|German Unification Day at Berlin's Brandenburg Gate, October 03, 1990.
Germany is king when it comes to debt and calculated based on the
amount of losses compared to economic performance, Germany was the biggest debt
transgressor of the 20th century, according to German economic historian,
Der Spiegel magazine that Germany was the worst debtor nation of the past
century. He warns the country should take a more chaste approach in the euro
crisis or it could face renewed demands for World War II reparations.
He said Germany was responsible for what were the
biggest national bankruptcies in recent history. It is only thanks to the United
States, which sacrificed vast amounts of money after both World War I and World
War II, that Germany is financially stable today and holds the status of
Europe's headmaster. "That fact, unfortunately, often seems to be forgotten,"
From 1924 to 1929, the Weimar Republic lived on credit and even borrowed the
money it needed for its World War I reparations payments from America.
With only a few exceptions, all reparation demands after World War II were put
on the backburner until Germany's future reunification. For Germany, that was a
life-saving gesture, and it was the actual financial basis of the
Wirtschaftswunder, or economic miracle (that began in the 1950s). But it
also meant that the victims of the German occupation in Europe also had to forgo
reparations, including the Greeks.
After the first default during the 1930s, the US gave Germany a "haircut"
in 1953, reducing its debt problem to practically nothing.
Ritschl said that measured in each case against the economic performance of the
USA, the German debt default in the 1930s alone was as significant as the costs
of the 2008 financial crisis. Compared to that default, today's Greek payment
problems are actually insignificant.
The historian said that in 1990, then-Chancellor
Helmut Kohl refused to implement changes to the London Agreement on German
External Debts of 1953.
Under the terms of the agreement, in the event of
a reunification, the issue of German reparations payments from World War II
would be newly regulated. The only demand made was that a small remaining sum be
paid, "but we're talking about minimal sums here."
"With the exception of compensation paid
out to forced laborers, Germany did not pay any reparations after 1990 -- and
neither did it pay off the loans and occupation costs it pressed out of the
countries it had occupied during World War II. Not to the Greeks, either,"
As the saying goes, eaten bread is soon