Greecing the wheels

[Gob]

The Greek government says Germany owes Greece nearly €279bn (£204bn; $303bn) in war reparations for the Nazi occupation during World War Two.

It is the first time Greece has officially calculated what Germany allegedly owes it for Nazi atrocities and looting during the 1940s. However, the German government says the issue was resolved legally years ago.
Greece's radical left Syriza government is making the claim while struggling to meet massive debt repayment deadlines.

Reacting to the Greek claim, German Economy Minister Sigmar Gabriel said it was "dumb" to link Greece's bailout by the eurozone with the question of war reparations. "To be honest I think it's dumb. I think that it doesn't move us forward one millimetre on the question of stabilising Greece," he said.

He said ordinary Greek citizens however deserved "huge respect" for their economic sacrifices under the bailout programme. The Greek elite had "plundered" the country, he complained.

[rubato]

They have a point:

http://en.wikipedia.org/wiki/German_rep ... rld_War_II

Recipients
Greece
Excerpt Akte R 27320, page 114 (political archive of the German Federal Foreign Office)

In 1942, the Greek Central Bank was forced by the occupying Nazi regime to loan 476 million Reichsmarks at 0% interest to Nazi Germany. In 1960, Greece accepted 115 million Marks as compensation for Nazi crimes. Nevertheless, past Greek governments have insisted that this was only a down-payment, not complete reparations. In 1990, immediately prior to German reunification, West Germany and East Germany signed the Two Plus Four Agreement with the former Allied countries of the United States, Great Britain, France, and Russia. Since that time, Germany has insisted that all matters concerning World War II, including further reparations to Greece, are closed because Germany officially surrendered to the Allies and to no other parties, including Greece. On Sunday, February 8, 2015, the Greek Prime Minister, Alexis Tsipras appeared in front of the Greek parliament and officially demanded that Germany pay further reparations to Greece.[1] On April 6, 2015, Greece demanded Germany pay it the equivalent of $303 billion in reparations for the war. Germany replied that the reparations issue was resolved in 1990.[2]

A very good point, apparently.


yrs,
rubato

[Lord Jim]

Pointless grandstanding...

In fact worse than pointless, counter-productive, because the only thing this nincompoop is going to accomplish with this is to annoy the very people upon whose largess and forbearance he is dependent on to bail his country out from the economic mess created by it's own governmental incompetence and corruption.

[Crackpot]

Not really the extended austerity enforced by the Germans is crippling Greeces economy. Greece is at appoint where exiting the Eurozone is a viable option. This is a final gambit for austerity relief. Call it reparations call it good economic policy (you can't get water from a well that's dry). One thing is clear they ain't getting jack shit it they force Greece out of the Eurozone.

[rubato]

We showed mercy and compassion in PAYING for the reconstruction of Germany after WWII. If we had acted then the way the Germans are acting now they would still be living in hovels herding pigs among the rubble.

First of all, Greece is right, there is a specific historical debt which Germany was allowed to get away without paying. If the Germans have got their sharp little pencil out demanding payment for the piper then the Greeks are entitled to do the same. But the point is not only that there is red ink on their accounts and they should mensch up and pay it but there is a larger point that the world is only going to work when there is a sense of proportion and mercy. The point of capitalism cannot be to totally beggar other countries and deny them any hope for the future; which is the current German strategy. We could have used our advantage to rape the rest of the 1st world after WWII economically, but we didn't. We gave Europe and Japan the means to re-start their industries and their economies.

Unemployment in Greece is over 25%. Seven years after the collapse. Demanding even worse unemployment is pointless brutality. And further cuts in government spending (after very deep ones) will certainly cause greater unemployment and a longer depression.

Frankly, it would make more sense for Greece to exit the EU and simply ignore the loans if the Germans don't do the right thing here.


yrs,
rubato

[Crackpot]

I agree with Rubato.

There I said it.

[Joe Guy]

Okay... There's all kinds of things wrong with what you just said.

