4 ms·

Germany was rescued after WW2 to drive the European economy. Without German exports the continent would have had no chance to recover. It's sure ironic that Ger

Germany was rescued after WW2 to drive the European economy. Without German exports the continent would have had no chance to recover. It's sure ironic that Germany first destroyed the continent and then profited by rebuilding it, but history doesn't seem to care about irony much. I think the 'Germany never paid'-argument is flawed. The Marshall plan would not have worked if Germany had been indebted. Instead this happened: https://en.wikipedia.org/wiki/German_reparations_for_World_War_II https://en.wikipedia.org/wiki/German_reparations_for_World_W... If Greek defaults without paying their debt Germany (=tax payers) is about to lose 90 billions. I'm not sure how this is profiting...

socialist_coder 11y ago
That Wikipedia article says that Germany did not fully pay its debt to Greece. So, I don't see your point. If Greece was not on the Euro, it would simply print money and inflate its currency until it could easily pay off it's debts. That gives you the same result as what Germany did, which was to basically only pay off some of their debt and just forget about the rest. The debtors lose, but hey, that's the risk for loaning money, right?
- cuillevel3 11y ago
  Sure there is some debate about a possible debt from Germany to Greece for crimes committed in WW2. That's a big discussion by itself. Doesn't change the fact that the original article ignores the Marshal Plan. Anyways if Greek was not in the Euro it could devalue its currency. Which would benefit their exports, if they had any. However their debt would still be payable in Euro and the new currency would have a terrible exchange course. So no win. There are scientist who say the real estate market might boom in such a case. Since most Greeks are home owners that may provide some cash in the short run: International investors and rich Greeks who transfered their assets out of the country before the crash will buy in. It's still unclear if a state can actually default. I guess if you're not dependent on import you could risk not paying back your international partners(/enemies). There are examples of countries regaining some power in isolation. I agree about the risk of lending money, that's probably the reason why so much of this money was used to decouple Greece finance market and ensure existing (private) contracts were honored.
  - socialist_coder 11y ago
    > However their debt would still be payable in Euro and the new currency would have a terrible exchange course. Ahh, I didn't realize this, but yeah, you're right. The debt would stay in Euros... Or would it? Maybe you switch to a new currency at 1:1 (at the start, of course it drops immediately) and your debt uses the new currency too? Who knows
  - dragonwriter 11y ago
    > It's still unclear if a state can actually default. Its happened numerous times in the past, so its eminently clear that it can actually happen.
    - cuillevel3 11y ago
      Yes you are right. I meant if a state can get out of his financial obligations by defaulting. I read somewhere there is nothing like personal bankruptcy for states. Argentina even lost a court case?

socialist_coder 11y ago

That Wikipedia article says that Germany did not fully pay its debt to Greece. So, I don't see your point. If Greece was not on the Euro, it would simply print money and inflate its currency until it could easily pay off it's debts. That gives you the same result as what Germany did, which was to basically only pay off some of their debt and just forget about the rest. The debtors lose, but hey, that's the risk for loaning money, right?

cuillevel3 11y ago
Sure there is some debate about a possible debt from Germany to Greece for crimes committed in WW2. That's a big discussion by itself. Doesn't change the fact that the original article ignores the Marshal Plan. Anyways if Greek was not in the Euro it could devalue its currency. Which would benefit their exports, if they had any. However their debt would still be payable in Euro and the new currency would have a terrible exchange course. So no win. There are scientist who say the real estate market might boom in such a case. Since most Greeks are home owners that may provide some cash in the short run: International investors and rich Greeks who transfered their assets out of the country before the crash will buy in. It's still unclear if a state can actually default. I guess if you're not dependent on import you could risk not paying back your international partners(/enemies). There are examples of countries regaining some power in isolation. I agree about the risk of lending money, that's probably the reason why so much of this money was used to decouple Greece finance market and ensure existing (private) contracts were honored.
- socialist_coder 11y ago
  > However their debt would still be payable in Euro and the new currency would have a terrible exchange course. Ahh, I didn't realize this, but yeah, you're right. The debt would stay in Euros... Or would it? Maybe you switch to a new currency at 1:1 (at the start, of course it drops immediately) and your debt uses the new currency too? Who knows
- dragonwriter 11y ago
  > It's still unclear if a state can actually default. Its happened numerous times in the past, so its eminently clear that it can actually happen.
  - cuillevel3 11y ago
    Yes you are right. I meant if a state can get out of his financial obligations by defaulting. I read somewhere there is nothing like personal bankruptcy for states. Argentina even lost a court case?