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Greek accusations that Merkel is behaving like a Nazi are unjust: it might, though, be a good Lenten exercise for Germany to embark on a penitential self-examination

This massive “bail-out” is intended to save the eurozone, not the Greeks

By on Wednesday, 22 February 2012

Germany’s role in imposing what many think are punitive conditions on Greece for the latest supposed “bailout” of the Greek economy has led to huge anger against Germany on the streets of Athens and—to the bewilderment of the Germans—comparisons with the behaviour of the Nazis, who occupied Greece in 1941 (causing the deaths of over 300,000 civilians from starvation in Athens alone, and tens of thousands more through Nazi reprisals, and leaving country’s economy in ruins). It hardly needs to be said that these accusations are grossly unjust. Have a look at this:

Greeks brand Germans ‘Nazis’ for driving through painful cuts and ‘taking control of their economy’

• Protesters burn German flags and depict Merkel in Nazi uniform
• Anger at Germans who ‘keep changing rules for bailout money’

Greek anger with the way they believe Germany has taken over their economy is boiling over on the country’s streets.

In recent days, protesters have burned German flags and defaced the Bank of Greece’s headquarters to make it look like the Bank of Berlin.

German chancellor Angela Merkel has also been depicted in Nazi uniform on the front page of right-wing newspaper Democracy above a headline alluding to Auschwitz.

The backlash has been provoked by Germany’s role in driving through painful measures to stop Greece’s debt crisis from spiralling even further out of control.

Of course, it’s all nonsense. The Germans really don’t want to take control of Greece or of anything else. In a way, that’s the trouble: the Germans are so sensitive about their past that they have in the past shrunk away from exercising a leadership role even when it would have been appropriate. So they are shocked by these accusations, and at the anger against them for (so far as they are concerned) saving the Greeks from the result of their own irresponsibility.

The Germans, however, have brought this Greek anger on themselves: for, the fact is that the Greeks are right to think that there is absolutely nothing in this latest “bail-out” that will do anything but lead them deeper into debt and make their own economic recovery even more unlikely than it is already. This is where a little German self-examination would be appropriate: for what they are really doing now is not saving Greece at all: it is saving the eurozone banks who so foolishly lent the Greeks such huge sums of money when they adopted the euro as their currency, without any thought of how they were ever to repay it. The eurozone is directly responsible for the plight of the Greeks, by letting them in in the first place.

The vast sums of money it is now handing over will leave Greece almost immediately: the Greeks will get no benefit from any of it. Greece will have to repay it: but the purpose of the loan, I repeat, is to save not the Greeks but the eurozone and its banks.

An individual who is so heavily indebted that he can never repay his debts has two paths open to him: if he is foolish, he will get even deeper into debt (the path now being imposed on the Greeks); if he is sensible, he will declare his bankruptcy. This will lead to a period of hardship: but it will at least allow a fresh start, and he will be able to rebuild his life. Giving Greece another “bail-out” is like giving a man heavily in debt yet another credit card.

I have seen only one analysis of the situation of Greece and of the treatment now being meted out to her (and the real motives behind it) which looks at all near to what seems, to me, to be the reality; it was written by Matthew Parris, and it appeared in the Times newspaper on Saturday. Since the Times isn’t online except to subscribers, I can’t give a link, so will quote at some length:

The mass of the Greek people are the victims … We British would also take early retirement on inflated pensions if this were offered to us by corrupt political parties whose venality Brussels had for years underwritten, and to which the EU had always turned a blind eye.

It follows that any concerted, German-led European action that starts to look like a project for beating up and humiliating an entire people will take the flavour of injustice, monstrous injustice.

Since the fall of the Berlin Wall few nations have been trashed with anything like this violence. All week the news has been full of reports and images of deprivation and despair. I will not repeat statistics that are now common currency: the numbers demonstrate the sheer speed and depth of Greece’s descent into bankruptcy and the national shock this is causing. It is far worse than anything outside war that has happened to us British over the last century.

