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Dutch Profit From Crisis
national |
eu |
news report
Sunday October 16, 2011 00:05 by reporter
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! |
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Jump To Comment: 1 2Of 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.
Iceland seems to be doing ok Mike.
They said get lost.
They are currently around the 5% mark for loans I think