful numbers are difficult to find, but I succeeded after a while by consulting the German Spiegel (link). It carries a listing of the debt subdivided into categories—thus the institutions that actually hold it. I show this in a tabulation. Only money actually dispersed, thus actually paid out, to Greece is included. Much more has been promised. My conversion of Euros to dollars uses a rate of $1.2671 per €1, a quite low rate reached this morning.
Greek Debt | |||
€ bill. | $ bill. | % | |
European States | 41 | 52 | 18.0 |
European Central Bank | 50 | 63 | 21.9 |
IMF | 18 | 23 | 7.9 |
Greek banks | 50 | 63 | 21.9 |
Foreign banks | 39 | 49 | 17.1 |
Foreign funds | 30 | 38 | 13.2 |
Total | 228 | 289 | 100.0 |
Much of the fretting in the media circles around the smallest number here, the holdings by foreign funds (13.2% of the total); some of these are hedge funds. The reason for the barely suppressed hysteria is that hedge funds insure their holdings using credit default swaps; such instruments still exist and may still be sold as derivatives, hence the liabilities are spread God-only-knows where. The invisible consequences may materialize, who knows, even in this humble basement where I write, and I may succumb to dark evil things that will suddenly attack from thin air.
To get some feel for these numbers, I looked up the GDP of the European Union; granted, that is greater than the Euro Zone. That number was $16,282 billion in 2010. The Greek debt, therefore, represents 1.8 percent of the gross domestic product of all Europe. In 2010 Greek GDP stood at $305 billion. Germany’s was $3,315 billion—and the Greek debt, expressed as a percent of German GDP, was 8.7 percent.
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