Noam Chomsky: Greek Debt Must Be Written Off, Brussels Are Destroying Greece

chomsky

His belief that the Greek debt should be written off expressed the internationally acclaimed American scholar Noam Chomsky. As he said, the Greek debt should be written off in the same way the German debt was written off in 1953, just eight years after the end of World War II. Moreover, the American scholar underlined that Brussels’ policies are destroying Greece.

In an interview to Euronews, Chomsky defended the leftist-led Greek government, highlighting that “SYRIZA came to power following a mandate of the people, who said that Greece must stop implementing Brussels’ policies and that German banks are destroying the country,” while explaining that such policies have led to the increase of the Greek debt. “50% of young people are unemployed and around 40% of the population lives below the poverty line. Greece is being destroyed,” he said.

Asked to comment on other countries facing similar problems, such as Spain and Portugal, the American scholar said their debt should also be written off. As he repeated, despite the imposed policies that are leading to disaster, there are signs of light on the horizon, namely the independence movements of Latin America, Greece’s SYRIZA and Spanish Podemos. “Hopefully there is finally an uprising of the people against the devastating economic and social policies deriving from the bureaucracy and the banks, and this is promising. It must be,” Chomsky concluded.

It should be noted that this was not the first time the American scholar publicly supported the Greek government. In an interview to American independent news agency Democracy Now last month, Chomsky said that the European Union’s response to the Greek SYRIZA-led coalition government requests was “extremely savage,” a reaction that Spain’s main opposition party, Podemos, could face as it is being projected as the next general election winner.


  • Marisya

    Name me one person who “ows a bank” pls…
    There is a garantee in most EU countries for 100.000 euro if a bank gets bankrupt, but if it does at first the atm will give you nothing, afterwards it does.
    In most cases the state will interfere and will pay the garantee or in some countries the other banks themselfes have to.
    If the state interferes it will be done by taxpayers money.
    But again who “ows a bank” all by himself?

  • Marisya

    I agree with that, but thats not a reason not paying your debt you own.

  • Marisya

    In a case of bankruptcy the curator freezes all transactions.
    “i own banks”?? You? yes for sure, can i have my doubts about that?
    As for the rest i prefer not reacting on this post as its not worth it.

  • Marisya

    As I said before Germany AND Greece got help from the Marshall plan.
    After ww2 Germany was demolished and worked itself out of misery, Greece still is.
    If the Greek had the same ethics about labour as the Germans there was no problem today.
    “Germany was granted its way back in Europe” well how except Marshall help?
    Further on there is no war this time, Greece sunk in a economical marsh bit by bit because it was lending to much.
    All Greek govs in the past knew that but they let it be till there was no possibility to hide it anymore.
    You compare 2 circomstances that are not compatible.

  • Olaus Trøgheim

    If banks go bankrupt, the owners loose money. Simple. If that bank happens to be your national bank; so be it. This discussion is about writing off old debts. Whether you want to give them more loans is another. This has now been explained to you in numerous ways. You should get it soon…

  • Bueno Devine Burquez

    The U.S. government spent billions on a bail out, 1.6 billion of which went directly to bank executives (let alone the money they made off of their now stable stock). They buy bread all the time, probably with debit cards, or possibly credit cards. In what way is that money real?? It is in fact as you describe, fairy tale money. You are extremely naive dude. Where do you think this money for the bailout which found its way into the pockets of bank executives came from? Well it came from NOWHERE, and simply Bc people “trust” the US economy it “functions.” For instance,Donald Trump actually has more debt than equity, but his future perceived equity is why he has a positive net “worth.”. It is purely virtual, he doesn’t actually do anything, just signs some checks from time to time.

  • Bueno Devine Burquez

    You’re exactly right: the situation is not comparable. Who started WW1 and WW2? Good call.

