Editorial: Iconic Photos has been first and foremost a history blog and here it looks back at millennia of messy defaults.
History of sovereign defaults tends to begin with Dionysius, the ruler of Syracuse in Greece during the fourth century B.C., who had an entertaining habit of stamping two-drachma mark on one-drachma coins to pay of his debts. Around the same time, thirteen Greek city states defaulted on their loans from the Temple of Delos — the first recorded default in history. In the modern era too, Greece never enjoyed sound finances; it defaulted at least five times (1826, 1843, 1860, 1894 and 1932), and the messiest default in 1826 shut it out of international capital markets for 53 years.
However, it’s a more recent nightmare that haunts the Greek psyche today — that of German domination. The country which suffered mightily under the Nazi rule seems to be invoking those painful memories this November as northern european countries demand austerity measures from their floundering government. A giant swastika looms over the Acropolis on the cover of fittingly-named Crash magazine. Horst Reichenbech, the German head of the European Task Force on Greece, has been portrayed as a Wehrmacht officer on the cover of another, and called a gauleiter, a Nazi term for a regional governor. On my last visit to Athens, a favored phrase there seems to be “The Germans are coming” a title of an influential post-war Greek film, where a former partisan often wakes up from his nightmares uttering just that.
Despite deep positive relations over the last five decades — which included the German government shielding political dissidents from the Greek junta — the Second World War casts a long and grim shadow over the Greek psyche. The German tabloid Bild’s pointed suggestion that the Greeks sell the islands and the Acropolis did not help assuage the rumors that German banks are waiting to liquidate the Greek state’s assets.
Their fears may be irrational, but are not without precedents. Newfoundland lost nothing less than its sovereignty in 1936 when it messily defaulted after falling fish prices. The oldest parliament in the British Empire after Westminster was quietly abolished and a trusteeship was imposed on 280,000 people who had known 78 years of direct democracy. A la Occupy Wall Street, the islanders stormed their defunct parliament and tried to lynch their prime minister, who only narrowly escaped this fate by running down an alleyway ignominiously.
Although not quite to the same extreme as Newfoundland, Egypt, Greece, and Turkey sacrificed partial sovereignty as regards government finance to England following their nineteenth century defaults. The United States established a fiscal protectorate in the dominican republic in 1907 in order to control the customs house, before occupying the entire country in 1917. The US also intervened in Haiti and Nicaragua to control the customs houses and obtain revenue for debt servicing. Such were the halcyon days of gunboat diplomacy.
This blog believes that Germany and her investors has profited deeply from the euro at the expense of their Mediterranean neighbors. Without the euro, Italy and Greece could have indulged their workers with higher and higher bonuses while sporadically devaluing their currencies and making their countries more competitive. The euro prevented that. The only benefits from the euro went to Germany, where a low performing periphery weakened the currency, which made German exports extremely attractive abroad. Like China, Germany’s competitive edge had currency manipulation at its heart. Therefore, it is both hypocritical and pusillanimous for the Bundesbank and the German Chancellery to shriek their responsibilities now. After all, they partially concocted this ungodly brew and time has come for Berlin to taste its own medicine.
14 thoughts on “What They Are Reading in Greece”
Nonsense. http://www.economist.com/node/21536868. Spreading this Nazi stuff second hand demeans you.
Where are you coming from? If I say you’re calling your neighbor an atheist, am I spreading atheism? I’d say quoting the economist demeans one.
Bravo. Also, wealthy Greeks have grossly underpaid their fair share for decades. Now, the working class is being asked to pay for these crimes. The song remains the same.
You can’t say that Italy and Greece would have been able to pay better wages AND devalue if not for the Euro. The Euro was the cause of the better wages in the first place. And it’s nonsense to say that the ONLY benefits of the Euro went to Germany. The other countries in the Euro had cheap access to credit for years, and that is certainly worth much. (Wouldn’t it benefit you if you could suddenly get better rates on any loan you wanted? You would have opportunities you didn’t have before.) When Spain had full employment, rising wages, and rising standards of living, I think you would have been hard pressed to find a Spanish economist who would tell you that Spain was receiving no benefit from the Euro.
Things have taken the opposite turn now and Germany needs to remove its head from its rear end if it wants to save the Euro, but you can’t rewrite history to say that no one else ever benefitted from it.
Yes, Spain profited hugely, but it seems to have been a mirage. It was maybe 5 years ago or more that I went around Google asking for an explanation of this Wirtschaftswunder, economic miracle. I even went to an economics forum asking whether there existed a definition of wealth.
I am Swiss, but live here. Since for some 4 or 5 years the interests paid by banks on savings were lower than the rate of inflation, everybody took out loans to build or at least to buy building plots and garages.
