WASHINGTON POST....“Για την ελληνική κρίση η Γερμανία να μάθει από το δικό της οικονομικό παρελθόν”. // In Greek crisis, Germany should learn from its fiscal past

By Harold Meyerson
If you made a list of countries you hope have learned from their past hundred 
years of mistakes, Germany would have to be at the top.
Happily, 
the staunch opposition to a nativist fringe that the nation’s government 
and citizenry have shown in recent weeks makes it clear, again, that Germany 
understands the costs of bigotry and the virtues of tolerance.
Unhappily, it has not learned the costs of a mad adherence to fiscal orthodoxy, 
despite the fact that its prosperity is rooted in the decision of its World War II 
adversaries to allow West Germany’s postwar government to write off half of its debts

Indeed, the policies that Angela Merkel’s government have inflicted on the nations of Southern Europe could not be more different from those that European leaders and the United States devised in the early 1950s to enable West Germany to rebuild its damaged economy. Since the crash of 2008, Germany, as Europe’s dominant economy and leading creditor, has compelled Mediterranean Europe, and Greece in particular, to sack their own economies to repay their debts.

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.
washingtonpost.com