Our own democracy would be in danger today if we were being asked to take half the pain now being inflicted on Greece. I can already hear the German answer. “We are doing nothing,” Berlin would say, “to hurt the Greek people. On the contrary we and the rest of the eurozone are offering to rescue them from problems of their own making. We are being asked to part with a great deal of money. We are simply making conditions.”

Three things are wrong with this argument. First, it suppresses the most important consideration behind northern European policy towards Greece. The policy is not primarily philanthropic, but designed to shore up a common currency and European banking system from which the stronger European economies derive great advantage.

Second, if, without demur, the richer members of a partnership connive over many years in the descent of a junior partner to a dependence on subsidy that resembles drug-addiction, there arises a responsibility, including a moral responsibility, to help the patient out of his addiction in a way that is gradual enough not to kill him. There is only one word for what Berlin and Brussels are doing, and that is “brutal”.

What then should now happen? Heaven knows, I’m no economist. But so what? Professor Dawkins says that you shouldn’t believe anything that can’t be proved: well, that may not be true of religious belief, but it certainly seems to apply to much, if not most, economic theory. And since economists are just as confused about all this as anyone else, why shouldn’t a non-economist suggest his own solution, based merely on what seems to him common sense?

What Greece needs, it seems to me – among much else, including a clean-up of political corruption – is an orderly default on her debts, followed by some kind of Marshall plan (at least we know that worked). As for the eurozone (which the Greeks should leave immediately) that should be shored up by handing over the “bail-out” money just agreed in Brussels not to Greece but direct to the bankers whose loans are now due to be repaid, in order to protect them from collapse: but, as with the Royal Bank of Scotland, that should involve a partial transfer of ownership pending an eventual repayment of these huge sums, not by Greece but by the banks who foolishly lent them so much money.

Meanwhile, the Germans should have a good hard look at their own behaviour. As Matthew Parris puts it: “Do the rest of us not feel a shudder of distaste at the insistence that Greece’s elected politicians sign personal declarations about what manifestos they will, or will not, offer their own electorate in their own general election? …. how tin-eared do you have to be to miss the note it will strike among a population some of whom are actually running out of food?” Parris is right: this is not cautious and sensible, as the Germans appear to think it is: it is simply brutal. Greek democracy is presently in a delicate, not to say positively unstable condition: do the Germans really want positively, once more, actually to destroy it?

  • Anonymous

    I’m not particularly economically aware (despite a few modules at uni) but the equation faced by Greece and many other countries would seem to be fairly simple: you have spent more money than you have for too long and you are horrifically in debt, so YOU. NEED. TO. START. SPENDING. LESS.

    Protesting in front of the embassy of the country trying to help you just because they dare to suggest that maybe continuing to spend way above your means isn’t such a cleaver idea just seems infantile!

  • theroadmaster

    It seems that the international financial bond market is the Golden Calf of the secular world which needs to be appeased, to sate it’s anger at the pecuniary wastefulness and debt-ridden state of  certain national economies within the eurozone.  Do we really need to see the ritualized humiliation of the proud Greek nation by the IMF in order for financial rectitude to be established within the socio-economic sphere of the country?  William makes a salient point regarding the insensitive and inflexible attitude of the German chancellor towards the plight of the Hellenic people who are being crushed by swingeing cuts and taxation to the point where rebellion is in the air.  Surely this exposes the inhumanity inherent in an economic ideology serviced by technocrats and bankers which reduces men and women to a dehumanizing utilitarianism bereft of any moral core.

  • Edmund Burke

    If the USA and Britain adopted the same attitude towards Germany as Germany is adopting towards Greece, Germany would still be a shattered ruin. Indeed, the western powers had learned the lesson of the 1920s and the devastating impact of harsh and humiliating reparations. Blessed are the merciful, Germany should remember, particularly in dealing with one of those many countries to suffer gravely, materially as well as in loss of life, at Germany’s hands and within living memory.

  • Edmund Burke

    I should have prefaced my comment with “If, in 1945, the USA and Britain…

  • Anonymous

    Why are you confusing monetarist economics thinking with secularism? 
    And why are you then adding to this utilitarianism?
    There’s little basis for connecting them like this really.