Now, as they are losing their jobs, when up to now both had been working ………? And of course, no children. Can’t afford them.
Most visible already now: immense small town infrastructres, highways, parks, government buildings unpaid and very very expensive to maintain….
My Dear Comrades,
I remember back in the Bad ol’ Days the British went to the Germans an said to them that they wernt payin their war reparations fast enough and so, they wanted to take the machinery out of 20 factories, bring it to England an that would bring things up to snuff……Well, there was some discussion among the German engineers and after about a week they said, “OK, go ahead and take it”, which surprised everyone.
You see, nobody expected them to say “Go ahead and take it”..but them Germans was lookin at the positive: “Take this crap outta here so’s we can put new better stuff in its place”. They did and look at them now!
I think that whats fair is fair. Everybody wants to punish the Germans for bein smart. The Greeks are some good people but they take their money and use it to make money other places and dont put enough back into home…The Germans are Good people too, but they make money at home and use the profits to buy American companies and then reinvest it back home and what-not.
Now I say people need to give credit where credit is due!
Hell I just attended a shootin match in Germany an all I saw was excellence! The Food was dirt cheap, the restaurant prices almost free, store prices cheap and everybody working and happy.
Hell, I went to a restaurant and paid 1 Euro and 20 cents for a huge wurst a ton of salad and got a free beer to boot! (Now that might O’ Been cause I’m somewhat of a “Personality” over there and what-not) But, I ate a half of a rotisserie chicken at another place for 2 euros and 50 cents! I went to the store and bought some wieners that cost 7.00 a pound here for only a 1.50! It was like that with everything! (Hell, even my rental car for 12 days was only $99.00 an it was a BMW Turbo Diesel!!! and for that price its cheaper to rent than to lease!) I also stayed in a nice villa for 10 euros a day that included meals!
So, are the Germans gouging ??? Seems to me their passin on their prosperity to the people!
I just couldn’t believe that the same place I left in ruins back in 1945 looked like Disney everywhere I went…and everybody called me Sir…an the latrines were clean enough to perform brain surgery in.
I say that if indeed they are ruling then let them rule. These other countries just might come up a notch or two. (Especially the French, who gouge Americans like its their Hobby!)
Your Obt. Svt.
Chief of Mayhem in the Great WW-2,
Now Chief O’ Sanitation, Security an the Complaint Dept,
P.S. I dont think them Germans are goin to let anything happen to Greece…after all, its where a lot of them go for Holidays and so I think they will step up to the plate an bail them out after all….
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MAKE THE GERMANS PAY!!!
The Germans were the biggest deadbeats of the Twentieth Century. According to Albrecht Ritschl in an interview from Der Spiegel Online, http://www.spiegel.de/international/germany/0,1518,769703,00.html Germany defaulted on more debt than anyone else, Reparations after World War I, loans from the US in the twenties, and their refusal to pay reparations after reunification in 1990 as had been promised in the London agreement after World War II. Germany was not pressed to repay these debts after 1945 because the leaders of the time recognized that peace and reconstruction were more important than bankers profits. In addition Germany received massive amounts of aid from the Marshall Plan to rebuild.
We should remember that the German Occupation of Greece was particularly cruel, as cruel as what they did in Russia. Over 10% of the pre-war population of Greece died during those four years. From the deportation and massacre of the Jews to the wiping out of whole villages in retaliation for actions of the Resistance to massive starvation of the civilian population because the Germans took all the foodstuffs for themselves.
The massacre of the Jews was almost complete, in Salonika 96% of the prewar population were murdered in Auschwitz. While it is true that the Germans paid reparations to the very few survivors, they have not paid Reparations to the Jewish Community as a whole or to Greece for destroying the economic engine, the Sephardi Jewish traders, who for 400 years had brought prosperity to the Macedonian region.
Now it is time to apply the lessons of 1945, in the interests of peace and reconciliation Germany should take over the entire debt of Greece and fund a large public works program all over Greece to get the economy moving again.
The Germans need to prove that they are real Europeans and pick up the tab, even if it takes another 100 years. Why should Germany’s debt be forgiven, which gave Germany a new start and led to the boom there; and the debt of Greece and the other peripheral countries be enforced, which will create a lost generation of European youth.
The fact still remains that Germany is still the biggest deadbeat on the continent. Why should their debt be forgiven and Greece’s debt be enforced. Thus creating a lost generation of European youth.
Yes it is true that the War ended 66 years ago. However the Germans killed not only the most dynamic people but their children and grandchildren who were never born. The affects are still felt today.
All of Europe is in one boat. If Greece falls it will take the rest of the world with it. It is more economically efficient to make the Germans pay.
