By Yanis Varoufakis, the Finance Minister of Greece. Originally published at his website
Any sensible person can see how a certain video has become part of something beyond a gesture. It has sparked off a kerfuffle reflecting the manner in which the 2008 banking crisis began to undermine Europe’s badly designed monetary union, turning proud nations against each other.
When, in early 2010, the Greek state lost its capacity to service its debts to French, German and Greek banks, I campaigned against the Greek government’s quest for an enormous new loan from Europe’s taxpayers. Why?
I opposed the 2010 and 2012 ‘bailout’ loans from German and other European taxpayers because:
- the new loans represented not a bailout for Greece but a cynical transfer of losses from the books of the private banks to the weak shoulders of the weakest of Greek citizens. (How many of Europe’s taxpayers, who footed these loans, know that more than 90% of the €240 billion borrowed by Greece went to financial institutions, not to the Greek state or its citizens?)
- it was obvious that, at a time Greece could not repay its existing loans, the austerity conditions for giving Greece the new loans would crush Greek nominal incomes, making our debt even less sustainable
- the ‘bailout’ burden would, sooner or later, weigh down German and other European taxpayers once the weaker Greeks buckled under their mountainous debts (as moneyed Greeks had already shifted their deposits to Frankfurt, London etc.)
- misleading peoples and Parliaments by presenting a bank bailout as an act of ‘solidarity to Greece’ would turn Germans against Greeks, Greeks against Germans and, eventually, Europe against itself.
In 2010 Greece owed not one euro to German taxpayers. We had no right to borrow from them, or from other European taxpayers, while our public debt was unsustainable. Period!
That was my ‘controversial’ point in 2010: In 2010, Greece should have borrowed not one euro before entering into debt restructuring procedures and partially defaulting to its private sector creditors.
Well before the May 2010 ‘bailout’, I urged European citizens to tell their governments not to even think of transferring private losses to them.
To no avail, of course. That transfer was effected soon after with the largest taxpayer-backed loan in economic history given to the Greek state on austerity conditions that have caused Greeks to lose a quarter of their income, making it impossible to repay private and public debts, and causing a hideous humanitarian crisis.
That was then, in 2010. What should we do now, in 2015, that Greece remains in crisis and our people, the Greeks and the Germans, have, regrettably but also predictably, descended into a mutual ‘blame game’?
First, we should work towards ending the toxic ‘blame game’ and the moralising finger-pointing which benefit only the enemies of Europe.
Secondly, we need to focus on our joint interest: On how to grow and to reform Greece rapidly, so that the Greek state can best repay debts it should never have taken on while looking after its citizens as a modern European state ought to do.
In practical terms, the 20th February Eurogroup agreement offers an excellent opportunity to move forward. Let us implement it immediately, as our leaders have urged in yesterday’s informal Brussels meeting.
Looking ahead, and beyond current tensions, our joint task is to re-design Europe so that Germans and Greeks, along with all Europeans, can re-imagine our monetary union as a realm of shared prosperity.
 Whose showing derailed an otherwise constructive discussion on German television.
 First in May 2010 (€110 billion) and then again in the Spring of 2012 (another €130 billion).
“Any sensible person . . .” Ah. But the Troika are not sensible people or they would realize that this Austerity isn’t working for anybody including themselves. It’s destroying the Eurozone. Greece is only the first casualty, but it won’t be the last. At best they will be able to stabilize Italy and Spain until the next financial crisis, and even that is improbable given the death spiral of Austerity induced contraction. Talking about “sensible people” making policy for the Eurozone is like talking about a “philosopher king.” It sounds nice, but has no relation to reality. The Troika will never admit that their policies have caused this crisis and that only ending Austerity can fix it.
The IMF is well known in Latin America as an instrument of American imperialism (in the apocalyptic Cold War … and now post Cold War) … why any European country would even share an espresso with them … is beyond belief!
