"Many billions of euros flowed into Greece over the last 30-odd years and one cannot help but wonder where all that money ended up going and how it was spent" --- asks Alexis Papachelas in this commentary. Well, so difficult the answer is not, at least not in general terms.
From 2001-10, a net amount of 283 BEUR flowed into Greece as debt (foreign debt increased from 121 BEUR at Y/E 2001 to 404 BEUR at Y/E 2010). The amount of equity, i. e. foreign investment, which flowed into the country is neglible. EU subsidies which flowed into the country are included in the current account.
Of the 283 BEUR which entered the country, 197 BEUR turned around and left the country as current account deficits. Here, however, it is important to note that the 197 BEUR is a net figure, being the net of inflows and outflows. When looking at the inflows/outflows separately, the numbers become quite staggering.
The inflows, i. e. revenues from abroad, were 510 BEUR. Not a piece of cake for an economy the size of Greece's. They consisted of export revenues (146 BEUR), tourism (268 BEUR), other income (34 BEUR) and current transfers (62 BEUR). EU subsidies are included in the latter.
Now to the staggering outflows, i. e. expenses abroad. A total of 707 BEUR left the country in the form of imports (446 BEUR), payment for services (131 BEUR), other expenses (96 BEUR) and current transfers (35 BEUR).
So where did all the money go? 197 BEUR out of the 283 BEUR which entered the country as debt went back to foreigners, be they exporters to Greece, providers of services for Greeks or whatever. Obviously, if over-/underinvoicing took place in Greece's foreign trade, a good portion of that money went into foreign private accounts of Greeks.
That leaves 86 BEUR unaccounted for (283 BEUR minus 197 BEUR). Well, they stayed in Greece, at least initially. They either disappeared in the budget deficit and/or ended up as liquidity in the Greek money market. The money which ended up in the money market could be traced back to borrowers but what some of those borrowers did with the money is undoubtedly untraceable. Presumably, some of it ended up where it was not supposed to end up.
The money which disappeared in the budget deficit would theoretically be traceable. In practice, one would find that it did not only go to wages/salaries and pensions but also into public orders/works. Now, where the latter money ended up, that would be interesting to know. Some of it undoubtedly went to the delivery of public works but a lot of it presumably ended up where it was not supposed to end up.
Does Greece have something to show for the huge amount of money which flowed into the country from 2001-10? I would think yes. There are new infrastructures all over the country; cities and villages today look a lot more 'developed' than 15 years ago. Whether what Greece has to show is worth 283 BEUR, well, that question can obviously not be answered in the affirmative. As I tried to explain above, far to much money ended up in places where it should not have ended up and too little of it went to places where it would have been wisely invested.