# Who do we owe the money to?



## Purple (30 Mar 2011)

Who are contributors to the EU and the IMF bail out fund and what proportion of the money did they put in?

We keep hearing that the Germans are bailing us out but what's the hard data and is it the Germans in first place or is it someone else through the IMF?


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## Brendan Burgess (30 Mar 2011)

> *Breakdown of the EU-IMF contribution*
> 
> €22½ billion  from International Monetary Fund (IMF)
> €22½ billion  from European Financial Stability Mechanism
> ...



It is suggested that a lot of Irish government debt and bank debt is provided by the German and French banks in particular. So if we default, they would lose out. Sorry, but I don't have the data to hand.


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## Chris (31 Mar 2011)

It all looks a bit hazy. According to this Bloomberg report the details of how the EFSF will be funded and how much members will contribute is still not finalised: http://www.bloomberg.com/news/2011-...ignificant-efsf-paid-in-capital-raise-1-.html

Even the official EFSF site doesn't seem to have this information: 

As has been pointed out on other threads, the Germany is bailing out those of its banks that are exposed to Irish debt. Essentially what they are doing is the same as the Irish state has done with its domestic banks, just on a much smaller scale. In my opinion it is the German state that will be picking up the tab in the end, once an Irish default has become inevitable.


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## Smart_Saver (31 Mar 2011)

*Breakdown of the EU-IMF contribution*

€22½ billion from International Monetary Fund (IMF)
€22½ billion from European Financial Stability Mechanism 
€17½ billion from the European Financial Stability Fundü 
€5 billion in bilateral loans from non Euro zone member states [UK €3.8bn, Sweden €598m and Denmark €393m} 

On this breakdown - does anyone know are these individual contracts or is a unified agreement? Reason I ask is could we re-negotiate (or default) on a certain section and leave others intact?


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## jpd (31 Mar 2011)

Normally loan agreements would include clauses defining "defaulting conditions" which would normally include defaulting on other loans as a break clause - thus it is difficult to default on part of the bail-out, at least that's what I imagine would be the case.

But I don't have any real knowledge of this and I'm not sure that the parties to the agreements would want all the conditions laid out in public.


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## Purple (4 Apr 2011)

Right, I'll try to answer my own question.

From Brendan's link thre three main players are funded in the following ways;

The European Financial Stability Facility is funded by member states proportionate to their capitalisation of the ECB. Details  here

The European Financial Stability Mechanism uses the budget of the EU as collateral to raise loans.
Details hereIt borrows at 2.59%

The IMF is funded in three ways;
From [broken link removed];

_“The IMF relies, principally, on three main sources of funding: (1) loan repayments (interest charges) from debtor countries; (2) gold reserves; and (3) requested resources from its shareholders. The third group of funds largely come from developed, industrialized nations like the United States – the IMF's largest shareholder – and are in three forms: (a) quotas (dues paid by the Fund's member nations); (b) borrowing arrangements (loans the IMF borrows from creditor countries/members or from the private market); and (c) funds the IMF can pull from the Trusts (such as the trust for HIPC – Heavily Indebted Poor Countries initiative) – separate pools of assets that consist entirely of additional contributions (separate and distinct from quotas) made by member countries. It should also be noted that these sources provide for two principal types of costs: the costs of the loans themselves, and the IMF's operational costs. Operational costs range from surveillance, research gathering and technical assistance/advice provided to countries, to internal administrative costs (such as employee wages).”_


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## Chris (5 Apr 2011)

Thanks for the update Purple. So it looks like between Germany and France they will be coughing up almost 50% of the EFSF portion of Ireland's bailout funds, which is why these two countries are being the most vocal.


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## Purple (5 Apr 2011)

Chris said:


> Thanks for the update Purple. So it looks like between Germany and France they will be coughing up almost 50% of the EFSF portion of Ireland's bailout funds, which is why these two countries are being the most vocal.



Yes, but it's still less than 20% of the total.


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## Chris (6 Apr 2011)

Purple said:


> Yes, but it's still less than 20% of the total.



Indeed, but enough to anger those that will have to pay for it, i.e. German taxpayers. As has been mentioned before on other threads, anger about bailouts should be directed at those that invested the money and now will see 100% of it back.


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## RMCF (10 Apr 2011)

And it looks now like there's no point in simply not paying a la Iceland, as we could be taken to court !

http://www.bbc.co.uk/news/business-13029210


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