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| Germany worse than Greece on defaults? |
In a piece designed to bolster Greece’s flagging
reputation as a state teetering on the financial brink, Huffington
Post Germany released an article claiming that Germany is the real default
offender, and has no business shaming Greek culture or defaming the Greek
government for its tradition of sloth, graft, waste, and fraud.
reputation as a state teetering on the financial brink, Huffington
Post Germany released an article claiming that Germany is the real default
offender, and has no business shaming Greek culture or defaming the Greek
government for its tradition of sloth, graft, waste, and fraud.
The piece opens up with the usual litany of Greek
crises and the impending Grexit, then segues to slamming Germany’s financial
(and warlike) past:
There is a general assumption that Europe’s
future is jeopardized by “the Greeks,“ and the German newspaper Bild
did the math, converting the financial aid into truck loads: “In order to get
215.7 billion euros in bills of 100 euros on a truck to Athens, you would have
to send off 88 40-ton trucks."
future is jeopardized by “the Greeks,“ and the German newspaper Bild
did the math, converting the financial aid into truck loads: “In order to get
215.7 billion euros in bills of 100 euros on a truck to Athens, you would have
to send off 88 40-ton trucks."
All this propaganda against Athens fails to acknowledge one fact: Within the
last two centuries, the Germans, or more precisely the Prussians, have pulled
off more bankruptcies than the Greeks.
Right
away, the writer has to back away from the bald assumption of the headline.
Prussia, one northeastern Germanic state, was not the entire German state which
exists today. In fact, Prussia hugged a wide swath of the Baltic coast, and
resided in much of the territory which now lies in Northern Poland.
Then
the figures roll out:
the figures roll out:
In the aftermath of the Napoleonic wars at
the beginning of the 19th century, the Prussian treasuries were empty.
Creditors were waiting in vain for the redemption of their credits not only in
1807, but also in 1813 and 1850.
the beginning of the 19th century, the Prussian treasuries were empty.
Creditors were waiting in vain for the redemption of their credits not only in
1807, but also in 1813 and 1850.
Germany was also virtually broke after
World War I and World War II. There were four instances in which the creditors
granted massive debt relief: 1924, 1929, 1932 and 1953. Sixty-two years ago,
Chancellor Konrad Adenauer’s government negotiated with 20 states, reaching the London Debt Agreement. By the way, Greece
took part in these negotiations.
World War I and World War II. There were four instances in which the creditors
granted massive debt relief: 1924, 1929, 1932 and 1953. Sixty-two years ago,
Chancellor Konrad Adenauer’s government negotiated with 20 states, reaching the London Debt Agreement. By the way, Greece
took part in these negotiations.
In
fact, because of the hyperinflation following World War One, the German people
adopted a culture of austerity and frugality (Bloomberg News
provides a neat visual representation to explain the wide differences between
Greek and German culture).
fact, because of the hyperinflation following World War One, the German people
adopted a culture of austerity and frugality (Bloomberg News
provides a neat visual representation to explain the wide differences between
Greek and German culture).
The
final result of the HuffPo puff analysis?
final result of the HuffPo puff analysis?
Throughout its history, Greece has been bankrupt six times -– so it would
only catch up with Germany now, if no agreement with the creditors was reached.
only catch up with Germany now, if no agreement with the creditors was reached.
The
Atlantic Monthly provide
a more thorough history of Greek debt crises. Unlike the German, er. . Prussian
debt legacy, Greek financial dysfunction, debt, and ultimately default depended
on a Greek culture of conflict, mismanagement, and cultural decay.
Atlantic Monthly provide
a more thorough history of Greek debt crises. Unlike the German, er. . Prussian
debt legacy, Greek financial dysfunction, debt, and ultimately default depended
on a Greek culture of conflict, mismanagement, and cultural decay.
![]("https://www.berklee.edu/sites/default/files/huffington-post-logo.jpg.png"){kind=logo} |
First, an identity crisis:
The [Greek] revolution worked,
culminating in international recognition of a new Greek state in 1832. It also
successfully planted Hellenism as the nation’s foundational myth, reorienting
Greek speakers toward a national identity centered on the glory of antiquity.
culminating in international recognition of a new Greek state in 1832. It also
successfully planted Hellenism as the nation’s foundational myth, reorienting
Greek speakers toward a national identity centered on the glory of antiquity.
Almost immediately, problems began to
emerge.
emerge.
“[Europeans] had these exalted
ideas—‘We’re going to run into Agamemnon and Pericles’—and they were
disappointed by the Greeks,” Greene said. “There’s Europe and then there’s
Europe, and this wasn’t the right Europe.”
ideas—‘We’re going to run into Agamemnon and Pericles’—and they were
disappointed by the Greeks,” Greene said. “There’s Europe and then there’s
Europe, and this wasn’t the right Europe.”
