These loans are beginning to look suspiciously like grants. Picture by the European People's Party.
Cast your minds back one year. The original bailout for Greece - what was supposed to be the final one - was just being signed off, and European leaders were celebrating, convinced that they'd nipped the eurozone crisis in the bud. National leaders went back to their electorates after 'secret, dark debates' telling tales of how they'd profit from the return on the loans. More sceptical warnings that the loans would not be paid back - that restructuring or default would ruin them, or that they were not commercially viable, hence the involvement of states, rather than banks - were roundly ignored.
As it turns out, the sceptics now stand vindicated: Ireland and Portugal's interest rates were slashed on Thursday, to between three and a half to four per cent, with the deadlines by which they have to repay the loans increased from seven and a half to fifteen or thirty years. Greece's interest rate and repayment time was similarly reduced and increased, respectively, as part of a new bailout. The move may well be beneficial to the recipients of the bailout funds, and both the Portuguese and Irish premiers have saluted the eurozone's decision, welcoming it with warm words and appraisal. But for the countries - including Britain - that have had to stump up the cash? Hardly.
What they expected to receive is now even smaller, and will take a lot longer than they thought before they make a profit. Whether they actually make a profit or not is dependent on there being no major debt restructuring or default, as is already being discussed in Greece. As Enda Kenny, the Irish Taoiseach, said of the move: 'ultimately it reduces the cost of our debt.' Which means that it also reduces the total amount that the creditors - i.e. you - will receive. Ireland's decrease alone is estimated to be worth £800,000,000 every single year, according to calculations by Irish officials. And the chances that we'll receive any profit at all could be drastically cut if there is continued talk of restructuring or default: Greece now looks almost certain to default on a least part of its debt, and if Ireland and Portugal follow suit then the money we could make from our 'loans' will be reduced further.
It may appear somewhat ruthless to talk of helping indebted countries in terms of what we can get in return, but we ought to remember that these aren't small sums we're talking about. Britons have spent well over twenty billion pounds so far on the bailouts - the equivalent of several hundred pounds per person, taken out of public funds. If we aren't getting something in return, then it's perfectly right to ask 'what is the point?' Why should Britons pay up massive sums of money when there is practically no benefit to them? We've all heard how a eurozone collapse would be disastrous to the UK economy, and it would be wrong-headed to say that it would not have an impact. But why should British taxpayers be involved in that, when the eurozone countries can handle it themselves?
And - lest we forget - our help is not strictly necessary. As the second Greek bailout - in which we did not participate - proves, we are not needed to help prevent a eurozone collapse. We are wanted. We should ask, as the people from whom the money ultimately comes from, what we get in return. And if the answer is 'nothing,' or, more accurately, 'very little - none of it guaranteed,' we should cease to involve ourselves in the affairs of the eurozone bailout scheme.