Rantings and tirades of a frustrated economist.
WWII reparations from Germany: Because demanding reparations from Germany after WWI worked out *so* well.Not only is Greece's economics wrong-headed, they're now ignoring history. This will end in tears.
Too bad for Greece, the issue of German liabilities resulting from WW2 has already been finally settled by a number of treaties along the years, treaties the Greek state has recognized. And even if that wouldn't be the case, there is no consensus within international law as to whether a state inherits liabilities across regime changes where the new government doesn't recognize the legitimacy of the old. Any historical precedent one way or the other has little to do with any international legal facts and everything to do with whether geopolitics allowed the new regime to get away with not paying. Communist governments have been particularly good at getting away with it. Pre-Communist Cuban government bonds are still traded on financial exchanges for cents on the dollar.Congrats to Tsipras, you've just sunk Greece's credit rating even further. Who's going to lend money to you if you keep making up pretexts for why the lender owes you and therefore you shouldn't have to pay? That's exactly what this is about, otherwise this forgotten issue wouldn't have resurfaced just now, of all possible times.
Maybe I should have added, regardless of whether one deems there to be a legal continuum between Nazi Germany and the Bundesrepublik, and even if no postwar treaties existed on German war liability, it still would not follow that Germany owes Greece anything.Getting war reparations is not an internationally established right. There is no universal international treaty that imposes legal liability for damage a state inflicts on another through war. The fact that countries have sometimes obtained war indemnities has nothing to do with international law and everything to do with the fact that the payer either chose to for diplomatic purposes, or (more commonly) lost the war and was coerced to pay up.
Everyone saw this coming, a parasite always condemns the host. I predicted Greek would use WW2 as an excuse to bail out on their loan obligations for atleast another two months. I underestimated them. I actually thought the smartest course of action was for Germany to exit the Euro five years ago and get the Deutschmark going again. They would have taken a hit in the short term, but by now they probably would be steaming along and be poised to be the superpower in Europe. But now they can't back out if they wanted to exit the Euro, everyone will accuse them of being bullies (and they would be correct) and then leave the EU in a mess, thus seen as purposely sabotaging the EU. So it will be Greece that gets the boot and everyone will hate Germany for not wanting to support shoveling more money at Greece to shut them up. This is the perfect example of why you cut your loses early when you make a major mistake.
I suspect that this reparations gambit is just a tit for tat play to get their own debt forgiven in exchange for not demanding reparations.Greece wants debt forgiveness.
Greece is a parasite. But a nation or bank that makes a loan it knows can never be paid back deserves exactly what it gets in the end.Those enabling run away deficit spending in the U.S. should take note.
Greece has done the only thing it could. The financial assistance was structured to come in one door and go out the other to creditors, with no dwell time. The result was that what liquidity there was dried up. No liquidity, no business.A monetary union involving the world's strongest economy, Germany, and one of the weakest, Greece, was doomed to failure. The faster Greece gets out of it the better. The consequences will be bad but the consequences of remaining in the EU are worse.For sure, the current left-wing government will make things much much worse.The same logic applies to the continued presence of e.g. Italy in the EU.The European Common Market was a success. It is very unfortunate that it was extended to a currency union - because of the dreams of empire of the eurocrats in Belgium. They should have learned from Charlemagne, Louis XIV, Napoleon, and Hitler.
He's wrong to ask generations of today to pay for their ancestors wrongs but the whole agenda of the Euro was to devalue the currency of stronger exporting countries (Germany) at the expense of the poorer & less disciplined ones (southern Europe).Those dumb communist countries fell for it thinking they could get something for nothing (as commies do) all the while the smart Germans plotted this to increase their exports & thus their people benefit most.
The problem with the EUROZONE is that they only unified the monetary policy, not the fiscal policies.In addition to have a single currency, they need to have a single fiscal policy.Otherwise, rich and fiscally conservative nations like Germany will always have to bail out fiscally loosened nations like Greece.Brussels must dictate both Greece's and Germany's policies.They also must dictate interstate commerce spreads. The fact that Germany took advantage of it's productivity to wipe out less productive Greece in the market place is also a non-sustainable situation.If this is not possible then the EURO was a failed experiment with the seeds of it's own destruction built-in.
A currency union doesn't necessarily benefit Germany at the expense of less competitive Eurozone countries. Differences in price level within a currency zone can have the same effect on exports as having a devalue-able currency of your own. If the free market was able to have its way, the Greek price level would drop to where Greece becomes competitive again, regardless of whether it uses euros or drachmas.
"...Not only is Greece's economics wrong-headed, they're now ignoring history..."Socialists of ALL stripes have been ignoring history (especially history that they disagree with or don't like) for over two centuries.And if they aren't allowed to ignore it, then they try to rewrite it...
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