Wednesday, March 18, 2015

Paying For Grandfather's Mistakes

In recent days, because of the hyped-up discussion over Germany and Greece....I've done a fair amount of reading. Because of Greece's current economic crisis.....politically motivated folks in Greece have grabbed upon this idea of reparations that Germany owes since WW II.

There are three sides to this discussion.

First, the discussion over people killed in Greece because of the Nazi army.  There was a 115 million DM payment agreement in 1960 that covered people killed and infrastructure.  It was signed off and most folks agree that you can't go back and revisit this episode over dead Greeks and blown-up bridges/buildings.

Second, there's this talk over what the Nazis took out of the Greek National Bank.  Few Greeks grasp the paperwork trail on this.  The Germans didn't come in and basically rob the bank....which is the typical way you steal money in war operations.  They arrived....had a chat....and asked for a loan from the Greek National Bank (not the Greek government) to the German government.  It's a loan.....period.  On this paperwork is the interest rate involved....ZERO percent.

We can argue about the intent here....if the Germans would have ever paid this back or when they would have ever paid the money back, but on paper, it was a loan with zero percent interest.

In today's world.....this equals roughly fourteen billion Euro (considering growth and relationship to the Euro).....note: 2012 numbers used here in this discussion.

If interest was involved?  Well.....the best and most reasonable guess that I've seen is around is roughly 100 billion Euro (using 3-percent as the rate of interest).

But we come to this odd circumstance....Greece passed a law years after WW II over the Greek National Bank.  The most that the Greek government can own or claim is 35-percent ownership....the rest is private or internal.

So, let's go with this odd scenario.  Greece claims Germany hasn't paid the loan back, and Germany agrees to pay the 14-billion back (no interest, as the paperwork claims).  The people of Greece and the government.....can at best....only grab 35-percent of the fourteen billion Euro.....figure five billion Euro at best.  What can Greece do with five billion?  They can enjoy roughly five days of no austerity and then get back to the reality of no way of solving their mess.

Let's go to the second scenario.....that they actually invent a new law out of thin air which says the whole fourteen-billion must be handed from the Greek National Bank to the Greek people.  Everyone gets some check for a couple thousand Euro and it's all flushed out in a matter of thirty days.

Let's go to the third scenario.....somehow, they convince the Germans to pay with roughly 100-billion is paid out.  That stalls the mess that the Greeks are in for a couple of months, but then they right back into austerity conditions.

The third angle of view?  It's a curious thing that developed yesterday.....both the SPD Party and the Green Party of Germany came out and said they want a committee to view the whole discussion over the bank loan.  Chancellor Merkel and the CDU/CSU?  "No way" was the commenting of last night and I don't see the German public in any sort of friendly way accepting more talk over paying the Greece WW II money.

I come to this personal view of German society in 2015.  The majority of people.....well over seventy percent of the adult population sees no personal responsibility of themselves or their society to WW II or the Nazis.  Whatever their grandfather or grandmother did.....was their own stupid fault, end of discussion.  There's a fair amount of hostility and frustration today.....seventy years have passed and no one thinks much over WW II today.

If you walked into some pub and watched a forum wouldn't go very lightly for Germans paying back the Greeks for the bank loan.  For some political party to grab onto this as a topic?  Both the SPD and Greens would suffer because of independent voters seeing this as a big negative.  Right now....the AfD is picking up votes across the country because of the immigration and refugee situation.  If you added the Greek reparation deal.....this would help the AfD pick up more votes in 2017 (from both the SPD and Greens).

It is an odd situation.  Why classify this as a loan?  What was the Nazi leadership viewing to put this on paper, and insist on zero-percent interest?  Why not just rob Greece and take the money?  The paperwork leaves a trail and I'm of the mind that the fourteen-odd billion Euro probably is owed.  But here is the odd factor in this whole discussion......if the Greek public can only claim thirty-five percent of the doesn't help or fix anything.  It's one single pea in a bucket that could hold 1,700 peas.

If I were the Germans.....I'd send some guy over....let them know that fourteen billion Euro of debt from the money absolutely forgiven.  End of the story.  Then what?  Tomorrow....the sun will rise in Greece and they are just as deep of trouble.  The debt thing paid back.....didn't really fix much of anything.

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