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Germany was given a significant discount on its external debts in 1960, and very generous repayment terms. "The total under negotiation was 16 billion marks of
by Aloha 11y ago
Germany was given a significant discount on its external debts in 1960, and very generous repayment terms.
"The total under negotiation was 16 billion marks of debt resulting from the Treaty of Versailles after World War I which had not been paid in the 1930s, but which Germany decided to repay to restore its reputation. This money was owed to government and private banks in the U.S., France and Britain. Another 16 billion marks represented postwar loans by the U.S. Under the London Debts Agreement of 1953, the repayable amount was reduced by 50% to about 15 billion marks and stretched out over 30 years, and compared to the fast-growing German economy were of minor impact.
An important term of the agreement was that repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germany’s creditors a powerful incentive to import German goods, assisting reconstruction." [1]
[1]https://en.wikipedia.org/wiki/London_Agreement_on_German_External_Debts https://en.wikipedia.org/wiki/London_Agreement_on_German_Ext...
- vacri 11y ago"Making 50% of the reparations" is considerably more than "never paid their debts", and while on favourable terms, we're also talking about half of Germany doing this - the country was torn in two, and was at the pointy end of the Cold War. Forgiveness of some of the debt has also been part of the Greek proposals. It's not like debt forgiveness is unique to the German situation. Pretty much any time some entity is in risk of default, there'll be some degree of debt forgiveness; cue news stories of "creditors getting 30/50/70 cents on the dollar". Keep in mind also that Germany underwent massive social changes as part of their recovery process - it certainly wasn't 'business-as-usual'. That Germany managed to do so well speaks to the industriousness of German culture, not that they were 'let off lightly'. If Greece gets handed money without significant reforms, what will be some fundamental social, political, or cultural differences between 2010 Greece and 2020 Greece?