June 22, 2015
Whatever happens on Monday, Greece the country will survive this crisis – and the Greeks know it. The same can’t be said of the euro project – and we know it.
Could it be the case that in order to save the euro, the European elite destroys the EU? What is happening – and we are deeply involved – is quite shocking.
Last Thursday, by telling the world that he and others are preparing for a Greek exit from the euro, Michael Noonan – for some reason the most vocal finance minister on this issue – made certain that the Greek banks would experience a massive run on Friday.
Why is the rest of Europe trying to destroy the Greek banking system, which has already been made fragile by successive pro-European governments borrowing hand over fist and hoping to use the subsequent IOUs as collateral for the Greek banking system?
Why are we jumping on the bandwagon set in motion by the German media which relentlessly pursues the line that feckless lazy Greeks are only looking for debt forgiveness to make legitimate their idleness?
Are we so craven in our willingness to do someone else’s bidding that we forget historical facts?
I can understand that the German politicians looked their people in the eye and told them we will get all your money back from Greece, but why is Ireland faithfully being Germany’s greatest cheerleader?
Have we forgotten about Germany’s own history as the greatest European beneficiary of debt forgiveness? Or do our guys simply not know?
German memory – and that of its Irish supplicants – is very selective. There is no mention of the 1953 London Debt Agreement in their debates on Greece.
Why doesn’t someone remind Germany that in 1948 the introduction of the Deutsche Mark (backstopped by American capital) wiped out most of Germany’s domestic debt?
Or what about the fact that in 1953 half of Germany’s external debts, including their interest payments, were wiped out at the behest of a bankrupt Britain?
And furthermore, are we not aware that the Americans insisted the remaining debt payments could be spread out over a term of three decades?
Why doesn’t someone remind the Germans – and those in Ireland who want to be the best boys in the Teutonic class – that in the 1950s Germany’s debt was less than 20 per cent of their GDP, while much of the rest of western Europe in the 1950s struggled with debts of about 200 per cent of GDP?
How else do you think Germany could have rebuilt itself?
Albrecht Ritschl, an economic historian at the London School of Economics, estimated that the total debt forgiveness West Germany received from 1947 to 1953 was more than 280 per cent of Germany’s 1950 GDP.
This compares to 100 per cent of GDP that Greece has been pledged in aid since 2010. So the frugal Germans – who destroyed Europe, in case you had forgotten – got almost three times more debt forgiveness than the Greeks, who didn’t kill anyone!
Why doesn’t someone also point out that a clause in the London Agreement of 1953, which wiped out half of Germany’s debts determined that West Germany should only pay for the debts out of its trade surplus? This is exactly what the Greeks have put on the table, but they are rebuked by the likes of Christine Lagarde for not being credible.
Do our Department of Finance legates (who are playing a sleeveen role in this shameful piece of political theatre) not know that Germany’s debt repayment was limited in any one year to 3 per cent of West Germany’s export revenues?
What did this mean?
It meant that Germany’s creditors had to buy West German exports in order to be paid. Therefore, Germany did not have to resort to the Ponzi scheme of issuing new debt to pay for old debt.
Imagine if Greece asked that a certain percentage of Germans were obliged for the next ten years to take their holiday in Greece in order to give Greece the hard currency to pay back German banks?
It sounds strange, but that’s exactly the type of deal that Germany was given after World War II.
These are the overlooked facts. They have been replaced by the usual stereotypes that the Greeks – and by extension Italians, Spanish, Portuguese – are lazy Mediterraneans who want a German lifestyle but aren’t prepared to work for it.
We are witnessing a pathetic and shameful reinvention of history going on. Tomorrow there will be a Versailles Treaty-style conference, where the rest of Europe will dictate terms to the Greeks. By talking about the Greek exit from the euro on Thursday, the mainstream of Europe, who are supposed to do everything to make the euro an irrevocable system, have enfeebled the Greeks by forcing a bank run.
The Greeks are on their knees now – all the better to bully.
If the ECB turns off the taps, the banks in Athens will fold. Rather than protect the Greek banking system, the European Union has done everything in its power to crush it.
The Greeks are not innocent in this drama, but the crucial aspect to understand is that Syriza is the consequence not the cause of the crisis. The crisis was caused by German banks (and others) lending money to successive corrupt Greek governments.
None of these governments were ever described as radical when they were being feted in Berlin and Brussels, yet they were radically reckless.
Now the government that is charged with trying to sort everything out is labelled radical! How does that make you feel?
History is on the side of the Greeks. Whatever happens, Greece will survive, but if the euro system is based on selective interpretations of economic history, what hope has it in the next crisis?