In 1953 Greece and others countries forgave to Germany half of its debt

11 Jul

Since the birth of the euro, interest rates were unreasonably low for the economies of southern Europe with the sole purpose of propelling the growth of unified Germany

In 1953, through the so-called London Agreement on German External Debts, also known as the London Debt Agreement, half of the foreign debt of West Germany was condoned by a group of at least nineteen countries, among which were Greece and Spain. The purpose was to lighten the burden of its debt so that it could grow and recover from the disaster caused by herself during World War II.

Such agreement included the provision that West Germany would pay only when obtained trade surplus, limiting payments to 3% of German exports. It was an incentive for creditor countries imported German products. Among the draconian provisions of the Troika to Greece at the moment, there is no clause that encourages similar good things. It is considered that only Greeks themselves are responsible for their agonizing situation, and they have to paid for it.

Since the birth of the euro, interest rates were unreasonably low for the economies of southern Europe with the sole purpose of propelling the growth of unified Germany. Interest rates incendiary for the reheated Mediterranean economies that caused by the perverse mechanisms in place since its inception, the debt bubble, public and private, who are unable to stop in time. Southern Europe has paid too much for  the exemplary German reunification.

Taking advantage of the situation of the defective birth of the single currency, German and French banks lent to Greece, without serious risk assessment, that Greece cheerfully demanded. They knew they were playing with fire and pay the piper the other: sooner or later would transfer their portfolios poisoned to the public sector. They knew they were systemic institutions.

Exposición de Bancos

Costly errors committed by such private banks were then distributed pro rata among European citizens, via liquidity mechanisms put in place to avoid a larger disaster to that caused by Lehman Brothers.

Deuda griega

For the moment the Troika has only offered in exchange for anguish, a trouble refinancing, guaranteeing a terrible economic downturn that has caused the debt burden becomes increasingly unbearable, impossible to ever pay whatever the weight growth. Spain is on the same path despite the current meanders.

Perhaps that fear of seeing the speck in your neighbor’s eye instead of the beam in itself so that makes attacks from Spain to Greece are terribly cruel and ruthless. They have been in the tens of embarrassing media comments that cause redness and cause embarrassment.

It has been accused of failing country since classical times, vague and corrupt, and I do not know what else. The same could be said of us. In Greece, as in Spain, most people are honest, competent and hardworking.

That does not mean that both democracies are ill and that their citizens have not wanted to recognize  at the polls the democratic fallacy that starred. Its population fell under the nouveau riche syndrome that deserves everything by the state, the occurrence pretend ignorance to believe that the public tap was unlimited. Irresponsible politicians, are retreating caste or emergent, they have dealt in such prime perception. Are the terrible consequences of uncritical poor education  system (LOGSE*) and the uncritical education triumphant.

  •        *Spanish primary and secondary education´s system.

They have not (us) been able to create a system of checks and balances that will control the institutions that promote political and economic meritocracy instead of this suicide and decadent “sillycracie”, for not to say strongest things  , where the most incapable members of society they manage forever govern.

Perverse mechanisms that have raised an oversized public sector, inefficient and bureaucratic every day, that sucks resources should be aimed at strengthening the real economy, but today prevents him develop.

Greek politicians, meanwhile, instead of strengthening the real economy, as money spent to assemble cribs and disseminate privileges, encouraging corruption and irrigate the country with improper and absurd subsidies and infraestructures, similar  to the Spanish way.

This, together with an absurd and incomplete design of the euro did not guarantee budgetary rigor of its members, without financial controls and a policy of interest rates by the European Central Bank in accordance with the internal situation in Europe and not only Germany, led Greece (and Spain) to the current situation.

When the issue blew up rather than cut their losses by closing intervening or European banks guilty of irresponsibly encourage Greek bubble (and Spanish) debt expelling their inept managers, the mechanisms created for the purpose, and all public in that moment, They provided additional funding to Greece by the classic kick forward in order to hide their own misery, repaying loans to such guilty banks , so that they could go out without punishing responsibilities.

The first Greek bailout was a bailout of Germany and France made between all Europeans. They would have to be the ones to pay the collapse of its banks virtually broken.

In Spain, for doing the same, the bicentennial homelands savings boxes, happily financed by the same banking system , passed away after a long life exemplary life. There have always been incompetent politicians, maybe not as many as now. Despite them, the legendary Spanish savings banks were well managed until the entry into the euro and its partisan use by acolytes domiciled in seventeen irresponsible “little nations “ in similar way  to Greek institutions.

What destroyed them  in just eight years old when the raw material in Spain had always been equally poor? Something had to see in all this the nefarious design of the euro, of which Greece is paying the entire bill when it should only pay half or less, if we compare the situation of modern Greece with the circumstances of Germany 62 years ago, and the origin very different from the debt of both.

The original sins of everyone playing in different leagues. Germany had launched two catastrophic world wars. To our knowledge, the crushed Greece has not triggered any. In 1953 the world was generous with West Germany. He intended not to repeat the mistakes of the Versailles Treaty.

Rotterdam destruida WWII
Rotterdam ( Holland ) destroyed by Germans in WWII

Greece has committed multiple errors. They do not deny it or them. The troika, led by Germany, has accentuated them with the decline to pardon part of the debt ,in exchange  to reform a viable state, budgetary rigor, sensible reforms far failed ultraliberal doctrine, and assumable conditions to enable them to grow, in just reciprocity to grace Greece (and Spain) they had with Germany then.

Why Germany is unable to correspond with dignity to Greece? Sunday’s referendum was passionate rather than political. A hopeless right to complain. It reflected the mood of the humiliated people , without future or budding skyline in the distance. USA  went better during the Great Depression.

Varufakis blew herself despite winning his choice. What most annoyed his colleagues is proof that he knew more than anyone. So they have no mercy. Why did not anyone miss the thick words addressed to the troika, disturbed or form, like it or not their sex appeal, was being or disagree with their ideology? He has more reason than a saint with his words? Time will tell and newspaper archives will pale.

Greece is grieving own faults and those of their tormentors. Spain will follow sooner or later. If the euro does not redraw if the troika institutions do not reflect and how some decency and generosity, if they do not reform themselves with sense for once, the dream of Europe will vanish.

http://blogs.elconfidencial.com/economia/apuntes-de-enerconomia/2015-07-10/en-1953-grecia-y-espana-perdonaron-a-alemania-la-mitad-de-su-deuda_921559/

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