US Taxpayers Just Paid $780 Million To Fund The Latest Greece Bailout Tranche

Tyler Durden's picture

The IMF is delighted to announce that it just approved a €3.2 billion disbursement of cash for Greece, its fifth, as part of the €12 billion in money that Greece needs in order to continue operating in the months f July and August. And just for what purpose will this money be used, one may ask? Well, as explained a few weeks ago, in Greek Math: €12 Billion In, €18.2 Billion Out the entire amount will be promptly recycled by global financial institutions in the form of debt maturities and interest payments, which amount to €18.2 billion in the months of July and August. Simply said ECB, EU and IMF money in, money owed to bankers out. The kicker: 17.09% of the money coming from the IMF, comes from, that's right dear US taxpayer, you (and since 21% of the quota contributions allocated to the IMF are deemed "non-usable", the actual number funded by the US is likely much higher). But this plot has a bonus kicker: as we reported on Wednesday, the actual Greek debt is no longer owed by European banks to the extent it had been previously expected: a development that threatens to scuttle the entire second Greek bailout plan as currently proposed. So as the banks have been selling Greek debt, who has been buying? Mostly hedge funds, such as everyone's favorite John Paulson. So to recap: US taxpayers have just paid out about $780 million of the $4.6 billion in order to fund interest owed to... hedge funds.

The WSJ provides a pretty chart explaining who is responsible for what:


And more:

Counting all IMF funding sources, the 15 euro-zone nations would be responsible for a substantially larger stake in the institution's Greek bailout than the U.S. European contributions to the IMF loan, of course, will in turn be dwarfed by euro-zone countries' far larger exposure through the European bailout.

To make its loan, the IMF will borrow from the U.S. Federal Reserve and the other central banks it taps and pay them interest of about 0.25% on the money; the IMF will then charge Greece about 3% on the loan.

Will the money be wasted? That depends on whether the Greek electorate swallows the cuts in salary and pensions required by the IMF and the country's European partners and whether a new economic strategy boosts Greece's competitive position.

The IMF is always at the top of any list to be repaid because its blessing is crucial for any country to be able to borrow internationally. If there were to be any losses on Greek loans, IMF policy is to absorb them rather than passing them on to members.

So that's the truth. And here is the party line, from Reuters:

In announcing the payment, part of a 110 billion euro IMF-European Union bailout package crafted for Greece last year, IMF Managing Director Christine Lagarde pointed to progress being made by debt-laden Greece, though noting that more work remains.

"The program is delivering important results: the fiscal deficit is being reduced, the economy is rebalancing, and competitiveness is gradually improving," Lagarde said in a statement.

"However, with many important structural reforms still to be implemented, significant policy challenges remain. A durable fiscal adjustment is needed, lest the deficit get entrenched at an unsustainably high level, and productivity-enhancing reforms should be accelerated, lest growth fail to recover," she said.

The IMF has warned that the crisis in Greece could reach countries like the United States through money market funds, especially if the contagion spreads to European banks heavily exposed to Greek debt.

The global lender scheduled its meeting to consider the fifth loan disbursement for Greece after euro zone leaders agreed on Saturday to release their portion of the 12 billion euros due to be paid to Athens from the initial bailout.

Lagarde said Greek authorities had made progress in the fiscal area by identifying measures required to reduce the general government deficit to less than 3 percent of gross domestic product by 2014.

She also lauded the government's privatization strategy and noted that while the plan to sell 50 billion euros of state assets by 2015 is "very ambitious, the establishment of an independent privatization agency should help realize transparent and timely implementation."

Still, more work needs to be done, Lagarde said.

"To strengthen Greece's competitiveness, structural reform implementation needs to be accelerated. This will help achieve synergies, such as between privatization and reducing administrative barriers to investment. The reform agenda should be expanded to address Greece's high labor tax wedge and inefficient judicial system," Lagarde added.

Incidentally, while not a minute was spared to sequester and prosecute DSK, today, for the second time, the French Republican Court of "Justice" decided to once again delay its probe into her alleged money laundering affair with Bernard Tapie.

Hedge funds around the world salute the decision, which will simply allow more taxpayer money to be reallocated into their various Cayman Island petty cash accounts.

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YesWeKahn's picture

It's always good to help brothers.

FeralSerf's picture

The Germans should be happy they aren't paying the bill.