    Furthermore, you seem to have forgotten a very important stage in Greek history: namely the post WW2 era in which the U.S. provided military support to FASCISTS who destroyed Greece against the new communist government. Therefore, Greece’s marshall plan money was immedietely nullified by AMERICA’s tactics to destroy their communist project. greece has been repeatedly punished simply Bc it does not want to play your capitalist game, you’re right they may suffer more but at least they are fighting for some form of positive values, instead of his meaningless accrual of cash that US and the West seem so religiously attached.

  • Olaus Trøgheim

    You seem to dislike Greeks.

  • Marisya

    I dislike ppl. who dont pay their debts

  • Marisya

    As we know Germany started ww1 and ww2, but thats an emotional appeal, now you are mentioning it, we have been 80 years at war with Spain, perhaps they should pay back too, dont you think? The US didn’t want a commmunist Greece obviously, but i dont think you would be that happy living under communist regiem, ask the Poles and other nations in the Balkan what they think about that.
    “My” capitalist game? Do you realy think communism is heaven? It seems like that, well it aint, living in th eEU zone is far more preffered over living in the (former) Russia i can tell you that.
    What “positive values”? is lending and not paying back, or blackmailing member states with sending IS to Berlin in your eyes “positive values”?

  • Marisya

    Got your bread already? if you got it without paying you can call me a naive dude.

  • Bueno Devine Burquez

    Bread isn’t free for is, only for the 1%. I just gave you a very clear example of how money is purely virtual (for the rich) but of course has very real effects. Do you fear a real argument, BC what you’ve proposed are repeated failed attempts ad hominem.

  • Marisya

    It doesn’t matter if its bread, i just took it as an example.
    But as i understand you didn’t get it, no, never tried of coure because yo know that doesn’t work.
    Looking at your remark “ad hominem” I see you are not happy with the fact I adress you individualy, sorry, just read mr. Johnsson beneath.
    So mr. Johnsson is communist, i cant help that, he has an opinion and looks at the world as if communism is paradise.
    The rest is bad, ugly dominant and represses “the worker”.
    Its a kind of religion and i think only to be cured living a year in Cuba or North Korea .
    Pitty that the communist countries in midst Europe are not anymore, i visited them a lot, i know where i am talking about: a small elite who can afford themselves everything, and 95% of the population who has nothing to spend, a prison not be able to get out except for the “brother countries”.
    I dont know if Mr. Johnson knows the film “das leben der andere” it reflects that timearea in a good way.
    He despises the “rich” whatever those or what that is .
    Banks create virtual money, thats correct, virtual creating makes a higher balance in the books and they want to lend it, yes it are the bad bad banks and the gangsters behind it of course.
    It has nothing to do with ppl. and states who lend money to buy products and services they cant afford and never pay back.
    The products are real and the ppl. who made them want a profit for that.
    But he, thats not realistic, mr. Johnson and his compatriots consumed and they liked it, and now the money is just “virtual” and the banks are to be blamed.
    The only thing i can conclude is that mr. Johnson is a communist in every inch because thats the way real communists act : sharing having nothing and blaming others if you dont want to pay your debts.

  • Marisya

    Yes Germany was responsible for ww1 and ww2.
    Yes the Dutch also have to get money from Germany, France (Napoleon) Spain (Philips and Alva) etc etc.
    Point is that they will never get it, neither do the Greek.
    I dont know Greek latest history but for sure there will be some groups or countries that should be in title for that too for lets say the last 500 years..
    Besides in 1960 Germany made an agreement with Greece and paid 115 million, just a fraction of the damage , I agree with that, but that are the facts.
    One cannot go forever and ever whining and seeking ways to get money and more money, cause thats the problem in Greece free money and more free money.
    Let them go and earn themselves some, that would be something to be proud off, and not the way they act now.

