• German and Greek debts

     

    Few weeks ago, I went with my class to Berlin in order to visit the Capital city of Germany. During this stay of five days we had the opportunity to attend a TV show about Greek issue. Guests invited to participate to this debate were from different boards: A leader of the coalition CDU/CSU, a financial expert, a woman from Green party, a teacher of University and an economist. All this person had some different point of views concerning the situation of Greece in European Union (EU).

     

    German and Greek debts

    I would like to talk about a specific point of the Greek issue:

     

    Greek government want Germany to repay for troubles caused during Second World War by Nazi regime.

    Greece borrowed 240 billion euros at the beginning of this crisis and they ask 162 billion euros to Germany. This demand is to allow Greece to renegotiate his debt with his creditor that is EU and the main actor of this Union, Germany.German and Greek debts

     

    To understand this demand from Greece let’s see what happened decades and years ago:

     

    In 1946, Treaty of Paris explain reparation owed by Germany and Greece should receive about 50 billion euros from Germany for this troubles. But the question is: Who must pay? East or West Germany? Finally, countries involved in this discussion said that reparations will be paid when Germany will become one country.

     

    German and Greek debtsIn 1947, European Recovery Plan named also Marshall Plan begin and will continue until 1952. The Marshall plan has the main objective to help European countries after the war but also to avoid countries to rejoin Communist side. Moreover, this donations from USA help them to export products so increase their economy. That show Americans have an interest in this help but that is the case in most geopolitical situation. Sixteen countries want to be involved in this plan as France, Great Britain, Austria, Greece and others. In 1949, West Germany received some donations, about 150 billion euros, from this plan.

     

    In 1953, more than 60 % of West German Public debt is cancelled. This debt was about four times the GNP of this country. The reason of this gift from West Europe countries and USA is historical:

    After the First World War, reparations against Germany were so important that caused a big inflation, then a crisis and help Nazi regime to take the power. Greece was one of the creditors of West Germany and Greek new government consider this gift for German debt could be done for Greek debt too.

     

    German and Greek debtsIn 1960, Germany give an amount of around 350 million euros to Greeks citizens who were most touched by Nazis pillaging. This is a first step from Germany but not enough for Greeks because this sum of money is nothing compared with billions of euros.

     

    After the reunification in 1990, the Two Plus Four Agreement is signed between East and West Germany and the four occupation countries (USA, France, Great Britain and URSS). The result of this agreement is the abandon of war reparations.

    According to Germany countries who signed this agreement represent all Europe so they don’t have to repay for the troubles caused by Nazis.

    On the other side, Greek people think that Allies have no legitimacy to be a representative of all European countries and especially Greece in this case. This country has never accepted the agreement of 1990.

     

    German and Greek debtsOn Easter’s Sunday Greek finance minister Yanis Varoufakis went to Washington in order to discuss with IMF (International Monetary Fund) because Greece must pay about 500 million euros to this organization.

     

     

    To conclude, this demand from Greece put Germany in a delicate position: Either Germany admit his prior mistakes and accept Greek government to repay less for their public debt or Greece should repay now without help from German money.

    This question is difficult because European Union (EU) was created to enable countries to act together for the future of Europe and don’t remind this kind of historical souvenirs. 

    However past couldn’t be forgotten so perhaps Germany should do a memory work...


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