A Marshall type plan for all of the countries facing difficulties will help them and keep German industry humming and the economies from failing.
Let’s not repeat 1931 when the world banking system failed. The alternative is war.
you are sick!
My Dear Comrades,
That was some well said stuff! I can see that somebody is awful pissed at the Germans! (Didn’t leave His/Her name so we cant tell who it is). But the tellin tale o’ that reply is right in tha beginnin of it where the person quotes “Der Spiegel”……(The most full of crap Commie fish wrap on the planet!)
I’m not sorry that the Germans are provin that their smarter than the whole rest of Europe combined and so lets not keep beatin them up for bein so. Germany has the largest (And Best Equipped) Army in Europe and is the only thing standin in the way of our real enemies, The Russians! (Oh, I can hear some people sayin..”The Cold war is over”…LOL!) If you want to beat up on somebody now theres a country that needs a good thump on the head!
Them Ruskies (Now dont think im talkin about the common people, OK?) Is the most evil sons a Bytches that ever lived! Everybody talks about how Hitler killed the Jews but not a word about how many the Russians Killed:
During WWII Stalin killed about 8,000,000 of his own soldiers! After WWII, Stalin started a campaign of terror on the German People!. This led to about 2,000,000 German civilians being raped an Killed outright and thousands more committin suicide afterward. German POWs were kept in death camps for as long as ten years , killin at least 1,000,000 of them.
That Stalin Son of a Bytch also killed every educated person in Poland (School teachers, street car conductors, you name it!) and add to this 2 million Polish Jews! All in all then Ruskies killed 30 million of their own people and about 10 million from other countries! (An that includes about 5 million of his own Jewish people and almost all of the Kulaks (2 Million 2 Hundred Thousand!)…
SO…….What about Russia’s war Reparations???
Stalin Said, “Who’s going to remember all this riff-raff in ten or twenty years’ time? No one. … Who remembers the names now of the boyars Ivan the Terrible got rid of? No one. … The people had to know he was getting rid of all his enemies. In the end, they all got what they deserved.”
So how about stopin all this beatin up on the Germans an start gettin the Gosh Darn Ruskies to start payin up???!!!
I say to make the Russians pay their war reparations and use it to bail out the Greeks!
Your Obt. Svt.
Chief O’ Mayhem in the Great WW-2,
Now Chief O’ Sanitation, Security an the Complaint Dept,
We can start with the money that the Russians owe us (The United States) that they never paid back (20 trillion dollars and thats without 60 years interest added) Then we can tell France that we want our money they owe us for bailin them out of 2 world wars. (Thats Three Trillion – 343 Billion and change with no interest added since WW-1). Want to beat up on somebody? Lets beat up on those snooty fart sniffers! (Wouldn’t even let Steven Spielberg film “Saving Private Ryan” on Normandy sayin, “We dont want people to remember that” (!!!) Hell yeah, you Eiffel-Butt Ass-Hats! Thats cause your a Hopin that if we forget about the War, we just might forget about your DEBT!
PPS: Hay Frenchy, how about reducin the price of a big Mac. from $12.00 to somethin reasonable like say $3.00? I know that its mostly Americans that go to that MacDonalds that you have strategically located in the shadow of that Eiffel Tower of yours but that’s gouging and it might go a long way toward healin things if you made some effort to be fair toward us Americans. After all, we did save you sorry butts twice in one century and you still treat us like crap!
It is good that this thread is making people think. However calling names does no good. Talking about Stalin is irrelevant. It was the Germans who massacred the :Polish Intellegencia.
In spie of the insults, there has been no rfefutation of the fact that Germany repudiated the largest amount of debt in 1953. As an american taxpayer I am still paying that debt. Perhaps if the Germans do not wish to pay repararations to Greece and the other victimized countries from the Occupation they would like to pay back to their creditors what was forgiven in 1953.
The fact remains that the Germans, and I say Germans, not just Nazis, because most of the atrocities were commited by the German Army, The most dynamic and resourceful people, the ones who could have helped Greece progress were murdered, and thus their children and grandchildren were never born.
The only just solution is to MAKE THE GERMANS PAY!!!
This is a first-rate piece. Your photos are always excellent, but I really enjoyed learning about what those Greeks are thinking, being reminded of all the trouble das Volk brought our fathers and learning about Newfoundland. That last was a gem almost equaled by “the halcyon days of gunboat diplomacy”. Always plenty of blame to go around. If you start at the beginning, every people has been enslaved at some point. Thanks for your work here. It’s always a pleasure to find a new entry on your site.
>It was the Germans who massacred the Polish Intellegencia.
So, the Germans also did the Katyn massacre?
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