Sehr geehrter Herr Minister,
As a German citizen I am concerned about the line taken with regard to the Greek debt crisis. It gives the impression that Germany can command the EU Commission and the ECB into hard debt collection activities. The cultural damage to the development of a democratic and multi-cultural Europe may be difficult to remedy. Besides this line of action urges the Central Bank to discriminate wilfully between EU Member States in its quantitative easing programme. It appears that the policy adopted rests on mainly one argument: ‘thou shalt pay your debt’.
Germany has emerged from a debtor state. Without relief from its state debt it would have been turned into a potato field as planned by some in America after 1945. The debt cut Germany benefited from has helped both Germans and Americans alike. This is because dead debt destroys the productivity of the debtor, who alone can add value to the outstanding capital of the creditor. This truth will be obvious when Greece has been kicked out from the Euro-Zone and Italy, Spain and France are about to follow. Creditors without debtors will need to work themselves.
The German State is not a true, but a pretended creditor of Greece. In 2009 Greece had no debt with foreign states but € 152 billion in debt with private banks. The present creditor states deliberately overtook this debt burden from their private banks to rescue them and free them from the liability of irresponsible lending. Now they misuse their reputation as a State to claim altogether € 204 billion, while private banks hold € 18 billion only (Corriere de la Sera March 9, 2015). Overtaking the bad debt of their own banks, should include overtaking the legal responsibilities from their irresponsible lending practices.
Germany should be careful with debt enforcement against sovereign states. In 1902 it sank the fleet of Venezuela because of unpaid state debt. The German Supreme Court recently ruled that Argentinian patrimony in Germany can be seized by hedge funds that irresponsibly bought Argentina’s state debt in order to jeopardise the agreement between the main creditors and the Argentinian state. Now the German state bought the Greek state debt. German history, with the occupation of Greece during the second world war, should have created additional respect for the sovereignty of this country today. A Troica of three individuals from financial institutions and the EU, which, in the name of creditor rights overrule democratic legitimacy is not the adequate answer. The crsisis needs a political answer.
The right for discharge is acknowledged worldwide for overindebted consumers. This is because without it, it would amount to peonage. The same should apply for states, as far as budgets necessary to uphold minimum living conditions for the weakest of their population are concerned.
Those who profit should share. Germany has the highest profit from the present financial crisis. It profits from the devaluation of the Euro, stimulating its exportation. With the free trade treaties and the four economic freedoms of the EU, Germany floods other economies with its goods. It has saved its banks from an earned bankruptcy. They now are highly profitable. It has the lowest unemployment rate in Europe. Having most of all financial assets it profits most from the price stability in the Eurozone. It is even able to profit from the high youth unemployment in the Mediterranean states by filling its gap of skilled and young workers.
The new Greek government is the first who consequently names corruption as one of the main sources for the financial situation of Greece. While the previous governments still made the poor pay for this crisis, the new one offers to make the rich, and the tax evaders pay their part. Germany is not innocent in this corruption. Siemens and others are well known for their influence to disrupt democratic states. Bribing Greek officials was not considered a crime in Germany and gave right to tax deductions until quite recently. Thousands of wealthy individuals from Germany bought homes, islands and territory in Greece bribing the local authorities for authorisations and the free provision of infrastructure. Leisure harbours for wealthy foreigners have been financed through EU programmes claiming to be for fishery ports while developers sold villas close by.
Greece is the cradle of our European science and culture. It is a wonderful country in Europe not only for holiday. The amount of money at stake is insignificant with regard to the trillions the Eurozone creditors employ for the rescue of its banks. Nobody asks you to cut off the debt. The correct words in debt management are swaps to provide liquidity, write off to adjust claims to their real value, adapt payments to the existing productivity of the debtor economy and help to punish those who actively created this insolvency through irresponsible lending and investments. The EU should offer Greece at least such relieve as it offered to its own banks.
Udo Reifner, Prof. ord. Trento/Hamburg