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Germany's Carthaginian terms for Greece
The US, Canada, Britain, France, Greece, and other signatories at the London Debt Agreement of 1953 granted Chancellor Konrad Adenauer a 50pc haircut on all German debt, worth 70pc in relief with stretched maturities. There was a five-year moratorium on interest payments.
(...) This sweeping debt forgiveness caused heartburn for the British - then in dire financial straits, themselves forced to go cap in hand to Washington for loans. The Greeks had to forgo some war reparations.
Yet statesmanship prevailed. The finance ministers of the day agreed to overlook the moral origins of that debt, and the moral hazard of “rewarding” a country that had so disturbed the European order.
Yes, West Europeans and North Americans alike were far more lenient to Germany a few years after the disastrous war that she forced on the whole continent, than Germans (and subservient French) are to Greece now.
Also of interest is this part:
Earlier he was caught on camera telling his Portuguese colleague that Lisbon can expect softer terms on its rescue package but only once Europe has dealt harshly enough with Greece to satisfy German public opinion.
Could it be that Germany is applying in reality at least part of the suggestion by the always well-meaning & sensible David Goldman that
"a horrible example can be made of the recalcitrant Hellenes"?
I don't know, but truth being that Greece's troubles are not for the reason German politicians think
As high priest of the “household fallacy” - the false equation of macro-economics with the budget of a Schwabian Hausfrau - he thinks Greece is in trouble because it spends too much, not because it is trapped in debt deflation with a badly over-valued currency.
From there he progresses to the next fallacy of thinking that Portugal, Spain, and Italy will pull through as long as they cut, cut, and cut again.
If Portugal spirals down in much the same fashion as Greece once austerity bites in earnest - and therefore misses target after target - it is likely that Mr Schäuble will turn on Portugal with equal fury, because that is how he sees the world.
Each failure is ascribed to lack of moral fibre, not to the design flaws in the currency project that he himself helped create and foist on the German people against their wishes.
...the risk is high indeed for that kind of inhumane punishing to be applied by the German government (followed, to our shame, by subservient French government) to one financially distressed country after another!
Some lines are better not crossed:
By demanding a budget viceroy for Greece, and now an escrow account to seize Greek revenues at source, the Merkel-Schäuble government has crossed a diplomatic line and brutalised EU politics. “Memorandum Macht Frei”, as one Greek newspaper splashed.
Would Konrad Adenauer ever have made such a blunder?
No, Adenauer definitely would have not! That comparison is of course outrageous and insulting:
But then, no more than the proposal from German government which motivated the comparison in the first place.
funny
oops I mean Mikonos to gay Germans.........
