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Emet m'Tsiyon

Sunday, July 05, 2015

Germany benefitted from debt relief but it is ruled out when for Greece's benefit

UPDATING 7-13-2015 at bottom

The Greeks are still voting on the referendum whether or not to accept proposals by the creditor institutions for getting another tranche [slice] of loan money to pay off previous loans. Note that Greece was not offered money to finance growth, such as in developing Greece's off shore hydrocarbon deposits. Greece is being offered money to pay previous debts to those who are offering new loans. So Greece is in a vicious circle or trap.

The help that Greece needs is debt relief and funds to aid growth and development. Indeed, former Italian Prime minister Berlusconi --interviewed yesterday [by TG com 24]-- wished Greece to have a future of growth and sviluppo [= development]. But the creditor offers to Greece did not include aid for growth, without which Greece cannot pay off old loans in the future. Instead, they insist that old loans be paid. Debts must be paid is the principle that they pretend to uphold. But how short are their memories, especially those of the Germans!!!

After the general destruction caused by WW2, a German war, in all the countries attacked, and in Germany itself as well, West Germany, occupied by the USA, UK, and France, was loaned $15 billion in Marshall Plan money when a billion dollars was worth much more than today. All but a small part of that loan was forgiven and the rest stayed in Germany as so-called counterpart funds which were used by the USA to finance projects in Germany to help Germany. Moreover, under US leadership, the formerly German-occupied countries agreed to forego reparations payments. They gave up on their demands for compensation from Germany for material damages. Peter Coy describes the spirit of US policy:
On Sept. 6, 1946, U.S. Secretary of State James Byrnes gave a speech in Stuttgart, Germany. A movement was afoot to penalize the Germans for their role in World War II by deindustrializing the country. Byrnes opposed anything resembling economic spite and promised the country a fair chance to rebuild. “Germany is a part of Europe,” Byrnes said, “and recovery in Europe will be slow indeed if Germany with her great resources of iron and coal is turned into a poorhouse.” It became known as the Speech of Hope. [Peter Coy in BloombergBusinessWeek]
Greece too was led by the US to give up its demands for compensation as well as for return of gold reserves and forced loans taken by the German occupation army from the Greek state central bank.
Hence, we see that Germany enjoyed and benefitted from debt forgiveness after the vast destruction caused by WW2. But today Greece must not benefit from debt forgiveness nor even from debt restructuring to extend pay back periods and/or to reduce interest on old debt.

What's more nobody seems to want to recall that after WW One, also a German war, Germany agreed to pay reparations to France. The sum was huge and it seemed so to the German governments in the 1920s.  So what did the German govts of the time do to alleviate their debt, that is, to get debt relief?
They devalued their own currency, the deutschemark, and the French were paid off in cheap, nearly worthless deutsche marks. Greece cannot do that since its debt is denominated in euros and Greece's govt does not control the value of the euro which it cannot devaluate by its own decision.

Here is another example of how Germany benefitted from debt relief which it rules out when it is for the benefit of Greece. And the other major countries in the Eurozone go along with the present absurdity of creditors trying to squeeze blood from a stone.

Can Israel expect any humane treatment from diamond-hearted, self-righteous hypocritical Europeans?
- - - - - - - - - - - - - -
Also see links below:
European Union knows what is best for everybody else but cannot or does not want to solve some of its own problems. [here]
Eurozone is stingy with Greece, generous with Arabs claiming the Land of Israel [here]
Eurozone betrays its Greek Eurobrethren. What would they do to the Jews? [here]
Why Greece should vote No [here].
Was it deliberate policy to impoverish Greece by putting it into a debt straitjacket? [here]
See analysis by Committee for Abolition of Third World Debt towards bottom of link [here]
- - - - - - - - -
UPDATING 7-13-2015 Investment fund manager David Einhorn sees political motives in the
Eurozone working to have Greece fail even if it hurts the rest of the Eurozone.
David Einhorn, founder of Greenlight Capital, said Europe’s leaders are prepared to let Greece fail to discourage other countries from electing populists.
“Europe is unwilling to allow Syriza a face-saving compromise, even if that means Greece collapses and the rest of Europe suffers” [Bloomberg here]

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