  • Marisya

    You are far to much focused on “bankers”, its not the fault of the “bankers” they ask for interest, sure banking made wrong decissions the last 10 years, sure the bankmanagers never earn enough in their opinion and are till today selfish, sure.
    Besides the whole time focussing on “bankers” what do YOU think is the solution for Greece?
    As for me its a grexit, and we will see what will be done with the debt they own later on.
    Because more lending and more lending, later on whining that they cant pay it back and that they are “blackmailed” is without an end, this has to stop, do you think the other members in the EU are fools? I do from time to time as a matter of fact, while in other countries mass lay offs has been and economizing Greece, severe in debt rehire 13.000 civil servants and wont economize at all, or just symbolic to get more loans.
    Their gov. shouting about “democracy” and fooling their own ppl. with posters “we will not blackmailed” in the metro of Athenes, while at the same time officials say they will sent IS amongst illigal immigrants straight to Berlin…
    Do “we” have to take all of this nonsens? I say NO, let them get out and make a love story with Putin as they blackmailed already to do so, but Putin aint that stupid as the rest of the EU.
    I am curious what you have to say about above, without you hobby horse the banksters pls.

  • Marisya

    You are far to much focused on “bankers”, its not the fault of the “bankers” they ask for interest, sure banking made wrong decissions the last 10 years, sure the bankmanagers never earn enough in their opinion and are till today selfish, sure.
    Besides the whole time focussing on “bankers” what do YOU think is the solution for Greece?
    As for me its a grexit, and we will see what will be done with the debt they own later on.
    Because more lending and more lending, later on whining that they cant pay it back and that they are “blackmailed” is without an end, this has to stop, do you think the other members in the EU are fools? I do from time to time as a matter of fact, while in other countries mass lay offs has been and economizing Greece, severe in debt rehire 13.000 civil servants and wont economize at all, or just symbolic to get more loans.
    Their gov. shouting about “democracy” and fooling their own ppl. with posters “we will not blackmailed” in the metro of Athenes, while at the same time officials say they will sent IS amongst illigal immigrants straight to Berlin…
    Do “we” have to take all of this nonsens? I say NO, let them get out and make a love story with Putin as they blackmailed already to do so, but Putin aint that stupid as the rest of the EU.
    I am curious what you have to say about above, without you hobby horse the banksters pls.

  • Bueno Devine Burquez

    It’s laughable that you think the Greeks have any bargaining power. Kind of like saying Missississipi is holding the U.S. at bay with threats to secede. What a joke.

  • Bueno Devine Burquez

    It is most definitely the system. You can make all these essentialist arguments, but humans are not so easily defined, bud. Furthermore, even IF all humans WERE greedy, why would you create a system that further PROMOTES and actually DEMANDS people be greedy? Nonsensical.

    If we look at the case of Enron, which another poster mentioned, we can see clearly the problem with capitalism. Technically, what the Enron scheme did was not illegal because of a very important problem: it had not been made into law yet. Furthermore, it was only illegal NOT because of their actions, but because THEY KNEW their actions were “unethical.” Simply put: if they would’ve kept their mouths shut, they could’ve gone on in an oblivious mode, pretending they didn’t know the consequences. Similarly, this is how the bankers functioned in America 2008: they all very well knew they large effects of their rationale, nevertheless THE SYSTEM ITSELF demanded they had to “follow suit.” For instance there were some rather honest bankers in Massachusets who decided they would not get involved in the sub prime lending. What happened? They nearly went out of business, and thus were forced to follow the pack. So even people’s LACK of greed, the system compels them to grab all they can.

    The law itself can never catch up with capitalism, which endlessly reinvents itself. No doubt it is a productive system, but I think we’ve reached a point where such

  • Bueno Devine Burquez

    I’ll leave you with one last thought that (I believe) sums up this deadlock pretty well. Thanks for the respectful convo and ideas. Take it easy.

    I think Zizek phrases your argument (which is in line with Brussells) pretty well.

