Greek bailout costs less than Hypo Real Estate: German economist
The financial markets are overreacting to the Greek crisis and a bailout of Greece by the EU would cost less than Germany paid to rescue its Hypo Real Estate bank, a top German economist said here Thursday.
"The markets currently see things very one-sidedly," Deutsche Bank's former chief economist Norbert Walter said in an interview with the Austrian daily Der Standard.
"Greece is being scapegoated. The market reactions are generating problems, which are primarily built up on speculation, but which then turn into reality," Walter said.
"Hypo Real Estate cost Germany more than 100 billion euros (132 billion dollars). Greece is therefore smaller than what we've already experienced," Walter said.
Hypo Real Estate collapsed in late 2008 amid a global crisis owing to investment mistakes made by its German-Irish subsidiary Depfa.
The bank received a rescue package worth a total of 50 billion euros from a consortium that included the federal government, the central bank and private institutions.
The property lender has also benefited from access to a total of 102 billion euros in state loan guarantees.
© 2010 AFP