July 5, 2015
In this must read July 4th interview in Die Zest of economist Thomas Piketty [ed: prior link taken offline – ZeroHedge has a copy] who in suggesting an Europe wide conference to look at all debts in the Eurozone which includes debt relief, makes the following historical points:
1. Germany has never repaid all its debts after either world war 1 or 2.
2. 60% of the debts to Germany were cancelled in 1953 and internal debts restructured.
3. The decision to cancel the debts were not for moral reasons but a rational economic and political decision to “break the rules” to ensure that Germans did not have to suffer for a generation or more (ed: and to mitigate the risk of another Hitler rising and destroying the whole continent)
4. German’s post-war “miracle” was directly linked to the debt cancellation and offers a pertient example of how to get Greece out of the trap it is in.
5. Germany did not forgive France in the Franco-Prussian war of 1870 and France suffered for decades under this debt
Germany has a history of not paying its debts (implicitly theatening to do another Hitler and take everyone down if its debts are not forgiven.)
Yet after having prospered due to its debts being cancelled which can likewise help Greece now, rather than still saddled with debts from generations ago, it now hypocritically now lectures others on rules and the virtues of austerity while knowingly condemning other nations for decades (as it did with the French in the 19th century) in the name of “rules”.