    “Slovenia may be a small country, but this decision is a symptom of a global tendency towards the limitation of democracy. The idea is that, in a complex economic situation like today’s, the majority of the people are not qualified to decide – they are unaware of the catastrophic consequences that would ensue if their demands were to be met. This line of argument is not new. In a TV interview a couple of years ago, the sociologist Ralf Dahrendorf linked the growing distrust for democracy to the fact that, after every revolutionary change, the road to new prosperity leads through a “valley of tears”. After the breakdown of socialism, one cannot directly pass to the abundance of a successful market economy: limited, but real, socialist welfare and security have to be dismantled, and these first steps are necessarily painful. The same goes for western Europe, where the passage from the post-second world war welfare state to new global economy involves painful renunciations, less security, less guaranteed social care. For Dahrendorf, the problem is encapsulated by the simple fact that this painful passage through the “valley of tears” lasts longer than the average period between elections, so that the temptation is great to postpone the difficult changes for the short-term electoral gains.”

    But of course he then goes on… I’m

    “At the end of October last year, the IMF itself released research showing that the economic damage from aggressive austerity measures may be as much as three times larger than previously assumed, thereby nullifying its own advice on austerity in the eurozone crisis. Now the IMF admits that forcing Greece and other debt-burdened countries to reduce their deficits too quickly would be counterproductive, but only after hundreds of thousands of jobs have been lost because of such “miscalculations”.
    And therein resides the true message of the “irrational” popular protests all around Europe: the protesters know very well what they don’t know; they don’t pretend to have fast and easy answers; but what their instinct is telling them is nonetheless true – that those in power also don’t know it. In Europe today, the blind are leading the blind.”

    I tend to agree.

  • Bueno Devine Burquez

    You sound like Harris responding to Chomsky, complaining about his “tone.” It is indeed a laughable argument, do you honestly believe Greece can “blackmail” all of Europe?

  • Sifis Retrobannum

    i repeat again because there seems to be a misunderstanding about the course of this conversation.
    The marshall for germany plan was NOT
    about giving money germany.
    it was about erasing the debt she had.
    now if you want to have a debate about how greece is so
    lousy. imagine that the debt started sky-rocketing during the
    dictatorship (junta) that was backed by the u.s.
    now if you take the debt that you say has reached 460 billion,
    and put it with a rate of interest of about 3%. and put it in a time-length of about 50 years. it goes like this.
    50 years with a 3% rate, it makes 150% total.
    that means that the original capital without the rates,
    greece has taken a loan of about 170 billions, in
    which the rates maked the total debt go up to a 460 billions.
    but the funny thing is that the greek debt is NOT 460 billions,
    its 370. which tells us that greece didn’t actually borrowed
    170 billion, but about 140-50 billions. the actual ammount i suspect
    must be rather smaller than 140 billion because the actual rates are not in a 3%, but rather larger. the debt now sky-rockets every month.
    two months ago, when i saw the debt, it was 330 billions. now in only two months about 40 billions have been added.
    and because you seem to be posting in the wrong site (that is the noam chomsky site). i must tell you that the marshall plan was not some kind of charity.

  • Bueno Devine Burquez

    “Extortion of money or something else of value from a person by the threat of exposing a criminal act or discreditable information”

    What exactly is greece “threatening”? That they want more democracy? This is not blackmail, it is simply asking for what one wants. There is no coercion involved.

  • Marisya

    “One” wants no paying back an enourmous amount of money and one wants more loans not paying back in the future.
    In fact “one wants” keep on living like the last 10 years with a thrustworthy euro and low interests without inflation.
    Were this money comes from is not important, that others have to pay for that obviously is not the question.
    Its all to blame on the banksters and others like Merckel, in fact everyone is to blame except….themselves.
    If they got what they want the same would start again over 10 years…he..you lent us that amount of money, its your fault, we cant pay it back.
    So i realy hope for a Grexit, taking the losses and thats it, but i am affraid this circus will go on and on and on…. one hope: the finmins of the other countries have a lot of problems explaining to their ppl. they have to economize for the politics in Greece.
    If you dont see Greece tried several times to blackmail the rest of the eu you are blind or in denial, in neither nor the other case i can help you.

  • Marisya

    Yes, everybody knows that lending costs money, and the result of not paying back that money is at the end disastrous.
    The marshallplan had a few ideas behind it, and Greece at that time agreed with those ideas because it did marshall help also.