Contraction does lead to austerity … but having austerity imposed by political fiat … compounds the natural with the expedient. And the expedient is never good in the long run.
Yanis V. had a plan.
But let’s admit, it failed, miserably.
Yanis V. pleaded ( begged ? ) Europe to stop the current head-on crash dead on its tracks in order to engage in a soul-searching process which would allow for Europe’s required re-design process (paradigm shift ?)
But the BB axis (Brussels-Berlin) has fully rejected this Yanis V. proposal… and thus Europe’s trapdoor has slammed shut.
The natural consequence now is having a 950-lb gorilla regarding the arch-famous ‘impossible triangle’ that Greeks and their sisters talk about on every street corner all morning long till lunch time (approx.)
The three mutually incompatible vertices of the Greek ‘impossible triangle’ are :
(1) The Syriza ruling party staying in power.
(2) Reversing the current Troika austerity programs.
(3) Greece staying in the euro.
The uncompliable list of promises made to the Greek people by Syriza has now been replaced by an equivalent uncompliable list of promises made to the Troika.
After 5 years of this, surely onlookers such as us can have some patience. The Syriza Party hasn’t even been in power for 2 months yet. In fact, the first weeks were spent finding computers for offices and negotiating with the troika. The reform list came down on February 24th. It is now March 20th.
Whatever they have planned, I would say: “Patience.”
One final thing, there’s an interesting footnote to the humanitarian bill that passed through the Greek Parliament this week. The food stamp program for the poor is going to come through a smart card, as it does for the American poor. The card will be rolled out in May, and it will contain data linked with every Greek citizen.
One surmises that such smart cards can be used for just about anything.
Who’s issuing the cards, and administering the use and functions? I’m not finding much on that. Camel’s nose, or crocodile’s snout, or something actually beneficent?
There is this larger link, with items that might be of interest to the political-economists among us:
“Greece Solidarity Campaign,” http://greecesolidarity.org/?page_id=2070
The gov’t. The money is going into the system for food stamps. Obviously, the question then becomes retail that can/will accept the cards. That will take much longer than May/June, but eventually, it becomes the beginning of a system for making purchases tied to governmental funding. (Ie outside of credit cards, banking or hard currency).
Out of curiosity, would that facilitate a transition to a new drachma?
The Greek government and its citizens are in no position to be patient and the Troika knows that.
1. The government is utterly out of money and its primary surplus is gone or close to gone. The government is already cutting services.
2. Greece may be able to make all of its IMF debt payments this month, but it’s just about certain it will come short after that. IIRC, it does have one payment due in April, then most assuredly a bunch in July and August. When it defaults, the ECB will have an excuse to cut the ELA (the support to the bank) and some contend it would be required to. That means capital controls and nationalization of the banks. It’s doubtful Greece could finance them ex going back to the drachma (with no primary surplus. TANs or other scrip don’t get you there). That is a de facto Grexit (legally it isn’t but who knows how they tidy that up).
3. A Grexit is catastrophic from an economic perspective for Greece. It is not just the immediate leg down. Greece will lose its membership in the EU, which means it loses agricultural subsidies. It also becomes a vastly less attractive trade partner by virtue of having border controls.
4. Varoufakis believes 3 is even worse than that, because a Grexit will have catastrophic knock on effects. Even if it is not a Lehman event, as many people in finance worry, it will grease the skids for other exits. Some countries, notably Italy and France, could afford to leave without the catastrophic outcomes Greece would suffer. A Eurozone breakup would lead to a Great Depression. That would pull Greece down another big leg and likely turn it into a failed state.
In other words, Greece hits the wall by July at the latest unless it capitulates on structural reforms.
Sounds like Greece the polity is destroyed too if “it” knuckles under to the Banksters. Samson faced a similiar position, if I remember my Bible classes… Speaking of ‘haircuts…’
So Yves… “unless Greece) capitulates on structural reforms, Greece hits the wall by July at the latest.
