Post originally appeared on Zerohedge.
Yesterday we reported that in what may have been an attempt to stun the world, if not so much Germany, with the law of large numbers, Greece calculated that Germany owes it a whopping €278 billion in World War II reparations, or about a third of what Germany reported was its GDP in the fourth quarter. Unfortunately for Greece, Germany does not appear to be rushing to wire the funds. As Reuters reported earlier today, Germany’s economy minister had one word for the Greek demand:“stupid.”
Sigmar Gabriel, who is economy minister and German vice chancellor, called the demand “stupid”, saying Greece ultimately had an interest in squeezing a bit of leeway out of its euro zone partners to help Athens overcome its debt crisis.
“And this leeway has absolutely nothing to do with World War Two or reparation payments,” said Gabriel, who leads the Social Democrats (SPD), junior partner in the ruling coalition with Chancellor Angela Merkel’s conservatives.
Berlin is keen to draw a line under the reparations issue and officials have previously argued that Germany has honored its obligations, including a 115-million deutsche mark payment made to Greece in 1960. A spokeswoman for the finance ministry said on Tuesday that the government’s position was unchanged.
Other Germans were likewise unimpressed:
Eckhardt Rehberg, a budget expert for the conservatives, accused Athens of deliberately mixing the debt crisis and reform requirements imposed by Greece’s international creditors with the issue of reparations and compensation.
“For me the figure of 278.7 billion euros of supposed war debts is neither comprehensible nor sound,” he told Reuters. “The issue of reparations has, for us, been dealt with both from a political and a legal perspective.”
It may not be sound but from the standpoint of the Greeks it is completely comprehensible: with their back against the wall, and with sovereign and financial bankruptcy breathing down the Greeks’ neck, the country may as well go for the Hail Mary pass: who knows it just may find enough supportive voices in Germany to reach the endzone.
And, to our surprise, not one but two political parties in Germany are willing to help Greece out with this particular desperation “pass” because members of both the Greens and the far-left Linke party have said that Berlin should cough up some of the €10.3 billion in wartime loan repayment.
Both Manuel Sarrazin, a European policy expert for the Greens, and Annette Groth, a member of the leftist Linke party and chairman of a German-Greek parliamentary group, told Reuters that Berlin should repay a so-called occupation loan that Nazi Germany forced the Bank of Greece to make in 1942.
Berlin and Athens should “jointly and amicably” take any other claims to the International Court of Justice, Sarrazin said.
Groth went further, saying: “If you look at Greece’s debt and the European Central Bank’s bond purchases every month, it puts the figure of 278.7 billion euros into perspective.”
She said the German government should, at the very least, talk to Athens about how it came up with that figure.
“The German government’s categorical ‘Nein‘ certainly cannot be allowed to stand. That’s disgraceful 70 years after the end of the war,” Groth said.
It can’t but it will, because with Frau Merkel it is all about keeping stern appearances. However, just in case Greece needed encouragement to continue the pursuit of this ultimately futile line of attack, the two German opposition parties have certainly provided it. Then again, the final outcome, one that depends entirely on Angela Merkel’s decision, is clear. And sadly it now looks like Greece will spend even more time pursuing this lost cause with a final outcome that – at least for Greece – does not look good, than focusing what little energy and focus it has left on what it shoudl have been doing over the past 5 years – reforming.
Finally, let’s not forget that this is Europe, where a little under a century ago, it was again the issue of German reparations thrust upon a far weaker Germany, that led to not only the rise of German hyperinflation and the rise of Adolf Hilter, but maybe even more importantly, led to the creation of that all important entity, the one which is the true committee that runs the world, the Bank of International Settlements, in whose Tower of Basel, every two months, unelected academics sit down and decided the fate of the world.
One can’t possibly imagine what outcomes the question of German war reparations will lead to on this particular occasion.