Greek Economic Situation

A few odd bits that I found during our discussion.

Who works harder? The industrious, prosperous Germans, or the lazy, indebted Greeks.  According to this article in the Economist, the Greeks (at least those with jobs) worked nearly 50% more hours than their German counterparts in 2012. Similar results here, in the Washington Post. Source data here

And this article excerpts a longer interview with Thomas Pikkety in which he points out the hypocrisy of Germany’s insistence that Greece pay its debts.

When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: what a huge joke! Germany is the country that has never repaid its debts.

As we know, Germany solved its post-WWI debt problem by starting World War II. Post-war Germany was burdened with debts of about 200% of GDP. Under the London Debt Agreement of 1953

…the repayable amount was reduced by 50% to about 15 billion marks and stretched out over 30 years, and compared to the fast-growing German economy were of minor impact.[2]

An important term of the agreement was that repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germany’s creditors a powerful incentive to import German goods, assisting reconstruction

Ironically, Greece was among the nations that entered into the agreement forgiving German debts.

Leave a Reply