Economic Historian: 'Germany Was Biggest Debt Transgressor of 20th Century'

[sysop]

Think Greece's current economic malaise is the worst ever experienced in Europe? Think again. Germany, economic historian Albrecht Ritschl argues in a SPIEGEL ONLINE interview, has been the worst debtor nation*of the past century. He warns the country should take a more chaste approach in the euro crisis or it could face renewed demands for World War II reparations.

http://www.spiegel.de/international/...769703,00.html

[BTraven]

Considering that Germany annexed Alsace-Lorraine as well as forced France to pay 5 Billion Francs reparations for a war (1871) which took place only in France it’s even from a contemporary point of view understandable that after WWI Germany was squeezed like a lemon. Keeping up the blockade to achieve its goals was not gentleman like by the Allies given the devastation the war caused in France and Belgium an appropriate mean to get as much money as possible to rebuild the countries. French reparations made German’s “Gründerzeitboom (Wilhelminian time boom) ” just possible. Perhaps the French thought it could happen twice. Nevertheless the conditions determined in the Versailles Treaty were too harsh. The author already got the flak for his opinion (his evaluation of WWI was especially criticised) in the German speaking forum again therefore it would be no surprise would it happen here again. Even a large majority of Guardian readers cannot agree with. I think he is right.

http://www.guardian.co.uk/commentisf...ek-debt-crisis

[jeby]

The second world war ended 1945. That was 66 years ago. Greece is only using it as a diversion of their self caused economic problems. Tons of other countries suffered because of the war, but they don't use it as a lame excuse for CURRENT economic problems. Playing the Nazi card is just lame and it is getting lamer and lamer the more time past.

[aka_charos]

Originally Posted by jeby

The second world war ended 1945. That was 66 years ago.

Tell that to millions of christians around you that were a cross around their neck. "That happened two thousand years ago, get over it" . We have a religion based on fairy tales written millenniums ago and people live everyday with this memory so if you want to erase the past I suggest you start from way way back into the past and once that fairy tale memory is erased, then we can talk about your request.

Originally Posted by jeby

Greece is only using it as a diversion of their self caused economic problems.

What are you talking about? The Hague trial was initiated by citizens (victim's relatives), not by the Greek government. It's about reparations for a small region (100 victims) and doesn't reflect reparations to the whole country. If Greece wanted to make a diversion, it wouldn't claim the reparations but the forced loan that was issued to Germany in 1938. So there's no diversion whatsoever and I suggest you to stop reading tabloids and stick to the facts.

Originally Posted by jeby

Tons of other countries suffered because of the war, but they don't use it as a lame excuse for CURRENT economic problems

How hard was it for you to understand that article? Ritschl compared the crisis that Germany had during those days with the current crisis. If Germany didn't got that "haircut" it would had zero chance to develop. So the fact that Germany is a leading state with a financial power is linked with the loose terms of the debt it faced. What Ritschl is trying to say is that you can't be a macho man with goldfish memory. Try to read something once in a while with a sober mind without the "holier than thou" attitude.

[wolf2012]

"and even borrowed the money it needed for its World War I reparations payments from America" ...

However, most historians agree today that exactly those exorbitant reparations were meant as punishment and could not have been raised any other way and were actually also a reason that caused further instability in Germany. Some go even so far as to say they were the precursor for the rise of the Nazis.

[cretan]

Is it possible for an Italian automaker borrowing at 7% to compete with a German automaker borrowing at 1.98%?

Is it possible that Germany will sustain its economic miracle when the rest of Europe, which absorbs 70% of its exports is in depression?

Does anyone think that Bund will remain safe heaven for ever and Germany will continue amassing billions from the low interests when the rest of Europe goes down?

Does anyone envision the result of a bank run on European soil?

The present situation cannot continue.

There are two choices in front of the German people: either European unification, or European breakdown.

Nobody can play bully amongst partners, if he wants the partnership to stay alive. And that, as the interview shows, is more true than truth for Germany.

This is the real "moral danger": that Germany continues playing bully again, in a no-exit street, and all the rest start thinking of the terrible historic mistakes they did to let it resurface and even escape paying its dues.

If Europe breaks down, all the achievements of 66 years of peace will vanish in months.

War, yes war, will stop being the "impossible path" in a matter of a few years.

And this time, France will not allow to be occupied in six days: They will probably press the button in the first six minutes.

PS: I have lived and in Berlin for years before the reunification, and I loved it. There are millions of very smart people in Germany to let Europe take such a dangerous path.

[cretan]

Is it possible for an Italian automaker borrowing at 7% to compete with a German automaker borrowing at 1.98%?

Is it possible that Germany will sustain its economic miracle when the rest of Europe, which absorbs 70% of its exports is in depression?

Does anyone think that Bund will remain safe heaven for ever and Germany will continue amassing billions from the low interests when the rest of Europe goes down?

Does anyone envision the result of a bank run on European soil?

The present situation cannot continue.