CD's picture

Hey guys, think a little about the Turing test. I have a strong suspicion we have an actual, real-live algo in our midst ( coppertop ). Kinda primitive, responds to simple keywords related to the topic (see reaction to 'undervalued', large block posts of more than one paragraph, reaction to link posted, etc.) Now THIS is an account Tyler/Sacrilege should look into. Have you seen any multi-sentence reply from this account? Possibly just the handler doing the algo testing intervening, if so. No, this is a responsive, text recognition algo, constructing a response that attempts to be contextually tied to posts, based on pre-determined rules and patterns. I suspect it is also learning. See the other thread by Tony Pallotta on comparing 2007 top to current setup, and the sticky thread by Simon Black.

It is just good enough to fly under radar as an annoying/weird ZH reader or outright human troll -- but never inflammatory enough to be called out as such. 

Sorry for the repeated postings of this text, let's try to see if we can poke it enough to respond.

The funny part will be when several of them invade the threads, pick up on and respond to each others' activity and drown the site in HFT responses. (see also karzai_luver)

I have no idea whether this is technically possible, but if it even remotely is, countermeasures are in order.

DoChenRollingBearing's picture

Well, CD, you pose an interesting question early on a Sat. AM.

Worth looking into.

Bearings, of course, cannot make logical arguments either.  They just bear the weight and keep on turning.

piceridu's picture

Man, I thought something was fishy with that "dude"...replicant?

Deckard: She's a replicant, isn't she? 
Tyrell: I'm impressed. How many questions does it usually take to spot them? 
Deckard: I don't get it, Tyrell. 
Tyrell: How many questions? 
Deckard: Twenty, thirty, cross-referenced. 
Tyrell: It took more than a hundred for Rachael, didn't it? 
Deckard: [realizing Rachael believes she's human] She doesn't know. 
Tyrell: She's beginning to suspect, I think. 
Deckard: Suspect? How can it not know what it is? 

carbon's picture


Great piceridu ! It will be Interesting from what  ( country ) 

them ruff raft reply , after all, truly great outstanding people on zerohedge.

trampstamp's picture

Man you may have something there. Jeez, it even knows how to junk you. That's some pretty good AI. Awesome read!

spekulatn's picture

The Germans should be happy they aren't paying the bill.


"Up to perhaps 70 percent of Germans now doubt the long-term viability of the euro according to polls. In Greece some 80 percent are opposed to taking money either from the EU or IMF. In any event, loans are not going to save Greece as it is likely mathematically impossible for the Greek government to pay down its debt by taking on more debt. "Greece's public debt will rise to 161pc of GDP by next year, up from 120pc when the crisis erupted," Evans-Pritchard points out. Greece is headed in the wrong direction and its economy continues to erode as well."

mynhair's picture

HR 2411 in action.  I knew it.

Rainman's picture

This Greek horror flick has to end very badly...<covers eyes>

knukles's picture

We the people, in order to always be good for a fucking, do hereby passively agree....

mynhair's picture be always greased up.....

nmewn's picture

....and bounced off a debt ceiling.

Mr Lennon Hendrix's picture

Until the American Dream is dead and gone.

macholatte's picture

but wait, there's more.....

           US Tax Payer to bail out ........ Italy, Spain, Portugal

then, in 2 years, do it again.

How much in fees do the primary dealers get?


FeralSerf's picture

How much do they want?

Aren't those the same guys that swindled so much money from the PIIGS that they needed multiple bailouts?

rocker's picture

1.  This must be Crime Scene Weekend. Sure the primary dealers get fee money.  Handling Fees or something.

     Sort of like we will be buying oil from JPMorgan soon. And gezzzz. Like the FED can not just cut a check.  

2.  I just discovered that House Majority Leader Eric Cantor R-Va. is short U.S. Treasuries.

     The same guy who does not want to extend the debt ceiling, who's party did extend it the past 7 times.

     Why can these guys bet on their own votes. Isn't that like insider trading, collusion or fraud against Grandma's saving account?

James's picture

Cantor's a Jew. You know how they are.They just can't help themselves.It's in the genes.

nmewn's picture

As I've remarked before, I'm sick of accepting ridiculous premises.

We don't need to raise the debt ceiling at all!

This whole charade they are going through is about government spending.

      >>>At this baseline<<<


If it were down here:

     >>>At this baseline<<<

There wouldn't be a problem ;-)

pods's picture

In an ideal world that would be great for the gov to run a balanced budget. But in this one, without the pumping debt into the system we would immediately see that 12% hit to GDP and realize the depression we are in.

We will see it anyways, and soon, so either way it doesn't really matter.


nmewn's picture


We're all realists here I think...after awhile kicking the can, trading devaluing pennies back and forth to occupy the time gets old.

Government debt caused it, so cannot be the cure of it. It will have to be wiped out with all that entails.

Looks like we'll have plenty of company, no fiat is safe at this point.

