June 21st, 2012, 12:35 PM #1
Germany, Greece, and the MARSHALL PLAN.
There is a myth of pinpoint bombing at least when applied to World War II. Actually, Allied bombers had to fly at night, could not fly close to ground for fear of being shot down over Nazi Germany and needed to divest themselves of ordinance to ensure enough fuel to return to base.
Let me not digress too much. The bombing crews dropped their loads somewhere near their target and got out as quickly as humanly possible while the sky lit up around them. By the end of the War, most of the damage was done to residential housing-- which needed to be rebuilt. Germany survived World War II with 80% of its industrial plant still intact.
At the same time, Nazi Germany stripped any country it occupied--with the partial exception of France-- of any industrial machinary Germany needed and could be moved. As the war was ending, Germany destroyed as much as it could while withdrawing. It even gave orders to burn Paris [book and movie Is Paris Burning?], but the order was not obeyed. It was with Warsaw.
Now, after the War, it was to get its debt all but wiped out.
Germany, Greece and the Marshall Plan
Jun 15th 2012, 13:48 by Albrecht Ritschl | London School of Economics
Albrecht Ritschl is professor of economic history at the London School of Economics and a member of the advisory board to the German ministry of economics.
Excerpted by DOOG from>>>
Economic history: Germany, Greece and the Marshall Plan | The Economist
....... The financial core of the Marshall Plan was something much, bigger, an enormous sovereign debt relief programme. Its main beneficiary was a state that did not even exist when the Marshall Plan was started, and that was itself a creation of that plan: West Germany.
What happened to this debt after World War II? Here is where the Marshall Plan comes in. Recipients of Marshall Aid were (politely) asked to sign a waiver that made U.S. Marshall Aid a first charge on Germany. No claims against Germany could be brought unless the Germans had fully repaid Marshall Aid. This meant that by 1947, all foreign claims on Germany were blocked, including the 90% of 1938 GDP in wartime clearing debt
In 1953, the London Agreement on German Debt perpetuated these arrangements, and thus waterproofed them for the days when Marshall Aid would be repaid and the European Payments Union would be dissolved. German pre-1933 debt was to be repaid at much reduced interest rates, while settlement of post-1933 debts was postponed to a reparations conference to be held after a future German unification. No such conference has been held after the reunification of 1990. The German position is that these debts have ceased to exist.
Let’s recap. The Marshall Plan had an outer shell, the European Recovery Programme, and an inner core, the economic reconstruction of Europe on the basis of debt forgiveness to and trade integration with Germany. The effects of its implementation were huge.
While Western Europe in the 1950s struggled with debt/GDP ratios close to 200%, the new West German state enjoyed debt/ GDP ratios of less than 20%. [Emphasis suplied]This and its forced re-entry into Europe’s markets was Germany’s true benefit from the Marshall Plan, not just the 2-4% pump priming effect of Marshall Aid. As a long term effect, Germany effortlessly embarked on a policy of macroeconomic orthodoxy that it has seen no reason to deviate from ever since.
Europe should learn from history. But it needs to learn fast. There might be no recovery unless debts are reduced to manageable proportions. That is what ended the Great Depression in Europe in the 1930s, and that is what in all likelihood is needed again.
The survival of Germany's industrial plant coupled with the de facto forgiveness of its debts-- including the National Gold Reserves it stole from the National Bank of Greece during the occupation of Greece-- were major factors in Germany's post-War "economic miracle".
Last edited by MegalosSkylaki; June 21st, 2012 at 06:13 PM. Reason: Brevity is Golden.
June 22nd, 2012, 01:03 AM #2
Occupation LoanMonday, 10 October 2011 00:00
Germany Should Pay its Long-overdue Obligations to Greece
In October 1940, Greece was dragged into the Second World War by the invasion of its territory by Mussolini. To save Mussolini from a humiliating defeat, Hitler invaded Greece in April 1941.
Greece was looted and devastated by the Germans as no other country under their occupation. The International Red Cross has estimated that between 1941 and 1943 at least 300,000 Greeks died from starvation – the direct result of the plundering of Greece by the Germans. Mussolini complained to his minister of foreign affairs Count Ciano “The Germans have taken from the Greeks even their shoelaces”.
Germany and Italy, in addition to charging Greece exorbitant sums as occupation expenses, obtained forcibly from Greece a loan (occupation loan) of $ 3.5 billion. Hitler himself had recognized the legal character of this loan and had given orders to start the process of its repayment. After the end of the war, at the Paris Conference of 1946 Greece was awarded $ 7.1 billion, out of $ 14.0 billion requested, for war reparations.
Italy repaid to Greece its share of the occupation loan, Italy and Bulgaria paid war reparations to Greece, and Germany paid war reparations to Poland in 1956 and to former Yugoslavia in 1971. Greece demanded from Germany payment of the occupation loan in 1945, 1946, 1947, 1964, 1965, 1966, 1974, 1987, and in 1995. However, Germany is consistently refusing to pay its obligations to Greece arising from the occupation loan and war reparations. In 1964, German chancellor Erhard pledged repayment of the loan after the reunification of Germany, which occurred in 1990.
