
Germany Deserved Debt Relief, Greece Doesn't - hencq
http://www.bloombergview.com/articles/2015-01-27/germany-deserved-debt-relief-greece-doesn-t-i5fdca2y
======
irixusr
The nazis stayed in power but wore the clothes of democrats:

[http://www.spiegel.de/international/germany/from-
dictatorshi...](http://www.spiegel.de/international/germany/from-dictatorship-
to-democracy-the-role-ex-nazis-played-in-early-west-germany-a-810207.html)

And, for all syriza's faults (they're socialists :p), they're not responsible
for the mess: they were never in power. Therefore, they were never corrupt or
fed the system of clientism.

I don't like socialism, quite the contrary. But German banks made bad loans.
German banks get bailed out by _all EU_ governments, nationalizing their
losses [ _1_ ] German bank survive stronger than ever. Sounds more like a
moral hazard [ _2_ ] for the banks than free market capitalism to me.

1\. ironically enough, Portugal, and All the other PIIGs, holds greek bonds
because they bailed out German banks in a sign of "European solidarity".

2\. It's easy to make money when you gamble with the House's money. In the US
when (small[ _3_ ]) banks fail, their assets are sold, their depositor's
assets insured up to 100k and the system continues nicely.

3\. I realize congress and friends chickened out with the "too large to fail".
But TAARP was much larger than what the Greek bailout ever needed to be. And
the EU's gdp is larger than the US'

~~~
drzaiusapelord
> But TAARP was much larger than what the Greek bailout ever needed to be. And
> the EU's gdp is larger than the US'

TARP paid itself off as the US economy is almost always a sure bet. The
chances of the Greeks paying off their debt is pretty much zero. These are
very different situations.

~~~
irixusr
Are you sure the chances are zero?

Greece has made a lot of sacrifices over the past five years and could have a
surplus, if not for the interest rate of the debt.

So restructure it like the German one was: long payment plan, low interest and
payments dependent on exports. Then they'll pay it off too!

Btw, the interest payment is the reward for risk. The risk is default of the
lender and inability to access credit for the debtor. German banks gambled
badly, tough.

------
VieElm
The Marshall plan was preceded by the Morgenthau plan which would have
destroyed Germany's ability to ever create war again, reducing Germany to
subsistence level farming. The Allied occupiers actually began destroying the
German infrastructure, but it didn't work out however as Europe's economy had
historically depended on Germany's industrial base and America and Western
Europe needed to counter growing Soviet power in the first beginnings of the
cold war.

It other words it had nothing to do with "deserved", Germany was rebuilt out
of strategic necessity to face two looming threats to international stability
and peace.

~~~
chm
I'm currently playing my first game of Diplomacy. Anyone with the slightest
interest in world politics should play it once. It's teaching me more about
how the world works than 2 years of reading The Economist (sadly canceled due
to lack of time).

I now associate a feeling and experience to the words "strategic necessity".

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guelo
Greece can't afford the debt so the only possible solution is to default. But
Europe is using all it's available power to threaten Greece to prevent it from
defaulting. Expecting a population to put up with a generation of depression
is ridiculous and it's not going to happen. When Detroit defaulted it wasn't
kicked out of the dollar and people were still allowed to move to other parts
of the country.

~~~
VieElm
I think the problem with "forgiving" the debt is that 1. someone is going to
pay for that debt, the debt that is owed to someone is on their balance sheet
as (rapidly declining) value they possess. That is the debt doesn't magically
disappear, someone has to pay for it one way or the other. 2. Those in
position to pay that debt fear Greece is just a bottomless pit that they'll be
"forgiving" debt for a long while to come since Greece's social programs
aren't sustainable and there aren't any indicators that Greece's economy will
grow fast enough to support them. The problem isn't just debt that's owed now,
but the money Greece will owe in the future (and can't pay) given Greece's
situation.

People that are going to have to pay for Greece's problems don't just want an
end to Greece's current problem just to fall into the same trap soon here
after, lurching from one crisis to another. I think that's a pretty fair
concern to have.

~~~
guelo
This points to the real problem. When Greece was originally "bailed out" in
2010 what actually happened was that the debt was moved from German and French
banks to EU taxpayers. The banks were paid in full by the EU and IMF for all
the bad debt they had made. But capitalism cannot work that way, when lenders
make a bad loan they're supposed to take the losses, that's how interest rates
are set. If they can lend without any risk then the whole market gets out of
whack.

On your point #2, Greece has been running a primary surplus for several years
now, meaning the government takes in more than it spends before debt payments.

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elorant
As I mentioned in another post the article is insulting for us Greeks because
it is historically inaccurate. At one point the author mentions “There are
ruins at the center of Athens, too, but they are rather more ancient”. This is
utterly inaccurate. Germans _literally_ left Greece in ruins. The following is
a report written in 1946 for the Greek government that describes the extend of
the destruction.

[http://www.truth-out.org/speakout/item/24456-the-math-of-
mas...](http://www.truth-out.org/speakout/item/24456-the-math-of-mass-
starvation-and-murder-germany-in-greece-during-world-war-ii)

~~~
irixusr
As an Italian, I am embarrassed by the lack of sympathy and support my
government has shown for you. As German allies we must accept our
responsibility for the destruction and famine left in our wake.

