The Greek bailouts so far have really only bailed out Greece’s creditors. None of the money stays in Greece to help it rebuild its economy and alleviate the suffering of the Greek people. But European Central Bank President Mario Draghi has the power to pump money into Greece by creating more euros and buying up Greek government debt. Will Draghi use monetary policy to save Greece?
An interesting historic fact: I mentioned a few days ago that in the early 2000s Goldman Sachs helped Greece hide its mounting debt off-the-books, and in the process doubled that debt. Who was then Goldman’s Vice Chairman and the Managing Director of its International Division? Mario Draghi.