Indicative of the current value of the German obligations to Greece are the following: using as interest rate the average interest rate of U.S. Treasury Bonds since 1944, which is about 6%, it is estimated that the current value of the occupation loan is $163.8 billion and that of the war reparations is $332 billion. The French economist and consultant to the French government Jacques Delpla stated on July 2, 2011, that Germany owes to Greece 575 billion euros from Second World War obligations (Les Echos, Saturday, July 2, 2011). The German economic historian Dr. Albrecht Ritschl warned Germany to take a more chaste approach in the euro crisis of 2008-2011, as it could face renewed and justified demands for WWII reparations (Der Spiegel, June 21, 2011, guardian.co.uk, June 21, 2011).
The Germans did not just take “even their shoelaces” from the Greeks. During WWII Greece lost 13% of its population, some of it in battle, but mostly from the famine and from German war crimes. The Germans, murdered the population of 89 Greek villages and towns, burned to the ground over 1,700 villages and many of their inhabitants were also executed, they reduced the country to rubble, and looted its archeological treasures.
We request the German government to honor its long-overdue obligations to Greece by repaying the forcibly obtained occupation loan, and by paying war reparations proportional to the material damages, atrocities and plundering committed by the German war machinery.
Sign the petition
Last Updated on Thursday, 27 October 2011 23:08
June 22nd, 2012, 11:54 AM #3
If you ever watch the old WW2 documentaries, the bombs are landing in orchards, fields, wherever... It seems it was luck that they hit anything a all.
If Germany should pay Greece, then Switzerland (and others) should pay Israel for laundering the valuables stolen from Jew's... including gold from the teeth of victims of Nazi ovens.
My point is, there is no point in going back. Greece is screwed, and no amount of money will help. It's the attitude that has to change.Obama: The rich have the Federal Reserve and the poor have Harry Reid... LOL. Life really is unfair!
June 22nd, 2012, 12:37 PM #4
Switzerland was forced to return Billions of dollars to Jewish victims about ten--fifteen years (?) ago for monies it was conveniently still holding.
The Gold Reserves stolen from the National Bank of Greece by Germany has still not been returned. There is a whole history of efforts to have the money returned but at the end of the day--despite all promises to the contrary--Germany was deemed far more important an ally than Greece, a variation of the "Might makes right and Justice the interest of the stronger" theme.
June 22nd, 2012, 12:51 PM #5
Switzerland and its relationship with Nazi Germany--even when it was clear clear that Germany was collapsing and was in no position to invade Switzerland-- is a matter of historical record as is the long drawn out effort by Jewish groups to recover dormant accounts of Jews who disappeared and probably perished.
SEE>>> Switzerland and the Unfinished Business of World War II - Murray Gordon Silberman
Now that the banks had acted, it was the turn of the Swiss government to show its hand. On March 5, 1997, the government proposed the creation of a $4.7 billion fund and to use the interest on the money to help victims of the Holocaust and other calamities. The plan, which was warmly welcomed by the WJC and other Jewish organizations, was the boldest financial move by the Swiss to gain moral high ground for their country's dealing with Nazi Germany. The money for the fund, named the Swiss Foundation for Solidarity, did not represent new spending but was derived from the higher monetary value the Swiss placed on their monetary gold holdings. The interest from the fund, according to Swiss President Arnold Koller, would "be destined for victims of poverty and catastrophes, of genocide and other severe breaches of human rights, such as, of course, victims of the Holocaust."
June 23rd, 2012, 10:10 AM #6
Greece debt crisis: Greeks believe Germans owe them £60bn | Mail OnlineHitler’s men even raided the Greeks’ central bank, forcing them to give Germany a massive ‘war loan’ — one that has never been paid back, more of which later. Economists estimate that if it were repaid today, it could cost the German government £60billion. The memory of that travesty has been reignited this week by Greeks angry at the austerity measures being imposed on them — primarily by Germany as it seeks to stop the euro crisis spinning out of control
Read more: Greece debt crisis: Greeks believe Germans owe them £60bn | Mail Online
Balkans Campaign | World War II Database
Last edited by MegalosSkylaki; June 23rd, 2012 at 10:25 AM.
June 23rd, 2012, 10:59 PM #7
Great posts Doog. But I"d expect no less from our purple Greek dog."Sometimes life is just what we make it."
June 24th, 2012, 12:30 AM #8
For Whom the Bell Tolls
Yet lest anyone think I am hostile toward Germany, I would point out the terrible solidarity that binds all Humankind. Germany's economy is based on exports and its major customers are Europeans. As the other economies falter one by one in a mindless Austerity Plan that thinks it can save the Euro by destroying the economies that use it as a means of exchange, as the economies of one Country after another contract into deeper and deeper recession and borders on Depression, who will Germany export to and at what price?