But let me congratulate you on a second Oxi day. I love your country, and I
hope to return there next year!

~~~
elorant
We hold no grudge against you guys. Italians treated our people quite nicely
during the war and besides we share a common heritage that permeates
millennia.

We also hold no grudge towards Germans either. For decades they visit Greece
each summer for vacations and we treat them as we treat every other guest to
our country. It’s just that they always look down to us with contempt. For
them we’re the lazy pricks who drink ouzo and lie on the beach all day. Even
Merkel herself called us lazy. And then it bothers them when we say they’re
all Nazi descendants. If you want our respect you have to give it first.

We don’t want no debt relief or whatever. All we want is a viable agreement
that will not tank the economy further and lead more young people to
unemployment. You give us that and we’ll repay everything. Simple as that.

~~~
irixusr
Well said.

Good luck.

------
Nacraile
I feel like existing debt is a bit of a red herring in discussion of the
crisis. Yes, Greece has a lot of debt, but as a consequence of the previous
bailout, that debt has very long maturity and low interest, so it doesn't
actually cost that much to service.

The actual issue is that Greece has a huge primary deficit (and always has).
Germany et all are disinclined to continue funding that deficit forever, which
is entirely understandable (why should German taxpayers pay for both German
and Greek services?) This is the actual problem. Writing off the existing debt
does nothing to solve this.

~~~
dmoy
Hasn't Greece been running a primary surplus for >18 months now?

------
chi-sq
Second Greek bailout included a €100bn haircut.

From Wikipedia: "EU Member States would also pass on to Greece all profits
which their central banks made by buying Greek bonds at a debased rate until
2020. Private investors accepted a slightly bigger haircut of 53.5% of the
face value of Greek governmental bonds,[10] the equivalent to an overall loss
of around 75%."

From the article: "The Federal Republic of Germany's creditors -- 20 countries
including Greece -- indeed agreed at a London conference to write off 55
percent of the country's 32.3 billion Deutsche marks of foreign debt."

------
smcl
This trend of submitting posts sniping at Greece\Germany is starting to get
ugly and isn't really suitable for HN, can we please stop?

~~~
drzaiusapelord
It won't stop because there are lot of angry leftists (mostly Europeans) who
are upset that Greece might actually be forced to pay its bills and what that
means for the welfare state model the EU has built itself on. So they snip
from the sidelines about nazis, war, banks, conspiracy theories, etc that has
nothing to do with the subject at hand. Greece is something of a canary in the
coalmine here about Europe's leftist policies. The economic situation in other
countries like Portugal, Spain, Italy, Croatia, Bulgaria, etc shows that
there's a larger problem here. They don't want to pay their bills or cut
services. They just want an endless gravy train and soon might suffer the same
consequences as Greece.

Only the most wealthy, least corrupt, and productive EU states can have a
proper welfare state and even some of them have problems with youth
unemployment, job growth, low military spending, almost no defense against an
expansionist Putin outside of the US Military (whose spending they are first
to criticize), etc.

We're witnessing the end of the welfare state as we know it, and apparently a
lot of Europeans can't handle that basic fact.

Apparently from the knee-jerk drive-by downvotes, they can't handle this
comment as well.

~~~
ojbyrne
If your second last sentence is true, then you can't have monetary union.
Break up the Euro.

~~~
drzaiusapelord
This is also my opinion as well. A shared currency is just a bad idea and
that's something the English realized early on, or at least the Thatcher
administration did. Her 1995 book "Path to Power" pretty much predicted this
situation.

~~~
tedunangst
England's realization was also assisted by Soros, so to say.

------
briantakita
> Germany Deserved Debt Relief, Greece Doesn't

Consider the source of this article.

> Germany was much better positioned to put creditors' generosity to good use
> than is Syriza's Greece.

Some would say that Greece was subject to financial violence; hardly
generosity.

[http://www.huffingtonpost.com/john-perkins/economic-chaos-
lo...](http://www.huffingtonpost.com/john-perkins/economic-chaos-loans-
gree_b_901949.html)

------
MisterWebz
Does Syriza actually want debt relief? Judging from Varoufakis' interviews, he
wants to implement policies that would foster economic growth, which would
allow Greece to slowly pay back its debts. He claims the EU's proposals would
further cripple the economy which would mean they will never be able to pay
back its debt.

So it's not necessarily about debt relief, it's about which policies are most
suitable for Greece.

------
alricb
There might also have been another reason for forgiveness: who had destroyed
West German cities and killed thousands of civilians to no great military
effect in the process (hint: not the Nazis).

------
dudul
"Germany had brought it on itself, of course, but it was no longer ruled by
the Nazis"

So when a country changes government we should just cancel their debts? The
Nazis were democratically elected by the German people. Isn't it what
democracy is about? Giving power and responsibility to the people.

Greece accumulated their debt by implementing shitty socialist policies,
Germany by killing over 70 million people.

~~~
VeejayRampay
As much as I agree with the point you're making, the total number of
casualties for WW2 is generally estimated at around 70 million people (sad to
have to say that, but it's give or take). Needless to say that not all of
those deaths were caused by Germany itself. Though you could argue that their
actions got everyone involved and, as such, the war started.

Also, it's not as much the "shitty socialist policies" (whatever that means,
since Greece was until fairly recently, ruled by a conservative party) but the
fact that taxation has long been a problem there, leaving the coffers empty
and abandoning a huge chunk of the economy to hand-to-hand payments, tax
dodgers and overall fraudsters.

~~~
afterburner
"got everyone involved"

Heh, that's putting it lightly. They attacked everyone.

~~~
exar0815
Well, the Japanese were in the attacking business pretty much, too... And
sadly never accounted for their warcrimes....