So it’d be rather silly for everybody to discuss the different ways of how it could possibly be avoided simply because there aren’t any other.
That being the case, Greek grey matter should focus on damage control and survival rather than anything else, right ? Also, possibly a Eurozone break-up would be in the cards.
So, to make a long story short, Greece better capitulate on structural reforms, or else.
Hmmm… You are deeply pessimistic, aren’t you ?
There are people who would benefit from a breakup of Western Europe … qui bono? Who are those people? What is their agenda? Why would you want to assist them? V for Varoufakis!
As many analyses and comments have outlined here … it is wrong to backstop speculators, just because they might lose money. This includes the banker bailouts for “Greece” … or the massive banker bailouts a few years before that for the German and British banks courtesy of the Federal Reserve.
As an outsider looking in and as someone who has had close to 30 years experience of finacial markets, I would concur with the points raised. However, the current state of affiars predominantly lies with Greece. Why? you might ask. The public commentaries made by Greek politicians have not done much to help relaltionships. The problem seems to be that the current Greek government has no idea how to behave on the international stage. That is not to say that they do not have valid points to make, rather the way they are projected.
If Greece realy wanted war reparations why has it not/does not start legal proceedings at the International Court of Justice, assuming this is the correct body to which to turn? Greece and its people need to wake up to the fact that it is not the centre of the universe, that they need to take responsibility for their actions on an individual basis and on a governmental basis and move on from the age old view that they are the victims and that everyone is out to get them – they are not.
I have been coming to Greece for more yeras than I care to remember and I have always been left with the notion that this is the ‘could have been country’. So much of its high quality human wealth has been by divisive politicians and the systems set up to ensure that they stay in government that they have instilled a ‘right of entitlement’ in to its people, an entitlement that is not deserved. The only way forward that I can see is for a government – this government perhaps – to change the selfish attitude of the individual into a collective attitude of the whole. However, with this comes a collective responsibility – that interests of the state are protected and that they out way the demands of the individual.
SIngapore is probably the best example, where the population regards it a privilage to work for the state, unlike here where people regard it as a right to work for the state and where the state embraces and courages the competition of the private sector as a means to drive itself.
Please. The excess mortality caused by Austerity must run in the tens of thousands. It also did nothing toward furthering its stated goals as every economist even lightly touched by Keynsian theory predicted. That’s why the Eurozone governments demand the Greeks adhere to the old program and do so publicly. Who wants to admit to having killed tens of thousands for nothing? And this is the one lie this Greek government cannot tell.
So no the problem lies not in Greece.
The debate between austerity vs. non-austerity is fundamentally wrong to begin with; it’s akin to asking which arrangement of chairs would best suit the Titanic’s deck. Sure there is an arrangement that would keep people more or less comfortable as the ship is tilting, but given a few hours everyone is going to drown freeze to death in icy water anyway. At this point the Greeks, and everyone else, should be asking whether or not it’s a good idea to start getting the life boats ready. But because of the general lack of insight and wisdom that afflicts the human race, we’re still far from that it seems.
That’s a fine view to have, but it doesn’t reflect how Greece is being treated. Greece’s default on their debts – which will eventually be entirely necessary because they are unpayable – is being treated as an impossibility, tantamount to the apocalypse.
If you really want Greece out of the spotlight, let them default and become a bankrupt state. I guarantee you won’t hear of Varoufakis again.
“…. need to take responsibility for their actions on an individual basis ….”
So you’re saying the German banks should have taken their losses, instead of shifting them to European taxpayers and then demonizing the Greeks?
^ Bravo! This point needs to be made over and over again to counteract the current story of the fault lying with lazy, irresponsible Greeks. The German and French banks were the irresponsible ones – they made bad loans our of greed, and they ought to have been made to swallow their losses.
