peace, Greece Playing With Fire

The creation of the European Union was a reaction arising from Germany’s war guilt, but not a form of reparation, writes Handelsblatt’s Paris correspondent.
A memorial in Greece to soldiers who fell during World War II.


Greece’s new government has gotten off to a swift start, taking quick and dramatic action.

Last week it called for its debts to be reduced, referring to Germany, which paid hardly any reparations after World War II while receiving development aid from the Marshall Plan. In 1953, the Federal Republic of Germany even had much of its debt cancelled. Why then should Greece’s mountain of debt be dealt with so harshly now?

Germany’s post-war “burden-sharing” model could well be an inspiration for the Greek government.

Come last Sunday, the talk had changed. The new financial minister, Yantis Varoufakis, said his country wanted to go “cold turkey,” not just struggle from one loan payment to the next, and in that way unburden European taxpayers.

The new government seems to be grasping reality. Specifically, that means three things:

First, elections in one country cannot lead to Europe following the wishes of a new government.

But elections do have consequences for the rest of Europe; otherwise national democracies would be less important. Germany, with its federal constitutional court, should appreciate this point.

And finally, Germany’s past has not been forgotten. Rather, the European Union encompasses the “German problem” – benefitting both Athens and Berlin.

On Sunday, French Finance Minister Michel Sapin explained to his new colleague, Mr. Varoufakis, how far any willingness to compromise could go. There could be no more reduction in debt. But it was in the E.U.’s interest, Mr. Sapin said, for Greece’s debt to be serviced in a way that fosters growth. Former governments in Athens had not done enough to assure fair taxation and not made sure that Greece’s wealthy paid their share to overcome the crisis.

Mr. Varoufakis accepted this logic. Berlin and Paris can help maintain this new tone. In the past, out of consideration for their conservative and social democratic party counterparts, German and French leaders supported a fiction: that the same political forces that created the chaos in Greece, could lead the country out of it.

But a new beginning is possible and Germany’s post-war “burden-sharing” model could well be an inspiration for the Greek government.

After the war, Germany dipped into big private fortunes – 50 percent of assets spread over 30 years – to overcome its crisis in a socially responsible way.

Germany is the “spiritual home“ of many Greeks, said Mr. Varoufakis. So looking at Germany’s process of evening out social imbalances would make more sense than picking over old grudges about World War II reparations. This has attracted attention in many other European countries, though, and Germany should realize this.

Under no circumstances does France wish to embarrass Germany in this matter. There is an almost exaggerated fear of saying anything that might be badly received in Berlin.

But there have been other reminders in the media, following the Greek finance minister’s demands, that Germany didn’t have to pay reparations and had its debts reduced after the war.  At the same time, people see that the strategy was a lesson learned from the disastrous policies after World War I. Reparations constituted up to 13 percent of the Weimar Republic’s government spending.

Those old reparations were later waived. But the debts that Germany incurred to finance them, remained. At the London debt conference in 1953, a large portion was cancelled. But the last installment of a “Young Bond” – named for Owen D. Young, chairman of the second reparations conference in 1929 – was not paid until October 2010.

It is a political distortion to compare Greece today with post-war Germany of 1953. Germany, with the help of the Allies, completely reinvented itself after the war, politically and economically. Culpability for the war did not result in new reparations, although the Soviets did dismantle some industrial machinery in eastern Germany.

The result was a united Europe, in which the Federal Republic of Germany was, and still is prepared to be a net contributor for others. Anyone who has forgotten that in Athens should now consider this.

And anyone in Germany who is indignant about being overburdened as the “Paymaster Republic,” should put his arguments to test in London, Paris or Amsterdam.

Some people have to burn their fingers before they learn not to play with fire. And that doesn’t just mean the Greeks.


Greek debt


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