The West German debt writeoff

France24 — “Lessons from 1953: The debt write-off behind Germany’s ‘economic miracle'”:

West Germany’s debt at the time was well below the levels seen in Greece today. But German negotiators successfully argued that it would hinder efforts to rebuild the country’s economy – much as Greek governments have in recent years, in vain. Under a crucial term of the London Agreement, repayments of the remaining debt were made conditional on West Germany running a trade surplus. In other words, the German government would only pay back its creditors when it could afford to – and not by borrowing even more money. Reimbursements were also limited to 3% of export earnings. This gave Germany’s creditors an incentive to import German goods so they would later get their money back, thereby laying the foundations of the country’s powerful export sector and fostering its so-called “economic miracle”.
[…]
Back in 1953, the money Greece gave up included a loan extorted during the gruesome Nazi occupation of the country, when thousands of resistance fighters and civilians were murdered and hundreds of thousands starved to death. Even before Syriza’s electoral triumph, Greek newspapers were awash with calls for Germany to repay the loan, the exact amount of which is a matter of historical dispute. Estimates range from $24 billion to five times the amount. While few Greeks expect Berlin to pay up, many believe that Germany was let off the hook after the war and should now be more generous in Greece’s hour of need.

 
See also: A Brief History of the Greek Debt Coverup – Arsenal For Democracy
And: Greece’s Syriza, Germany, and the Gordian Knot – Arsenal For Democracy

Bill Humphrey

About Bill Humphrey

Bill Humphrey is the primary host of WVUD's Arsenal For Democracy talk radio show and is a Senior Editor for The Globalist. Follow him @BillHumphreyMA on twitter.
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