I hope that your question is rhetoric. Of course, it is the most important aspect of a capitalistic system that risk takers have to take their losses when they did not use sufficient diligence or were subjected to bad judgement. You cannot continuously transfer the costs associated with or resulting from risk via various mechanisms to the general population without promoting a model of thievery and fraught which in turn and given sufficient time will produce a explosive mix for society. It is therefore urgently required that e.g. banks and large corporations are in a position to digest such losses which requires the increase of risk capital (share capital). Unfortunately, central bank policy promotes exactly the opposite development.
This same contributor ‘Klaus’ (‘Klaus Kastner’) has a Greek english-language blog called Observing Greece in which he holds up the Pinochet ‘miracle’, in which he apparently took part on behalf of a bank, as the perfect model for Greece to follow. I recognize the style; also he has been making the same slimy points (Greeks’ fault etc.) for 5 years, and recently. I highly recommend his blog as a high level example of the international trolling underway in the EU.
a) re: the war reparations, http://www.reuters.com/article/2015/03/19/us-germany-greece-war-idUSKBN0MF1E320150319 (reuters should not be suspicious of pro-Greek). Not everybody agree that things got settled. Still, more important than this, is the fact that “rules” are not set in stone, and that talking about rules is unlikely to solve problems, as the war reparations example illustrates.
b) re: the way Greek Government is projecting, there is a lot of misinformation, and also misunderstandings, as the languages spoken by both parts are quite different (recently I posted here about Domination systems (https://www.nwcompass.org/anger_and_domination.html) ).
Sieg Heil, Klaus!..
Not buying this argument.
Behave? Read Varoufakis’s words above. Do we need any more reason to understand why he is hated? Varoufakis is telling them that their strategies and all their ideologies are wrong. And you are chalking this up to behavior? No. It has nothing to do with that. It has everything to do with his willingness to offer a version that is completely counter to their own.
I read a German view of the problems today in which V’s middle finger from 2013 is held as an example of bad behavior. Please. The horrible Greek comments (of which I count only one, Kammenos’s comment about migrants with papers) are not at all in the range of Schauble’s Grexident or even worse the Eurogroup head talking of capital controls. Those are statements that are meant to cause bank failure in Greece.
If you want a balanced view of Greek war reparations, I would urge you to look at this: http://www.macropolis.gr/?i=portal.en.the-agora.2371&itemId=2371
So Dan, you say that capital controls possibly soon in Greece just as they were imposed onto Cyprus (and still in force) according to Dutch Finance Minister Jeroein Dijsselbloem, head of the Eurogroup of Finance Ministers, right ?
So we’d have two euros. Great. (Go figure !)
Euro #1 is the one you and I know and count on existing for many years to come (really ?)
Euro #2 is the current Cyprus euro + maybe the Greek euro, only good within those two countries, not outside.
So, the Greek ‘impossible triangle” keeps growing beyond manageable size as it ticks away its remaining shelf-life hours ever faster.
The reason it is a privilege to work for the state in Singapore is that Lee Kwan Yew went to great lengths to make sure Singapore had clean government. Top government positions pay at the same level as top private sector professional jobs. Please tell me where else can a top bureaucrat make what a white shoe law firm partner makes. Singapore also has extremely tough internal audit of government functions.
“How many of Europe’s taxpayers, who footed these loans, know that more than 90% of the €240 billion borrowed by Greece went to financial institutions”.
*Thanks for making the case for Yanis Varoufakis, and Greek gov position, within your great blog. I appreciate the great information provided here and I certainly agree that the money transferred to Greece went to financial institutions, mostly EE ones who were not exactly careful with depositor’s money… Little sympathy for their action here.
One should be reminded thought that some of the money transfered to Greece was not always rich citizens’ money by the way or some sort of “not-mine big money”. A very significant part of it is money saved by cohorts of prudent middle-income North-of-EZ-savers either directly of via pension funds…
I understand that their case, prudent EZ middle class, with a strong embedded preference to “save rather than build” as opposed to their South-Of-EZ counterparts, they were used to a relatively robust monetary and banking environment for decades, is no NC readership.
