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Dutch Profit From Crisis

category national | eu | news report author Sunday October 16, 2011 00:05author by reporter Report this post to the editors

Irish money and gas now both flowing east

The Dutch papers are full of it. The crisis loans imposed on Greece, Portugal and Ireland are generating huge profit. Holland is lending 390 billion at historically low rates and they are lending monies to Ireland at historically high rates.

Because of the low interest rates for Holland and Germany only, the Dutch are paying over 7 billion euro less in interest and they secured a low interest for the future as well. The Dutch are in debt by 390 billion!

The euro crisis provides 7.6 billion to the DUTCH Treasury. The historically low interest rates that are paid by the Netherlands during this crisis gave the minister for Finance between 2009 and 2011 a windfall of 7.6 billion euros. This completely covered the Dutch additional cost of the crisis, namely save ABN Amro bank, increased budget deficits, the total emergency loan lended out to Greece - all covered.

Favorable rates
The very favorable rates for the Netherlands and Germany have their counterpart in weaker euro countries such as Italy and Spain. Investors there ask historically high rates because they fear that countries will not be able to pay off their debts.
The decline in interest rates since 2009 for the Netherlands is a fact. Netherlands refreshed approximately 15 percent of the total outstanding debt (390 billion).

The crisis is thus virtually passed the Treasury by. Greece also pay interest on the borrowed money to the Netherlands: 23.6 million euros in 2010, 90 million this year, rising to 273 million in 2015. Ireland and Porugal also pay their monthy interest to Holland. Even if Greece cannot pay back their loan, Holland still made profit from the crisis.

As the emergency law is in defiance with the EU Treaty of Lisbon, the EU countries decided to change this convention in October 2010. In 2013 a permanent emergency fund is to take effect.

Ireland was the first country to appeal to the emergency fund in November 2010 to the total of 67.5 billion. Irish pension funds are emptied to the tune of 17.5 billion Euro.

Ireland also has the worst deal on gas. Under 20 % goes to the Irish Government. The rest, along with our monies, flows east.

author by Mike Novackpublication date Tue Oct 18, 2011 11:06author address author phone Report this post to the editors

Of course.

The interest rate charged any borrower has several components. One component is the "time value of money", how much the lender wants in order to temporarily give up the use of the money while the loan is out. Another component is the "risk factor", the chances according to estimate by the lender that the loan will never be paid back and they lose that money.

The first component is the same for everybody (every borrower). The second is very different according to how "credit worthy" the lenders feel this borrower to be. In this case the lenders of the world feel very sure that whatever they lend the Dutch or the Germans will be paid back, on time, and with the interest. They are not so certain that Greece, Portugal, Spain, Italy, or perhaps you folks will pay back the loans. A sovereign borrower can always tell lenders "too bad". But that measn no future loans for a very long time to come and any that are made would have a prohibitively high rate of interest.

author by Leftypublication date Tue Oct 18, 2011 14:01author address author phone Report this post to the editors

Iceland seems to be doing ok Mike.

They said get lost.

They are currently around the 5% mark for loans I think

 
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