With
a fractured, undefined national identity, followed a long estrangement of the
Greek people from their own governance:
a fractured, undefined national identity, followed a long estrangement of the
Greek people from their own governance:
That translated into the actual Greeks
being cut out of their own government. There would be no immediate reprise of
Athenian democracy. With nascent independent Greece in chaos, European powers
gathered in London and installed a king—Otto, a Bavarian prince
transplanted—and set limitations on the Greek military.
being cut out of their own government. There would be no immediate reprise of
Athenian democracy. With nascent independent Greece in chaos, European powers
gathered in London and installed a king—Otto, a Bavarian prince
transplanted—and set limitations on the Greek military.
This
last part, based in research and reporting from economic and social historians,
points out that a codependence culture of mixed identity and European posturing
has enabled Greece to slouch alog for the greater part of its existence in
default mode:
last part, based in research and reporting from economic and social historians,
points out that a codependence culture of mixed identity and European posturing
has enabled Greece to slouch alog for the greater part of its existence in
default mode:
The history
of Greek national default is inextricably tied to this troubled relationship
with Europe. As some commentators have noted, the country has been in default
for roughly
half of its existence as an independent state. The pattern is more
complicated than just a repeated failure to pay debts. It’s a recurring vicious
cycle of foolish lending by European creditors and profligate mismanagement by
Greeks going back nearly 200 years.
of Greek national default is inextricably tied to this troubled relationship
with Europe. As some commentators have noted, the country has been in default
for roughly
half of its existence as an independent state. The pattern is more
complicated than just a repeated failure to pay debts. It’s a recurring vicious
cycle of foolish lending by European creditors and profligate mismanagement by
Greeks going back nearly 200 years.
The Huffington Post article, in true bait-and-switch
fashion, finally concedes at the end of its own pro-Greek reporting that
Germany (and before that, Prussia’s) defaults came as a result of war. In
Greece, domestic and international causes, based on foundational errors and
poor rapprochement, generated a Greek legacy of debt and default.
fashion, finally concedes at the end of its own pro-Greek reporting that
Germany (and before that, Prussia’s) defaults came as a result of war. In
Greece, domestic and international causes, based on foundational errors and
poor rapprochement, generated a Greek legacy of debt and default.
![]("http://www.bloomberg.com/image/i1NS6VpgZMsA.jpg") |
| Greek Debt Crisis in Europe explained (Bloomberg News) |
Oh, and Greeks don’t pay their taxes.
Many reporters,
for example, have repeated
a claim
that tax-shirking was a patriotic gesture in Ottoman Greece, a way to resist
Istanbul’s authority. It is true that an
inability to effectively enforce tax laws has drained the Greek government
of revenue. . .
for example, have repeated
a claim
that tax-shirking was a patriotic gesture in Ottoman Greece, a way to resist
Istanbul’s authority. It is true that an
inability to effectively enforce tax laws has drained the Greek government
of revenue. . .
This is no surprise, actually, since even Greeks
themselves participate in their country’s culture of corruption. The
New York Post reports:
themselves participate in their country’s culture of corruption. The
New York Post reports:
It’s not just
Greek governments that went wrong for decades — it’s also the people who
elected them.
Greek governments that went wrong for decades — it’s also the people who
elected them.
If you keep
voting for politicians who promise far more than the state can afford, the
wheels eventually come off.
voting for politicians who promise far more than the state can afford, the
wheels eventually come off.
That’s how you
wind up with decades of fraud, like that outlined in James Angelos’ “The Full
Catastrophe.” Fraud like hundreds of people on a single island falsely claiming
blindness to collect $400-a-month disability pensions, or tens of thousands of
cases nationwide of dead people “collecting” pension checks that actually
enriched family members.
wind up with decades of fraud, like that outlined in James Angelos’ “The Full
Catastrophe.” Fraud like hundreds of people on a single island falsely claiming
blindness to collect $400-a-month disability pensions, or tens of thousands of
cases nationwide of dead people “collecting” pension checks that actually
enriched family members.
Or like vast
tax evasion — just a few thousand people reporting incomes over $100,000 in a
nation of 11 million.
tax evasion — just a few thousand people reporting incomes over $100,000 in a
nation of 11 million.
Huffington Post strangely ignores these cultural
undercurrents while outlining that Germany (in reality, Prussia) has had more
national defaults than Greece (so far).
undercurrents while outlining that Germany (in reality, Prussia) has had more
national defaults than Greece (so far).