[BoSoxGal]

Yes, Germany should give Greece a jubilee year; forgive the debts and invest in the country. It would be the just thing to do.

[Lord Jim]

simply ignore the loans

Excellent suggestion...

And just who pray tell, will then loan them the money that they will still need to continue to borrow to keep their country afloat, after they announce they will no longer pay the money they already owe?

Certainly not the IMF or The World Bank, or any other Western dominated lending organization or Western country...

The Russians? They ain't got the cash. The Chinese? Last time I checked, the PRC wasn't in the charity business; they put their money in places where they know they can get a reliable return on investment. (Like US T Bills...)

Of course there's another solution...

Once they're out of the EU they'll have control of their own currency again, so they can just print up all the Drachmas they need...

And they'll need quite a lot of them,...Hyper inflation anyone?

Of course, if they go that route, the upside is that it will be a great time for Americans to take a vacation in Greece. You'll probably be able to book a room in the finest hotels in the country for around 59 US dollars a night ...

The new Greek Drachma will make the Haitian Gourde look like a great investment currency...

If I were a German, my response to a Greek threat to leave the EU would be, "don't let the door hit you in the ass on your way out."

Why should they continue to pour good money after bad? The Germans didn't create the fix the Greeks are in; their own incompetent and corrupt governments did.

[Lord Jim]

Greece has long lived beyond its means and spent much of the last two centuries defaulting on its debts. Joining the euro was meant to put an end to all that. However, it merely seems to have exacerbated its problems.

It was no surprise to any economist that the European Union, at first, refused to allow the country to join the euro when the new currency started in 1999.

Quite simply, its debts were too high and inflation was out of control. By 2000, the EU finally allowed it to join, though there were suspicions at the time that Greece was operating a "limbo dance" – squeezing its figures to hit the stringent euro criteria, only for them to flip back to dangerous levels once it had entered. Indeed many believe Greece simply lied about its figures to gain entry.

At the time its inflation was 4 per cent, much higher than the European average, and was suffering from one in ten people out of work – a higher figure than currently in recession-hit Britain.

By joining the euro, however, it suddenly enjoyed substantially lower interest rates, because the it was able to borrow in euros. Whereas during the 1990s, Greece had frequently had to pay out 10 per cent or more (18 per cent in 1994) to borrow money, its rate fell dramatically to 3 per cent or 2 per cent.

Ben May, Greek economist at think tank Capital Economics, said: "Their mistake was to go out, borrow money and use it to fund huge wage growth, rather than pay down its already substantial debts."

Greece went on a spending spree, allowing public sector workers' wages to nearly double over the last decade, while it continued to fund one of the most generous pension systems in the world. Workers when they come to retire usually receive a pension equating to 92 per cent of their pre-retirement salary. As Greece has one of the fastest ageing populations in Europe, the bill to fund these pensions kept on mounting.

Tax evasion, endemic among Greece's wealthy middle classes, meant that the Government's tax revenues were not coming in fast enough to fund its outgoings. [I wonder what the tax evasion rate in Germany is?]

Hosting the Olympics in 2004, which cost double the original estimate of €4.5 billion, only made matters worse.

By the start of this year Greece's debt had hit €300 billion, more than the entire value of its annual GDP. This is unlikely to fall quickly, as its current budget deficit – how much its borrowing exceeds tax receipts – is running at 13.6 per cent of its gross domestic product, twice the Eurozone average.

Things have come to a head because the international rating agencies have cut Greece's credit rating, concerned that it will default on its debts. This has the immediate effect – just as when a credit agency cuts a consumer's rating – of pushing up the cost of its borrowing, setting off a vicious spiral.

Hosting the Olympics in 2004, which cost double the original estimate of €4.5 billion, only made matters worse.

By the start of this year Greece's debt had hit €300 billion, more than the entire value of its annual GDP.[this was in 2010] This is unlikely to fall quickly, as its current budget deficit – how much its borrowing exceeds tax receipts – is running at 13.6 per cent of its gross domestic product, twice the Eurozone average.