But is bankrupting the banks where those prudent depositors had their savings is THE panacea? That most certainly depends on your standpoint. But of course, whatever the trick, the tax-payer would have to foot the bill in this case as well… The question is of course: who is bringing the bill?
But is bankrupting the banks where those prudent depositors had their savings is THE panacea?
There’s a huge difference between a state insuring the deposits of individual and prudent depositors and using public money to prop up large, imprudent, irresponsible, and criminogenic banks (and especially their criminal managers), who to continue to prosper despite their manifold and clearly visible faults.
Depositors at core banks should indeed be bailed out, not the banks themselves as is now the case: no one is bailing out Greece, Greece is being used as a tool by the ECB to bail out failed core banks. That failure is the fault of core bankers who approved obviously un-payable loans to Greece, particularly the 2010 “bailout” that Greece could obviously never pay back. Before 2010 you could blame that on corruption in Greece, after 2010 it is clearly corruption outside of Greece’s control.
I wouldn’t posit it as a case of Northern prudent savers versus Southern spendthrifts. Italy and Greece have bad sovereign debt.
But both countries are at the very top of the charts in Europe when it comes to private savings. Look at Greek and Italian private borrowing to GDP in 2008-2009 (prior to the fall in GDP for Greece which took their total from 40% of GDP to 80%). Very low. There are countries in Europe where the private sector debt is at 200% top GDP.
One could even make an argument that the lack of credit cards and debt spending privately in Greece is intimately linked with tax evasion.
Sorry, the Greek grasshopper meme of irresponsible, non-savers is propaganda.
Greeks had the EU’s lowest mortgage and credit card take-up and debt, and are & have always been, among its top 3 savers. Google MacroPolis and OECD for facts, please. This pattern applies also in Italy and of course the Balkans.
Au contraire, it is EU northerners who rank highest for private debt lowest savings.
re the ‘BLAME GAME’…
The “blame game” that Yanis V. is so concerned about is very much real as the forcefull consequence of millenary differences that can’t be solved with an Excell worksheet as Europeans have tried to do.
The path taken by the Brussels-Berlin tandem has lost track of the original idea which was to avoid wars, not to induce new ones.
So Europe should have tried to conform a solid Free Trade Zone, period.
A Customs Union would have pushed it beyond its ‘natural’ limits.
A Monetary Union was plain crazy without first having political union, fiscal union and banking union firmly in place.
You see, ‘nation-building’ is not as easy as George Bush made it look to be to his fellow Americans.
@ Georgie Welchade
re: the Blame Game
“In practical terms, the 20th February Eurogroup agreement offers an excellent opportunity to move forward.”
Actually it was a truce, and we’ll see how long it lasts. They have declared war on you. When are you going to answer the questions about this deal posed by Costas Lapavitsas?
The bailout was largely used to repay Greece’s debts, with those debts largely held by European financial institutions. But to call these institutions ‘speculators’ is perhaps somewhat unfair. It is worth remembering that the Greek government produced fraudulent financial figures for many years, greatly understating its actual indebtedness. The banks purchased Greek debt on the basis of these figures i.e. had they known the truth, they probably would not have purchased the debt. The blame for this must largely lie with Greece.
Last I checked, the Italians, the French, and the Germans fudged their Maastricht numbers, too. It makes sense that fraud is ubiquitous, since the neo-liberals run the show, there as here, but again, there seems to be nothing exceptional about the Greeks, except that they are weak enough to be made an example of.
No, what we’re supposed to think is that the profligate (and perhaps somewhat dusky hued) Greeks are too ham-handed to properly (Germanly) run their own affairs, but they are nonetheless sufficiently competent at fooling these financial institutions into believing fudged numbers.
Notice how these trollish “mostly blame the Greeks” comments usually end in the same way, e.g.: “The blame for this must largely lie with Greece”?
