More on the Greeks Germans

Eduardo Porter, business columnist at the NY Times, is only the latest to point out the forgotten half of the German-Greek crisis.  Germany is insisting that Greek pay-up or get out, forgetting that the world was far kinder to the Germans on at least two occasions  in the last hundred years.

Major debt overhangs are only solved after deep write-downs of the debt’s face value. The longer it takes for the debt to be cut, the bigger the necessary write-down will turn out to be.

Nobody should understand this better than the Germans. It’s not just that they benefited from the deal in 1953, which underpinned Germany’s postwar economic miracle. Twenty years earlier, Germany defaulted on its debts from World War I, after undergoing a bout of hyperinflation and economic depression that helped usher Hitler to power.