Greece's Economic Crisis - Another Perspective

Germany Should Pay its Long-overdue Obligations to Greece

In October 1940, Greece was dragged into the Second World War by the invasion of its territory by Mussolini. To save Mussolini from a humiliating defeat, Hitler invaded Greece in April 1941.

Greece was looted and devastated by the Germans as no other country under their occupation. The International Red Cross has estimated that between 1941 and 1943 at least 300,000 Greeks died from starvation – the direct result of the plundering of Greece by the Germans. Mussolini complained to his minister of foreign affairs Count Ciano “The Germans have taken from the Greeks even their shoelaces”.

Germany and Italy, in addition to charging Greece exorbitant sums as occupation expenses, obtained forcibly from Greece a loan (occupation loan) of $ 3.5 billion. Hitler himself had recognized the legal character of this loan and had given orders to start the process of its repayment. After the end of the war, at the Paris Conference of 1946 Greece was awarded $ 7.1 billion, out of $ 14.0 billion requested, for war reparations.

Italy repaid to Greece its share of the occupation loan, Italy and Bulgaria paid war reparations to Greece, and Germany paid war reparations to Poland in 1956 and to former Yugoslavia in 1971. Greece demanded from Germany payment of the occupation loan in 1945, 1946, 1947, 1964, 1965, 1966, 1974, 1987, and in 1995. However, Germany is consistently refusing to pay its obligations to Greece arising from the occupation loan and war reparations. In 1964, German chancellor Erhard pledged repayment of the loan after the reunification of Germany, which occurred in 1990.

Indicative of the current value of the German obligations to Greece are the following: using as interest rate the average interest rate of U.S. Treasury Bonds since 1944, which is about 6%, it is estimated that the current value of the occupation loan is $163.8 billion and that of the war reparations is $332 billion. The French economist and consultant to the French government Jacques Delpla stated on July 2, 2011, that Germany owes to Greece 575 billion euros from Second World War obligations (Les Echos, Saturday, July 2, 2011). The German economic historian Dr. Albrecht Ritschl warned Germany to take a more chaste approach in the euro crisis of 2008-2011, as it could face renewed and justified demands for WWII reparations (Der Spiegel, June 21, 2011, guardian.co.uk, June 21, 2011).

The Germans did not just take “even their shoelaces” from the Greeks. During WWII Greece lost 13% of its population, some of it in battle, but mostly from the famine and from German war crimes. The Germans, murdered the population of 89 Greek villages and towns, burned to the ground over 1,700 villages and many of their inhabitants were also executed, they reduced the country to rubble, and looted its archeological treasures.

From: www.greece.org

This is how both war and peace work in the capitalist system.