    Granted we all have things we do not like, clearly for you – secularism, monetarist economic thinking and utilitarianism are all thinks you disagree with. However to lump them all together as one entity doesn’t make sense.

    For example more left-wing governments are more likely to increase spending, be more utilitarian thinkers (as a proportion) and disagree with monetarist economic thinking.

    Whereas right-wing governments are more likely to act like Germany in terms of economic policy – by cutting and following monetarist economic policies. 

  • Anonymous

    Economics does not work like balancing a household budget or credit card as the often dragged up analogy goes.

    Its very different because unlike in a normal family budget – the income, and the expenditure vary greatly from year to year.

    Your actions in spending also have effects on your expenditure. For example if you spend creating jobs in something useful – such as infrastructure building. You may get a lot of the money back – and in the long run likely more.

    Firstly you save on welfare if those you employ were previously unemployed. Then you take back some money in taxes that they pay. Then you take a huge chunk back from VAT and sales taxes, and from the taxes paid of those who your employee spends his money at – such as Tesco etc etc.

    Then once your infrastructure project is complete, the economy improves because of it also. Better roads and trains help business to work better.

    I know Greece is a special case definitely. But cutting does not always leave you richer as you might imagine. Britain’s debts have increased substantially under the cuts in fact.

    This is due to higher welfare bills due to higher unemployment, and because of lack of growth -and therefore tax revenue. Spending can boost growth and reduce welfare through increased employment.

    Spending your way out of recession has become a term of irony now it seems. But most interpretations of history credit President Woodrow Wilson’s spending after the stock market crash in 1928, as saving the economy. 

    Of course counter arguments can be found for debt and over-spending I’m sure. But it is not as clear-cut as popular opinion appears to think it is today. Just saying.

  • http://pulse.yahoo.com/_HDV4GI6CHKTCVEXRQENW7DA2LI da

    There’s been a lot of racial invective of Greeks as untermenschen coming from German political readers, all couched in the religious language of chaste Protestants and profligate southerners. If you don’t think people are hearing echoes from the 1930s, you’re not listening closely enough.

  • theroadmaster

    If you think about logically what I’m saying you will realize that Institutes like the IMF(International Monetary Fund) and the ECC(European Central Bank) regard the Financial Market in the same matter as the ancient Israelis worshiped the Golden Calf idol during their exile in the desert fleeing Egyptian captivity.  In other words, the Market had taken on the appearance of a false idol, but this time the context is worldly as opposed to the Religious sphere.  
    Perhaps I should have explained more clearly my use of the term “utilitarian” in the manner in which I used it.  I mean’t that people are being viewed as useful only in the sense of being utilized  like human sacrifices, to pay for the excesses of bankers who originally tipped the economies of many countries over the precipice in the first place.  The resultant savage budgetary cuts, wage cuts and redundancies have caused untold human misery in nations right across the eurozone.  Monetarism in that case knows the price of everything but the value of nothing.  Any ideology which has a limited, materialist view of humanity, needs to incorporate more humane elements within it’s belief system  to make it more appealing, as opposed to calculating short termism as it’s objective.  I think that a more realistic approach would be to set budgetary goals, which allow for a longer time-frame in terms of socio-economic readjustments and repayments, for countries that are being strangulated by debt.

    I never meant’s to suggest that monetarism, secularism and utilitarianism have obvious links which make them directly related to each-other.  Rather, I wanted to emphasize how some ideologies and contexts(while sometimes not normally associated with each-other) can interact to produce certain outcomes, which can be negative as in the cases that I describe as well as good. 

  • Tridentinus

    The Euro is vitally important to Germany. If each European country had its own currency, was able to devalue it and set its own interest rates, then the value of the southern European nations’ currencies and Ireland’s would plummet making their exports much cheaper, particulary tourism which is possibly the main industry of Greece and maybe Portugal, too. However the more industrial northern nations would find their currencies rising making their exports dearer and less competitive. Germany would be the main loser in all this and as Matthew Paris’s view that the Germans are not being philanthropic but acting out of pure self interest. Sarkhozy is a non-entity, his priority is to hang on to power. My advice to the Greeks is, “Beware of Germans bearing gifts.”