There are two choices in front of the German people: either European unification, or European breakdown.

Nobody can play bully amongst partners, if he wants the partnership to stay alive. And that, as the interview shows, is more true than truth for Germany.

This is the real "moral danger": that Germany continues playing bully again, in a no-exit street, and all the rest start thinking of the terrible historic mistakes they did to let it resurface and even escape paying its dues.

If Europe breaks down, all the achievements of 66 years of peace will vanish in months.

War, yes war, will stop being the "impossible path" in a matter of a few years.

And this time, France will not allow to be occupied in six days: They will probably press the button in the first six minutes.

PS: I have lived and in Berlin for years before the reunification, and I loved it. There are millions of very smart people in Germany to let Europe take such a dangerous path.

[stevej8]

Ritschl's claims in this area are a woeful misrepresentation of history. Firstly Germany did not start 2 world wars, the first began in the Balkans between Serbia and Austria-Hungary, with Russia and France also mobilising before Germany, whilst the second actually began outside Europe, when Japan invaded China (and Italy Abyssinia), as a number of even British historians have admitted. This is apart from Stalin's USSR also invading Poland in 1939. The debts and annexations etc imposed on Germany at Versailles by force were hardly legitimate, and forced Weimar Germany to borrow to make ends meet. In fact Hitler ceased the payments when he came to power, but the outstanding claims were settled in the London Debt Agreement of 1953, which reduced Germany's debt load proportionately to (free) Germany's reduction in size after WW2, and in exchange also for Germany joining NATO and the defence against the Communist bloc. This was also after reparations and other exactions of tens of billions of 1940's dollars had been taken from Germany by the occupying powers, in the forms of industrial stripping, seizure of intellectual property, requisitions in kind, and forced labour of millions of civilians and POW's for years, not counting annexations of much German territory and occupation charges of billions per year. Final repayments on outstanding LDA debts were made in 2010. Other reparations claims were shelved in 1953, other than the many tens of billions voluntarily paid to Holocaust survivors and forced labourers et al, and had no legal or other force due to the liquidation of the 3rd Reich and determinations of the occupiers. Modern Germany is not liable for claims such as the inter-Axis 'occupation loan' (made with the collaborationist 'Hellenic State' government) as both regimes ceased to exist, and reparations settled by the Allies (of which Greece received an allocated share). And the US sacrificed very little financially for Germany, most Marshall loans were repaid, the LDA writeoff was proportional to Germany's reduction by decision of the Allies, and in return for political objectives accorded greater importance in the Cold War, and the US (along with the other occupying Allied powers) had already taken many billions from Germany in the aforementioned forms. And except for the Nazi collapse, Germany did not go bankrupt - Hitler stopped payments in 1933 for ideological reasons, and Germany paid its agreed obligations after reunification.

Pronouncements of Germany's 'obligations' based on an ignorance of the facts of history, however little widely-known, are worthless, and all the more to be regretted, when coming from German academics who ought to know better.

And regarding a commenter's claim about 1871 - France actually started the Franco-Prussian War and invaded Germany (then Prussia) first, with the stated intention of going all the way to Berlin. The transfer of the war to France only occurred because of the greater effectiveness of German mobilisation, forces, and tactics, and the reparations charged to France were calculated on the basis of Napoleon's charges to Prussia (though reduced by a billion Francs). Alsace-Lorraine had been seized by France in the 17th-18th centuries and were still predominately German ethnically and culturally, apart from certain areas left to France by Bismarck. They were (re-)annexed to Germany as a means if reducing France's ability to attack again, ie to increase German security, justifiably in the circumstances.

[Constantinos]

The above title comes from an ancient Greek motto; indeed looking more into the issue may result in other opinion. Probably the issue can be solved in an international court of justice, but at any time various information can promote a better understanding.
1. Modern Germany is liable for the forced occupation loan realized in 1942-44. Third Reich obliged Bank of Greece to supply this loan. West Germany refused to pay the loan back on the ground that final peace treaty had not been signed. After Germany reunification, government by Helmut Kohl also refused, on the ground that “4+2 treaty” is not the final peace treaty. But today "4+2 treaty” is considered equivalent to final peace treaty. The loan seems to be well documented, so the question rather concerns its present worth.
2. Reparations make a more complex issue, but their claim time has not expired. London Agreement (1953) postpones negotiation of them till the final peace treaty (for Greece and certain other countries). So they have come out of freeze in 1990 and relevant claims can be valid at the present time.
3. No Greek politician has ever refrained from above claims. Marshall plan and other subsidies provided to Greece by USA and (later) by EU for specific purposes have nothing to do with mentioned loan or reparations and do not incorporate them.
4. This is information from Greek mass media, including views of Greek and some German professors. If there is additional data that clarifies the matter, publication would help.

[Constantinos]

Following article by Professor Hagen Fleischer can be quite informative to those interested in a fair arrangement of the issue.
<http://www.enetenglish.gr/?i=news.en.article&id=664>