The New York Times reports that Greece has reached a bailout deal. The deal is worth 110 billion euros, or $146 billion over three years. In return, Greece will have to reduce its yearly deficit to 3% of GDP.
Who benefits from the bailout? Those institutions that hold bonds issued by Greece, of course. For example, Greece owes French banks some $75 billion. That explains why France was pushing so hard for a bailout of Greece. What about the other PIIGS? That is, what about Portugal, Ireland, Italy, Greece, and Spain? Who do they owe debt to?
The New York Times has created an interesting visualization just to answer that question. While it is easy to look at one country and see who they owe money to, we see a web of debt appear when the Times graphs the bigger picture.
Banks and governments in these five shaky economies owe each other many billions of euros — converted here to dollars — and have even larger debts to Britain, France and Germany. Arrow widths are proportional to debt amounts.