Guys, Lambert is correct, again.
Just a reminder
…”…the whole issue is not even about Greece… the reality is that SPAIN, ITALY, and ultimately even FRANCE are in or approaching similar financial straits as Greece…”… (also Portugal, I might add)
…”… At that point you’re talking about well over $3 TRILLION in sovereign debt, which is likely posted as collateral on well over $100 (one hundred) TRILLION in derivatives trades…”…
You follow ?
…”… The blame for this should beplaced largely…”…not ONLY on Greece but ALSO on the BB-axis as per my comments above
The situation in Greece was very different to fudging. ‘Fudging’ means using some gimmick or trick to produce a number which, while technically correct, is misleading. Greece just faked the numbers, and on a very large scale. The banks lent on this basis. They were wrong, but I wouldn’t call it ‘speculation’. The yields on Greek debt were low and it was – again on the basis of the fake numbers – perceived as low risk i.e. a low risk / return investment, not something a typical speculator would purchase. The fault largely lies with the Greek government.
Cut it out James.
It was GOLDMAN SACHS (know them ? the Germans do, so should you) that did the cooking / fudging (at a price, of course)
James, the reason that the Germans now torture Greece out into grexit is because Syriza will not ever ratify the Trans-Atlantic Trade and Investment Partnership (TTIP) the international trade agreement that both Germany and the US are so keen about.
Georgie on TTiP
You seem to believe that the banks are some kind of innocent victim. The Greek crisis is largely due to the banks. As reported in the NYT (http://www.nytimes.com/2010/02/14/business/global/14debt.html?pagewanted=1&hp&_r=0) in 2010:
There is no reason the banks shouldn’t have taken their losses in 2010. The politicians that bailed out the banks and put the burden on taxpayers of Europe should also bear a large part of the responsibility.
I’m afraid you’ve let the banks off the hook.
Read this: http://www.risk.net/risk-magazine/feature/1498135/revealed-goldman-sachs-mega-deal-greece
Taibbi has it exactly right, though I might have chosen even uglier imagery:
add, Tapeworms for tentacles.
And to all you guys (mostly) in your bespoke offices in your trade centers and banking phalluses, have you got a personal exit strategy? I bet you do! Too bad you’ve been so greedy that you have left pretty much none for the rest of us, other than “burn it all down!”
One hopes that there might be some genius who will pen a kindly and sensible restatement of what humanity is all about, for the long run, something that might build on that aspirational universal that goes under the heading (without ironic gloss) “The Golden Rule.” Live simply, that others may simply live? Eschew complexity and anything that breeds huge risks of mortal unintentional or designed consequences? Unless one completely understands a system, one has no right to tinker with or attempt to re-engineer it? He who imposes the risks, eats them, and pays all the consequences and damages?
James: ” …had they known the truth”
As has been stated by others, the Greek government used methods that were well-known and well-worn.
Banks hadn’t “known the truth”? What evidence do you have to support that counter-intuitive notion? Your whole argument is founded on an entirely unsubstantiated and highly unlikely assertion.
George & Dan – I don’t think these points undermine my conclusion. The TTIP is irrelevant to the Greek situation. Goldman Sachs deserve condemnation for many things, including potentially facilitating part of the Greek government’s fraud. But the main responsibility must lie with the Greek government…
Conclusory and undocumented and unconvincing statements, however often repeated, don’t become Truth. Or Wisdom. Except where Murdoch rules…
It totally disproves what you were saying.
You call it fraud, and yet the article shows all these things:
1. Greece was under the threshold for eurozone admittance prior to the Goldman Deal.
2. The Goldman deal was legal and well known and publicized and all banks knew of it and Eurostat knew it.
3. the Goldman deal was done by design precisely because the FinMins of Europe had used such vehicles to hide debt in the past.
