Ronald J. Granieri: Hypocritical Germany?

Greek Time Bomb
Geopoliticus: The FPRI Blog

Writing for Geopoliticus: The FPRI Blog, Ronald J. Granieri analyzes "Greek Debt, Austerity, and the Myth of the Hypocritical Hun" (July 6, 2015). Here's a redacted version:

Most Greeks, facing mounting economic chaos and armed with only a vague idea of the specific deal, apparently welcomed the chance [in the referendum] to denounce austerity without jeopardizing Greece's place in Europe, and believe they can retain the Euro[, but s]uch assumptions are, to put it mildly, optimistic, though the resignation of Varoufakis this morning indicates that Tsipras still hopes to restart negotiations . . . . [Many SNS sites] over the weekend were flooded with images of Greek and other European states signing the 1953 London Agreement, which greatly reduced the debt burden on West Germany, and is correctly considered a key moment in the postwar German "Economic Miracle." Some journalists on the pro-SYRIZA Left have gone so far as to accuse the Germans of hypocrisy in refusing to give Greece the same consideration . . . . Such assertions fit into a popular narrative that combines two popular villains (bankers and Germans) . . . . [I]n 1953 West Germany and its creditors reached an agreement that greatly reduced the debt burden on Germans . . . . West Germany in 1953 was indeed treated differently than Greece in 2011-2015[, but] that agreement only came after the government of Konrad Adenauer demonstrated its willingness to submit both West German heavy industry (in the European Coal and Steel Community) and its military (in the ill-fated European Defense Community) to supranational European authority. West Germany also behaved differently than Greece - demonstrating a willingness to make compromises for Europe, and also enduring a period of austerity and slow wage growth, in order to help create the political atmosphere that made the 1953 debt agreement possible . . . . The 1953 deal was not automatic . . . . The simple image of hypocritical Germans rests on a misreading of the historical facts . . . . The 1953 analogy has much to teach us, but not in the ways that it is currently being used. A clearer historical perspective should help us see that things could have turned out rather differently in the 1950s, but turned out the way they did as a result of conscious choices made by leaders in Europe and the United States. Adenauer pursued his vision of German Westbindung with ruthless consistency, and found partners in French colleagues such as Robert Schuman and Jean Monnet, Italians such as Alcide De Gasperi, and Belgians such as Paul-Henri Spaak, with whom he shared a vision for European integration that helped overcome national suspicions . . . . Any hope that we may have of a sensible resolution to the current crisis will require much wiser and more creative leadership than we have seen thus far.

In short, Germany didn't receive a debt agreement in 1953 without accepting demands from other European states, something Greece has been finding hard to do.

We'll soon see the consequences of the Greek's application of game theory . . .