  • Bueno Devine Burquez

    Blackmail with WHAT?? What threat does Greece pose to Europe!?? The answer: democracy over capitalism. Serious threat, you had better get used to the demise of your precious social order, BC the Left is on the rise.

  • Marisya

    Lets hope not, yes blackmail, but since both eyes look at the left, you dont see the blackmailing, since your religion you cant help that, i understand.

  • Bueno Devine Burquez

    As I said, directly asking for what one wants is not blackmail, it is democracy. You and yours have proposed NOTHING NEW,: your argument has been repeated ad naseum: pay the debt pay the debt, economics, economics, economics. Care to think of something new?

    No, because you like the way things are. I am Left because I would like to see some form of emancipation: I am for the rabble, not for the rich.

  • Marisya

    Those who dont save and waste their money always want to share with “the rich”.
    Those who dont take responsibility for their actions and think another will do that always blame “the rich” for their situation.
    In general “the rich” are in communist eyes those who work, save some money and think about their future.
    So, yep i believe you are for “the rabble” since you have all mentioned above.
    “one” wants just more free money never paying it back, where it comes from doesn’t matter as long as they get it.
    Is that economics to you? Not to me, it seems more selfish.
    “Economics” is to you a dirty word, not “money” as long as you can get it from others free.

  • Bueno Devine Burquez

    MONEY IS AN INVENTION, it already DOES come from thin air! Where did the U.S. corporations and banks get their 28 trillion dollar bailout? OUT OF THIN AIR. Are you really that delusional dude? Get a grip.

  • Marisya

    In your opinion i comes, in rl. it doesn’t i stop discussing this matter with you, it has not purpose.

  • Bueno Devine Burquez

    What do you mean “calling you” a capitalist humanist? YOU said that’s what you were, explicitly. Read your own comments. Those are the views you have espoused in this discussion: 1) that the capitalist logic of debt and interest and other economic structures are not to be questioned, that they are the most fundamental feature of our society. 2) that these capitalist values should be supplemented with some weak form of “humanism,” which is a vague sense of care for the poor like “oh yah food and water they need that….nevertheless you owe me money.”

    These are the views you have put forward in this discussion, I can almost go back ver batim and quote you. So please, when I ascribe to you a term like “capitalist humanist,” don’t back away from it bc it’s “labeling, categorization.” This is your argument.

  • Bueno Devine Burquez

    Firstly, it is totally ludicrious to claim that I “invented” the word capitalist “in front” of humanism. As I stated repeatedly: you are making an argument for capitalism, and also an argument for humanism. This is simply a fact, look at what you wrote dude.

    1) This argument is FOR capitalism, I’m not misrepresenting your views. I am questioning the capitalist structure that states “debts must be paid with interest.” My simple response: what if we propose a new way of doing things? To which you endlessly respond: “Debts must be paid.” Once again, yes these are the current rules but humans make rules and humans can change them. Deal with that.

    2) This is what capitalism means dude. The fact that you call them “normal” values shows how blind you are: NOT EVERYONE believes in capatalist values of debt and interest like you do, these are in no way “natural,” they are designed by humans.

    Your inability to even consider a different proposal is truly pathetic. I’m surprised a European such as yourself doesn’t have the small amount of intellect to understand the most basic ability of the human mind: to question, to change, to re-order our world. Your “normal” values are called capitalism, I’m not inventing anytyhing these are the words used to describe “debt and interest.” I hope the rest of Europe has more brains than you, because if not they are totally up a creek.

  • Bueno Devine Burquez

    “it doesn’t exist so you don’t pay 20% of interest…”

    I’m going to try to hold your hand through this really simple concept using an analogy. You seem to be claiming “interest/money is ‘real’ because people must pay it back.” I have 2 problems with this line of thought: 1) did blasphemy really exist when people were forced to pay money for commiting heresy against the church? Of course not, blasphemy is a man made rule: don’t speak against our imaginary God or you will pay a very real fine. So what changed? why don’t we pay for “blasphemy?” The world did not change, rather human beings changed their minds. Similarly, we have the oppurtunity to change our mind about the system we live in.