4. Many EU countries did the same deal, including Germany.
The deal was well-known by the banks. It is convenient for banks to say “We didn’t know” so that the European taxpayer assumes all the risk for the loans (loans, by the way, that are largely the result of vendor financing scams involving military industries and Greek bribes).
Look, there are huge contingent liabilities and debts taken on all over Europe that are NOT considered part of a nation’s sovereign debt. Look at the crash of the Austrian bank recently, which was a contingent liability/debt held by the public sector. The American hedge fund that invested in the bank (Lone Star Fund) knew precisely that the bank was in bad shape, because that fund excels at picking up junk and extracting what it can, but it jumped in with both feet knowing that the public sector had underwritten and guaranteed the losses. Much to Lone Star’s dismay, the public sector is now allowing the bank to go bust, and it’s refusing the losses.
So, the banks always know about the liabilities. They rely on the public sector to pick up the losses. When the banks are protected (German, French) the public sector picks up the losses. When you can stick it to a hedge fund out of Dallas, you do!!
“But the main responsibility must lie with the Greek government…”
…to be clear, the former Greek government.
The TTIP irrelevant ??!!
You can’t be serious Dan…
Ask the White House you innocent soul.
The TTIP – Trans Atlantic Trade & Investment Partnership is BIGGGGGGG STUFF for both the US and Germany (plus a few Northern others) as Plan “A” of their currently predominant 21st. century geo-political strategies.
But Plan “A” has a limited shelf-life because, should the TTIP not be approved soon enough (and as events are picking up speed along very different lines everywhere else, think BRICS) at least some parts of Europe will have to revamp their Ostpolitik to the tune of Cossack prisiadki folk music rather than the American fox-trot.
Such Plan “B” is roaming around the scene ready to kick-in at short notice.
Russia’s role (or non-role) so far in Greek affairs could very well be indirectly related to the above.
Mind you, team Russia usually plays good chess.
It probably doesn’t matter if TTIP or TPP fall because TISA is being negotiated in Geneva which pretty much covers the same ground and countries. I have a suspicion that TTIP/TPP are the Trojan horses.
Which Greek government one might reasonably ask at this juncture. And to what extent are citizens to be held responsible for governmental back-room deals and malfeasance. Camus described democracy as system in which “we are all guilty.” Somehow, I don’t think Greece or any other country for that matter has reached this level of shared responsibility. As a citizen of the U.S. I certainly don’t want to be held responsible for the invasion of Iraq, the Vietnam war (the list could go on), and as for being held responsible for the shenanigans of our financial sector in collusion with our political elites, and I know that in my role as one of the little people that I have been made to pay a portion of the price but I certainly don’t assume a share of the guilt.
Two days ago a controversial article in the prestigious German magazine “Der Spiegel” shed new light on the relationship between Greece and Germany. Some German historians show that indeed Greeks have the right to claim the repayment of WW II “forced” loans contracted by Nazi Germany from the Greek government.
The cover of the article stirred controversy too.
Perhaps it would be useful to post the whole article on this blog.
We cannot do that. It is copyrighted material.
The issue with the WWII claims is that Greece has not pursued it seriously until now. That does not make the claim any less valid, but it does not belong in the conversation about the bailouts. Germany has clearly not been receptive since they got a brush-off the last time they cleared their throats on that matter. The Greeks need to file a claim in court, and say now that they are starting that process. This needs to go on a separate track than the conversations with the creditors.
The big problem with going the litigation route, which is probably the only way Greece sees the money, is that it will take years, when the government really needs the dough now.
Don’t know if you will get to see this Yves but I will write it anyway.
The issue with the WWII claims is that Greece has not pursued it seriously until now.
Members of Greek government have pursued it. But the German government always rebuffed them. I have seen it written else were with certain official years marked. It was put on hold for German reunification with the promise to continue payments after it. I think they had made an initial payment. Then after reunification Germany just refused and continued to do so when ever a Greek official brought it up. Don’t know what a small powerless country like Greece could do to ever have gotten Germany to do anything.