Bloomberg
December 4, 2012
Germany’s Chancellor Angela Merkel has at last opened the door to the possibility of writing off Greek debts, but only several years from now. As they decide on the right thing to do, Germans should take a close look at their own history.
As Merkel indicated in her Dec. 2 interview with Bild, a German tabloid, for the country to trigger the unraveling of the euro area by letting Greece default would damage its own economic and political interests. The economies of trading partners in Europe might collapse, costing Germany far more than the Greek debt forgiveness it refused.
More than this, Germany should recognize that it has a moral obligation to help, just as the U.S. and its allies, including Greece, helped Germany after World War II. This is a largely forgotten history that, if recalled, might counter the false narrative of virtuous Germans and feckless Greeks that has hardened popular opposition to bailouts.
Under the aegis of the U.S., the introduction of the deutsche mark in 1948 wiped out most of Germany’s domestic debt, both public and private, which amounted to roughly four times the country’s 1938 gross domestic product. This move helped Germany to start afresh and begin the economic miracle at which we all still marvel.
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