What we have to watch for, in my view, is the insidious drive for a world currency out of this latest debacle, historically speaking. It (money) must be kept out of the hands of the credit cartel, meaning, it must be something one can hold in hand, to carry with you to purchase whatever you desire. 

It is a payment of your labor and carries with it that freedom...of sustenance, of lodging, of travel, of entertainment, of vice & virtue...and most of all, always unseen, untracked, uncounted again by the cartel & its statist whores. 

pods's picture

My greatest fear is the supranational currency that is their plan B.  It would reset all the fiats and would allow a new fractional reserve system to emerge.  Most would gravitate to it, as it would offer stability, comfort, and peace.  For a time.

I have argued with many about creation of money, and if it is by fiat, then we are all slaves.  Most raise the eyebrow, but the argument holds. If what you trade for your labor, or the value of it, is controlled by someone else, you are beholden to them.  You do not control what you are paid, for what you receive is not of your control.

I really dont care what we use as money. I like gold, I really like silver. We could use anything finite than cannot be created out of nothing, and cannot be cartel controlled.  It really does not matter what the medium is.  Gold is universal, so that is a great start in my book.  But it does not have to be gold.

Spot on about staying vigilant about the next savior fiat currency which awaits us!


nmewn's picture

"Most raise the eyebrow, but the argument holds. If what you trade for your labor, or the value of it, is controlled by someone else, you are beholden to them."

This is key, absolutely correct and needs to be understood.

It has always been about labor and the payment of it.

"I owe my soul to the company store" was not just a line in an old Tennessee Ernie Ford song, it was a fact of life for many ;-)

knowless's picture

it's hard for me to not like a discussion between two guys in guy fawkes masks...



nmewn's picture

You've found out these two Fawker's...LOL!

The line in the song is a reflection of the reality of working for company scrip or credit.

By the time next payday rolled around the worker was broke and indebted even more to the company he worked for. The prices at the company store and company lodging being so outrageously high, it was debt slavery.

The long forgotten song speaks to pods and my points quite well I think. And to make the ramifications of what we say to everyone more clear, just substitute the word government(s) for the word company(s).

Money can be anything accepted by both parties as payment and credit is always dangerous, not liberating as has been presented. And to allow only one form (as in a world currency) is an invitation to enslavement.

The idea of doing away with currency/money comes up from time to time. The promoters claim it (currency) to be inefficient. They will say most people use direct deposit and cards for commercial transactions.

What they don't say is what it also does. It can all be tracked to time & place of transaction which is an invasion of your privacy and even your rightful access to it blocked. If the latter can happen, even the past labor you have been paid for is not yours. That is despicable.

Fortunately, there are ways around this as well, it just takes another ID. But the honest shouldn't be forced to think this way.

Maybe Guy Fawkes Jr. ;-)

disabledvet's picture

How many Guy Fawkes we got in this joint?  Anywho this is an awesome critique and in my favorite form:  a single sentence.  The fact of the matter is money printing works at cross purposes to this particular form of governance insofar as growing this economy is concerned.  It is in my view now absolutely the right thing to do at a minimum given the political demands that a military withdrawal from the entire War on Terror be executed upon.  And while it should focus the government on the only task at hand to solve the multitude of crises that have befallen our leaders and ourselves:  jobs, jobs, jobs--strangely it has not.  I think this is a profound "misunderestimation" of the Fed...and by extenstion the Supreme Court of the United States and that institution's critical relationship to having a banking system and putting an economy on a path to growth con gusto.  The key word for me has been since day one "withdrawl."  That is an undefeated military that is being ordered to come home.  What awaits them?

pods's picture

Seems there is quite a strong representation for the man, or maybe the idea?

My favorite is Guy Fawkes-Mulder.  Smashing avatar.

My thoughts on the FED have changed over the past few years. I first saw it as a strict usurpation of power.  I later realized it was a marriage between gov and banking that benefits both.

The government's focus on jobs only suits them if the jobs lead to new debt creation.  That is why continuing education is so important, as it is a continual source of new debt, which by happenstance is non dischargeable.  Perfect for new slaves to get on the hamster wheel.


oldmanofthesee's picture

Correct! They seek to raise the debt ceiling, equal to slightly more of the Obama deficit spending, in EACH of the last two years. Rollback spending to just 2007 levels, no increase necessary. Black and white to me.

knukles's picture

Take this along with the NYT article today outlining how in 2008 it became (and ain't been changed as of yet, so no political hoots and hollers, grasshoppers) formal policy that the Federal government was no longer going to pursue white collar crime.

Wonder of wonders!
The so called "Conspiracy Theorists" are once agin proven spot on, correctamundo with formal confirmation by the government itself. 

Welcome to the Kleptocracy.
The American Dream is over, done, gone, zilch, nada, no more, fucking past tense, dead and buried without a promise for revival.

