It’s no secret that the biggest holder of Greek debt — which Greece is refusing to pay — is Germany.
But when you see how much exposure Germany has to Greek debt, you quickly realize just how motivated German Chancellor Angela Merkel is to prevent the Greeks from defaulting and to keep them in the eurozone.
She really, really needs to get Germany’s money back.
According to this table from Deutsche Bank, the Greeks owe Germany €87 billion (£62 billion, $96 billion).
That’s 20 billion more euros than the next biggest creditor, France.
Italy and Spain are heavily exposed too, but once you go further down the list the amounts quickly become smaller and more reasonable.
It’s all relative, of course: 400 million euros is doubtless a big deal in Cyprus.
But still, it’s no wonder that Merkel, the International Monetary Fund, and the European Union simply shrugged when the Greeks voted “no” to the bailout deal; Merkel has 87 billion reasons to ignore their wishes.
Here’s the table:
Now, before you become angry in solidarity with the Germans, there’s the twist at the end of the Deutsche Bank note. Even if Greece defaults and exits the eurozone, it won’t hurt these countries much.
In a note to clients, Deutsche Bank’s Abhishek Singhania and Jack Di Lizia write the debt has already been accounted for and nonpayment will therefore not be “financially burdensome”:
The assessment of major rating agencies is consistent with our analysis that although the economic loss due to a Greek sovereign default or an exit from the Eurozone could be large it is unlikely to prove to be financially burdensome because it is not likely to raise immediate funding needs in creditor countries and has already been largely accounted for in the debt statistics of these countries.
Also missing from the list are the obvious non-euro-using EU countries such as Britain, Denmark, and Sweden.
Suddenly, being a member of the EU but keeping your domestic currency looks like the most important economic decision these countries ever made.