Germany falters as eurozone slowdown deepens
German manufacturing activity has slumped to a three-year low, raising fears that Europe’s powerhouse economy could have tumbled into recession during the second quarter of the year.
By Louise Armitstead, Chief business correspondent
11:24AM BST 21 Jun 2012
As a whole, Germany’s private sector shrank for the second month in a row in June, falling to its lowest point since the height of the financial crisis in 2009, data out on Thursday showed.
Economists fear the eurozone debt crisis may finally have taken its toll on Germany, despite it recording growth of 0.5pc in the first quarter.
Markit Economics’ combined manufacturing and services Purchasing Mangers Index (PMI) fell to 48.5 in June from 49.3 in May, dropping further below the 50 level which divides expansion from contraction.
Manufacturing was the biggest pull; its PMI reading fell to 44.7 in June from 45.2 in May – the fastest contraction since June 2009.
Manufacturers indicated a steep and accelerated downturn in new export business during June, with the pace of reduction the fastest since April 2009.
Germany’s services sector, which has been resilient during the debt crisis, almost stagnated last month, the data showed. Its PMI was 50.3, down from 51.8 in May, and signifying the least activity since November.
Tim Moore, an economist at Markit, said: “German manufacturers were at the forefront of the downturn, as a worsening global economic backdrop and the continuing euro crisis weighed heavily on export demand.”
He said that although fears of Greece crashing out of the euro had been assuaged by the election results at the weekend, “there nonetheless seems a deepening consensus among German businesses that the euro area turbulence has already damaged their growth prospects for the latter half of 2012.”
The German government has said it expected the economy to grow steadily throughout 2012.
This latest data may pile pressure on the European Central Bank to consider a cut in its interest rate at its next meeting in early July.
Germany fears Inflation--and by that I mean the hyper-inflation that destroyed the Weimer Republic and led to the rise of Hitler-- as much as we fear Depression.
We use 'stimulus' by cutting interest rates to bolster the economy when it starts to falter. Germany raises interest rates at the first sign of rising prices.
Unless it realizes how much it has at stake by the contraction of the economies that surround it--even if it doesn't want to see the soup kitchens and breadlines in Europe--it will soon find itself priming the pump with cuts in interest rates and confront its worst fear.
"When a greengrocer in Prague is shot, the life of a postal clerk in Paris is in jeopardy" --Albert Camus
To paraphrase, when the pharmacies in Athens close, the drug manufacturers in Frankfurt are in trouble. So are their employees.
June 24th, 2012, 01:34 AM #9
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Germany will survive, but at what cost to the rest of Europe? I fear the EU will fail and a new, expanded Germany will arise. What they couldn't do through war, they may be able to due through the banks.
June 29th, 2012, 10:25 AM #10
At the European Summit a seeming shift in strategy away from Merkel's Dickensonian "Austerity" programme by which European economies are being ground into the ground and a possible shift toward development as a strategy for working out of the Great Recession--which for several Countries is bordering on Depression.
Europe summit surprises with bold moves: Associated Press Business News - MSN Money
Could the DOOG have readers in Europe?
July 3rd, 2012, 12:02 PM #11
Blaming the Victim.
For the record, DOOG opposed the Greek entry into the Common Market as it economy was not up to competing with tecnologicaly advanced countries with populations five to ten times it size. Other small countries in Europe seem to want to make the same error and I wonder if the reason has something to do with why countries sought out colonies in the 19th Cent.-and usually lost great money on them--which is for that most elusive of benefits: "Prestige".
Greece as Victim
By PAUL KRUGMAN
Published: June 17, 2012
Ever since Greece hit the skids, we’ve heard a lot about what’s wrong with everything Greek. Some of the accusations are true, some are false — but all of them are beside the point. Yes, there are big failings in Greece’s economy, its politics and no doubt its society. But those failings aren’t what caused the crisis that is tearing Greece apart, and threatens to spread across Europe.
On the other hand, many things you hear about Greece just aren’t true. The Greeks aren’t lazy — on the contrary, they work longer hours than almost anyone else in Europe, and much longer hours than the Germans in particular. Nor does Greece have a runaway welfare state, as conservatives like to claim; social expenditure as a percentage of G.D.P., the standard measure of the size of the welfare state, is substantially lower in Greece than in, say, Sweden or Germany, countries that have so far weathered the European crisis pretty well.
So Greece, although not without sin, is mainly in trouble thanks to the arrogance of European officials, mostly from richer countries, who convinced themselves that they could make a single currency work without a single government. And these same officials have made the situation even worse by insisting, in the teeth of the evidence, that all the currency’s troubles were caused by irresponsible behavior on the part of those Southern Europeans, and that everything would work out if only people were willing to suffer some more.
The only way the euro might — might — be saved is if the Germans and the European Central Bank realize that they’re the ones who need to change their behavior, spending more and, yes, accepting higher inflation. If not — well, Greece will basically go down in history as the victim of other people’s hubris.
July 3rd, 2012, 03:37 PM #12
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