Things have come to a head because the international rating agencies have cut Greece's credit rating, concerned that it will default on its debts. This has the immediate effect – just as when a credit agency cuts a consumer's rating – of pushing up the cost of its borrowing, setting off a vicious spiral.

http://www.telegraph.co.uk/news/worldne ... -hard.html

So, basically through grossly irresponsible public policy over a long period of time in a whole range of areas; profligate public spending, failure to collect taxes, and cooking the books, the Greeks and the Greeks alone have been 100% responsible for the fix they find themselves in today. Their irresponsibility long predates the financial downturn in 2008, and was the primary factor in making them ill equipped to deal with it.

Instead of using the interest rate advantages that entry into the Eurozone provided them to set a more responsible fiscal course, they took that as an opportunity to become even more reckless....

Yeah, no doubt about it, those mean old Germans who are responsible for this...

Given the kind of irresponsible and incompetent people that the Greeks choose to run their country, (and this latest garbanzo seems like the worst of the lot) and their culture of mass tax evasion, if the Greeks decide to go it on there own, they are the ones who will most likely wind up " living in hovels herding pigs among the rubble"...

[Crackpot]

The problem is you can't fix evry problem overnight and the Eurozone countries knew of these problems before they admitted them but allowed them in anyway. Fact is the draconian austerity measures Germany is insisting on is eliminating all chance for Greece to grow and be better able to pay off thier debt. If Germany would allow for some austerity relief I'd bet this reparations stuff would disappear.

The fact of the matter is austerity is the reason the Eurozone is still dragging almost 10 years after the financial collapse. Fact is as much as it galls most of the population the US govt showed a rare bit of insight when they let the shitheads that caused the collapse off the hook because fact is we needed them to fix the problem.

What Germany is effectively doing is finding themselves in a hole and breaking the shovels that got them there.

And animal you are severely discounting the effects a Greek exit from the Euro will have the stability of the Euro.

[rubato]

Greece has not been well governed and the government of Greece has made poor decisions (one of which is to allow the top 1% to not pay taxes). The government of Greece has been captive to the top 1% who benefitted from the loans and who now escape the pain of them by shifting it to the bottom 90% who are doing the suffering.

"Greece" has not been living beyond its means, the ruling classes have.

Now Greece is a Democratic country and the voters share some blame in allowing it all to have happened, but they have suffered very heavily already, much more than their due. It serves no moral or economic purpose to condemn them to (at minimum) 20 years of hopelessness, of grinding poverty, of wasting the skills of generations of College graduates who will have no hope of getting a job or a career; all of which, if you can do arithmetic, you will know will extend the suffering for generations more after that.

The German banks had a responsibility not to make bad loans which they knowingly did here thinking that there would be no risk. They were wrong in failing to act like businesslike and responsible lenders and deserve to pay the price for their stupidity and greed.




yrs,
rubato

[rubato]

"...

The fact of the matter is austerity is the reason the Eurozone is still dragging almost 10 years after the financial collapse. ... " .

True, Paul Krugman has been saying that for 7 years and events continue to prove him right.

yrs,
rubato

[Lord Jim]

The German banks had a responsibility not to make bad loans

So they should be encouraged to make more of them....

[Crackpot]

How the fuck did "Jim" autocorrect into animal?

[Crackpot]

The German banks had a responsibility not to make bad loans

So they should be encouraged to make more of them....

It's more a question of the loaner eliminating the means to be paid back.

[BoSoxGal]

How the fuck did "Jim" autocorrect into animal?

Autocorrect's Freudian slip?

[Lord Jim]

How the fuck did "Jim" autocorrect into animal?

Autocorrect's Freudian slip?

I was wondering how long it would take for somebody to swing at that fat pitch...(I now know the answer: "not long"... )

Thanks CP; I owe you one...

[Crackpot]

Don't blame me blame Apple.

[Lord Jim]

Apple didn't post about it...