On Tuesday 7th April, The Guardian published the following headline: “Greece puts figure of 279bn on claim for German reparations”.[1] This headline no doubt induced a great many exasperated sighs; how ridiculous and vindictive for Greece to bring up a settled debt. Yet this attitude forgets to examine two crucial things that emerge out of this move by Greece. Firstly an outward reflection: why does Germany believe its debt paid, and Greece otherwise? Secondly a more inward reflection: what does our conceptualising of claims to German WWII reparations as illegitimate – and Greek debt as legitimate – say about how we think about debt and austerity? What makes the claim to reparations from Germany seem ridiculous, while the austerity measures Greece faces seem reasonable?
Firstly, let’s discuss the outward reflection. Germany has two key reasons to believe the Greek claims to debt are laughable. First, in 1960 West Germany paid Greece 115 million Deutschmarks, in the face of demands to reparate a 476 million reichsmarks loan that was extracted from the Greek Central Bank during Nazi occupation.[2] Secondly, in 1990, a month after the reunification of Germany, Russia, the US, Britain and France agreed to close the issue of further reparations. This 1990 document is crucial for the German rejection of current Greek reparation claims. However, it is a problematic settlement that sidelines all other countries that may have been owed reparations by Germany for WWII. One of these countries is Greece, who now face austerity measures from an old nemesis, one who they feel still owes them reparations. Greece sees the 1960 repayment as only a partial repayment and it finds the 1990 treaty problematic, for obvious reasons. The issue of German reparations is not so much settled as it is presumed.
Perhaps Greece would be willing to let the old wound of German reparations die, if it was not currently having severe austerity measures inflicted upon it. Greece’s debt totals 240 billion euros, a comparable amount to the reparations they have demanded from Germany. Given the similarity in the amount owed, we should ask what is acceptable about Greek debt, but outrageous about the amount Greece claims Germany owes them. One could argue the Greeks got themselves into this mess, to which a simple rapprochement remains: Germany started WWII. As Paul Krugman explains, such simplistic logic of singularly placing blame is problematic: “It’s true that Greece (or more precisely the center-right government that ruled the nation from 2004-9) voluntarily borrowed vast sums. It’s also true, however, that banks in Germany and elsewhere voluntarily lent Greece all that money. We would ordinarily expect both sides of that misjudgment to pay a price. But the private lenders have been largely bailed out.”[3] Of course, when Germany started WWII, it didn’t borrow money from people expecting it to be paid back. In the case of the Greek debt, there are people whose fates are hinging on Greece repaying its debts.
If this is all that difference critically amounts to (that is, if all that matters is the vested interests of bankers and creditors) we have to ask why the Greek debt cannot be erased, delayed, or minimised. Argentina’s way out of debt in the 1990s was to default, but this option is not open to a Eurozone Greece. In the meantime, the austerity measures Greece has been facing have caused mass amounts suffering as unemployment rises in tandem with public spending cuts. The logic underpinning these austerity measures was best summed up by El Roto, “if the currency can’t be devalued it will have to be the people”.
If we are now blind to the moral and historical stakes, if our reasoning is purely economic, debt becomes a cobweb: holding only the weak, and being little impediment to the strong. It serves to disadvantage the already disadvantaged: it becomes the essence of injustice. Is Greece destined for austerity measures and debt simply because it is not a major Eurozone player? This is the question the Greek demand for reparations raises, and it is one well worth examining if we are to even pretend our notions of justice have any salience.
[3] http://www.nytimes.com/2015/01/30/opinion/paul-krugman-europes-greek-test.html
We acknowledge the Ngunnawal and Ngambri people, who are the Traditional Custodians of the land on which Woroni, Woroni Radio and Woroni TV are created, edited, published, printed and distributed. We pay our respects to Elders past and present. We acknowledge that the name Woroni was taken from the Wadi Wadi Nation without permission, and we are striving to do better for future reconciliation.