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> Apart from Greece's inability to inflate its way out of debt, how is this any different? The debt forgiveness because of the London Debt Agreement amounted t
by rbehrends 11y ago
> Apart from Greece's inability to inflate its way out of debt, how is this any different?
The debt forgiveness because of the London Debt Agreement amounted to about 11% of West Germany's 1953 GDP. Most of West Germany's public debt was internal and was wiped out by the currency reform in 1948 (which meant that West German savings took a 93.5% haircut) [1].
Germany has to be thankful to the Allies for imposing only very light sanctions after WW2; but debt forgiveness didn't play much of a role in Germany's recovery.
I.e. there is a strong moral argument that you can make, especially given that Greece largely waived WW2 reparations, but the economic situation isn't the same.
[1] Also, East Germany wasn't as lucky and got hit hard by reparations.
- igravious 11y agoWhy should they be "thankful"? I'm wary of this attitude. Isn't defeat and the brutal horror of war (especially that war) sanction enough? Not trying to be smart here, genuine question. Did not know the numbers though, thanks. The situations aren't as alike it seems as people (myself included) are making it out to be. But they're not completely unalike and people remember history ...
- rbehrends 11y agoSorry, I meant to write reparations, not sanctions. Reparations to help restore the economies of those countries that the Third Reich had looted and pillaged and left in ruins.
- Rondom 11y agoI think this article also gives some insight into the differences. http://www.theguardian.com/commentisfree/2013/feb/27/greece-spain-helped-germany-recover http://www.theguardian.com/commentisfree/2013/feb/27/greece-...