    2) Even if we accept the logic of debt and interest, you’re still entirely wrong to say “repaying a debt is MANDATORY.”. As many posters have rightly noted: many countries have been forgiven their debts.

    In short: money is only “real” when humans choose to use it as a medium of trade. We as humans have the ability to 1) completely restructure our society in a radically new way outside of the constraints of money or 2) we can leave the system known as capitalism and allow massive inequality and domination to prevail.

    You have chosen the latter, but Europe is changing.

  • Bueno Devine Burquez

    Yes the discussion has always been closed for you. Most everyone else here is capable of entertaining new ideas, but you should return to your cave and please do stay there. You can deny it all you want but if you really believe the current social and economic order of Europe will be maintained, you are truly delusional. Things are crumbling in your region, from Russia to Greece to the influx of fundamentalist Islam and it all has to do with the same problem: capitalism.

  • Hacker

    you know nothing………………….

    The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

    Of course, the economics behind the program that the “troika” (the European Commission, the European Central Bank and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25 percent decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60 percent.

    It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5 percent of GDP by 2018.

    Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greece’s debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troika’s target in the snap referendum to be held this weekend.

    In terms of transforming a large primary deficit into a surplus, few countries have accomplished anything like what the Greeks have achieved in the last five years. And, though the cost in terms of human suffering has been extremely high, the Greek government’s recent proposals went a long way toward meeting its creditors’ demands.

    We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors — including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.

    But, again, it’s not about the money. It’s about using “deadlines” to force Greece to knuckle under, and to accept the unacceptable — not only austerity measures, but other regressive and punitive policies.

    But why would Europe do this? Why are European Union leaders resisting the referendum and refusing even to extend by a few days the June 30 deadline for Greece’s next payment to the IMF? Isn’t Europe all about democracy?

    In January, Greece’s citizens voted for a government committed to ending austerity. If the government were simply fulfilling its campaign promises, it would already have rejected the proposal. But it wanted to give Greeks a chance to weigh in on this issue, so critical for their country’s future wellbeing.

    That concern for popular legitimacy is incompatible with the politics of the eurozone, which was never a very democratic project. Most of its members’ governments did not seek their people’s approval to turn over their monetary sovereignty to the ECB. When Sweden’s did, Swedes said no. They understood that unemployment would rise if the country’s monetary policy were set by a central bank that focused single-mindedly on inflation (and also that there would be insufficient attention to financial stability). The economy would suffer, because the economic model underlying the eurozone was predicated on power relationships that disadvantaged workers.

    And, sure enough, what we are seeing now, 16 years after the eurozone institutionalized those relationships, is the antithesis of democracy: Many European leaders want to see the end of Prime Minister Alexis Tsipras’s leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.

    It is hard to advise Greeks how to vote on July 5. Neither alternative — approval or rejection of the troika’s terms — will be easy, and both carry huge risks. A yes vote would mean depression almost without end. Perhaps a depleted country — one that has sold off all of its assets, and whose bright young people have emigrated — might finally get debt forgiveness; perhaps, having shriveled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.

    By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.

    I know how I would vote.

  • Hacker

    You are clueless about European HISTORY and especially Greek History..

    THE GERMANS OWE GREECE 300 BILLION EURO.

    They never paid for war reparations.

    They never paid for atrocities committed.

    They stole priceless ancient artifacts.

    1/10 of the population of 11 Million Killed.

    The destruction of infrastructure took the country back 50 years.

    The entire Gold supply stolen to never be returned.

    The Germans imposed an obligatory occupation loan to be paid by Greece to the occupiers through money and food….Feeding the people who executed the Greeks..Imagine that. Hitler started repaying the loans back (made two installments).

    All in all about 300 Billion Euro in today’s money….

