Did the Greek bailout money go to ‘liquor and women’?

I’m just following up here on some comments I made Thursday about Dutch Finance Minister Jeroen Dijsselbloem’s intervention on liquor and women given the EU’s 60th anniversary celebration today.

Greece underwent a debt restructuring, not a bailout. The difference between a bailout and a debt restructuring goes to the question: where did the money go? And because Dijsselbloem made the analogy about ‘liquor and women’ when talking about solidarity, it seemed like he was just giving voice to a stereotype of the ‘profligate’ south – derisively dubbed the PIGS – Portugal, Italy, Greece and Spain. Here’s the quote:

“As a social democrat, I think solidarity is extremely important. But whoever makes that appeal, also has responsibilities. I can’t spend all my money on liquor and women and afterwards expect your support.”

The only way to interpret this sequence of comments is that Dijsselbloem intended to connect north-south solidarity with responsibility, and then used an analogy about someone spending money on booze and hookers and expecting support as a negative example of not taking that responsibility seriously. If your Spanish, how would you interpret this?

A white paper published by two German researchers, Joerg Rocholl and Axel Stahmer, answers the question ‘Where did the money go?’ Here are the figures:

Here is a link to the full white paper. I latched on to it via an article from the German newspaper Handelsblatt. It’s a good synopsis. Read it!

Less than 5% of the money was used for a ‘bailout’ – Greek households, whereas fully two-thirds of the money was used for debt repayment and interest to creditors. Solidarity indeed!

My view: It is tragic that this ‘liquor and women’ quote is the discussion dominating headlines as the EU celebrates the 60th anniversary of the signing of the Treaty of Rome.


Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.