Talk about Caveat Emptor.  How's about we change that little homily on our coin and currency from "In God We Trust" to "Every Man For Hisself"
Transparency, my ass.

DoChenRollingBearing's picture

Too true, knukles.  No transparency, none at all.

NONE of our financial problems have been solved!

NO ONE of any significance has gone to jail!

I feel like I am beginning to fit in around here in The Lunatic Fringe Battalion of the The Tinfoil Hat Brigade!

pods's picture

Welcome aboard DCRB!  Misery may love company, but crazy loves it more.


James's picture

Todays tin is tomorrows reality

knukles's picture

An anecdote here and an anecdote there and pretty soon it becomes real statistics.

AnAnonymous's picture

Welcome to the Kleptocracy.
The American Dream is over, done, gone, zilch, nada, no more, fucking past tense, dead and buried without a promise for revival.

The US has been a kleptocracy from the start. How can the 'American' dream be gone as long as the US is managing to steal its way to prosperity?

The day the US fails to steal, you could kiss goodbye to the 'American' dream, not before.

TexDenim's picture

Dollars down the drain. Greece -- the future Greater Germany Co-Prosperity Annex -- will not survive in its present economic incarnation. Too bad. That money could have been used here at home.

disabledvet's picture

"must comment here...must comment here"....anywho-this dollar amount is awful close to equaling Greece's gold reserves in dollars.  "Party time over"?  My favorite term for what the letters "I M F" stands for came from South Korea in 1998. Let's just say "they're english was impeccable" thus obviating the need for any translation of any kind.  Such is finance!  Has anyone here taken a look at Italy's gold reserves?  I don't know if it's still true but "the banks get paper claims on it"--yet for some odd reason they keep clamoring for something other than the current "paper disbursement."  Go figure!

Joebloinvestor's picture

The contagion already spread when they said default threatened all.

putbuyer's picture

Mark Levin just quoted ZH to 8.5 million people.

This story

Listen live

click listen live.

disabledvet's picture

our viewership is higher.  Plus we're global.  We have Sudden Debt too.  Good luck finding that guy on the tele...

Mr Lennon Hendrix's picture

I tried to tune in, but I was blocked from hearing the redneck opinion of Mr Levin.  What was the quote?  Did he talk about Fight Club?  You do not talk about Fight Club!

kito's picture

i need a virtual chair to throw against a virtual wall to vent my complete disgust and anger.....

Hook Line and Sphincter's picture

The U.S. tax payers will never end up 'paying' dollars for this debacle, but they will be driving on toll roads, working in mines, and trespassing in once public lands that are to become the ownership of those that invoke the magic of squirting currency and credit out of their butt.


DoChenRollingBearing's picture

Unless of course they give us another year to buy more gold...  Then maybe you all can drive over MY toll bridge when gold gets to $55,000 / oz.  Or buy from MY gas stations, the only ones in town.

I have a feeling that nature / God dispenses rough & uneven justice if you wait to see it.  Banksters will likely suffer for their misdeeds, even if a few get away on their Gulfstreams.

j0nx's picture

Keep believing in that fantasy. The .gov will seize your metals LONGGGG before it reaches that price and you will be left there crying in your piss warm beer unless you are man enough to stand up to them when they show up at your door. In that case you won't be around to cry in your piss warm beer. GL with that hoarding metals and dreaming of being rich fantasy. They did it 80 years ago when there were no computers or detailed records of who bought what - think on that and be prepared to go on the lamb, work in the black market and constantly evade the man if you plan on enriching yourself on PMs if/when shit hits the fan for real.

Smiddywesson's picture

Too true

We can never pay this debt.  But then, TPTB knew this a while back, so I have to believe that they want to sink us so low that the US of A can never threaten them.  They have to make an example of us, because we became so powerful that we could have stopped them.  People will talk about what they did to us for hundreds of years.

Unless, things get so funky that they lose control of the situation.  Our society is so efficient and fragile, and global, that I dont' think TPTB really appreciates that they are not only playing with fire, but they will never again be able to put together the scheme they have today if things get out of hand.  In exchange for short term plunder, they have risked completely losing control.

Cost of anarchy: Several billion lives

Cost of freedom: Priceless

Bring it on.  I live in a country with energy, water, aerable land, and everyone has guns, lots of guns.  The big losers if "civilization", meaning the intricate dance of a modern global economy, breaks down, are the countries that no longer have any farming because of the IMF and the World Bank.  They have to pray nothing changes in a world where everything always changes.

the tower's picture

You have watched too many Hollywood movies... IF anyone is gonna fight it will be American against American. Cause you have guns, lots of guns...