  • Hacker

    Germany’s insistence has reduced Greece to a condition like that of the United States at the bottom of the Great Depression. Unemployment has soared to 25 percent, and youth unemployment to more than 50 percent ; the economy has shrunk by 26 percent and consumption by 40 percent. Debt has risen to 175 percent of the nation’s gross domestic product. And the funds from the loans that Germany and other nations have extended to Greece have gone almost entirely either to cover interest payments or repay past loans; only 11 percent has actually gone to Greece’s government. Stuck on a treadmill of debt repayment and anemic economic activity, Greece, as the Financial Times noted, has been reduced to a “quasi-slave economy” run “purely for the benefit of foreign creditors.”

    Not surprisingly, when Greek voters went to the polls Sunday, they elected a new government that is demanding a renegotiation of its debt. German and European Union officials have responded with adamant opposition to any such changes.

    Fortunately for Germany, its own creditors took quite a different stance after World War II. In the London Debt Agreement of 1953, the 20 nations — including Greece — that had loaned money to Germany during the pre-Nazi Weimar Republic and in the years since 1945 agreed to reduce West Germany’s debts by half. Moreover, they agreed that its repayments could not come out of the government’s spending but only and explicitly from export income. They further agreed to undervalue the German mark, so that German export income could grow. By the consent of all parties, the London Agreement, and subsequent modifications, were crafted in proceedings that made West Germany an equal party to its creditors: It could, and sometimes did, reject the creditors’ terms and insist on new negotiations.

    The United States was particularly insistent on making the terms of West Germany’s repayments as lenient as possible. It needed the nation to be a strong ally in the Cold War. Besides, West Germany’s government, headed by Christian Democrat Konrad Adenauer, was (presumably) Nazi-free. To further punish Germany, its onetime mortal enemies concluded, was strategically — and, just maybe, morally — unwise.

    No such scruples have informed Germany’s current policies toward Greece. As a member of the euro zone, Greece cannot undervalue its currency, and rather than enabling Greece to increase its exports, Germany has done everything possible to increase its own trade balance with Greece and its European neighbors. Far from rebuilding the economies of Southern Europe, Germany pillaged them in the name of fiscal rectitude.

    But the considerations that informed Germany’s creditors six decades ago are just as pertinent today. Strategically and economically, it would be a disaster for Germany if Greece were compelled to repudiate its debts and leave the euro zone, as such a move would threaten the zone’s continued existence. The new Greek government represents at least as clean a break with Greece’s previous mis-rulers as the Adenauer government did with Hitler’s. Its early appointments signal a novel development in Greek governance: a fight against the corruption and crony capitalism that have long corroded the nation’s economy.

    Why can’t Germany apply the lessons of its own past to today’s economic challenge? As Jurgen Kaiser noted in a brilliant paper for the think tank of Germany’s Social Democrats, “little knowledge about Germany’s debt relief is to be found among the broader public in Germany.”

    The world will be a better place when Germans know their history — all of it.

  • Hacker

    The Marshall Plan had nothing to do with the GERMAN DEBT.
    It was U.S support to European countries so they would not fall into communist hands.

  • Hacker

    You dont know much and as such you should not be talking….

  • Aph

    Marisya, I happened to fall upon this discussion and what shocks me is not your very basic understanding of economics, but your real argument which is that Greeks are lazy. No intellectual argument can be made by someone who believes so staunchly in stereotypes. At the very least, read American political analyst Mazower’s “Inside Hitler’s Greece” and you will realise what Europe and the entire world owes to Greece. It was a loyal ally in both World Wars and the sacrifices its people made saved all of Europe from the Nazis. Nothing in Greek history confirms it as a country of lazy people. Based on your form of highly academic argument, Germany is a country of killers. Enough said. I

  • Marisya

    The Greek economy is a mess, and its their own fault, spent less and go earn your money, dont point always the finger to other nations, look at the mirror.and reform.
    You cant spent more then you earn thats a basic rule.

  • Marisya

    Good thing you know it all, as most Greeks it seems looking at the referendum, but he, its always to blame others, noty themselves of course