Highly
indebted, without access to capital, viewed suspiciously by creditors - that
was Germany in 1953. Half the country's debts were canceled 60 years ago this
week - the foundation of the "economic miracle."
Many Germans
are still proud of the so-called "economic miracle." Post-war growth
was extraordinary - the new Federal Republic's economic output doubled between
1953 and 1963 alone. Generations of schoolchildren have since be taught that
the Germans are simply unbelievably hardworking people who were supported by US
money after the war.
"That
is a very regrettable part of the suppression of history in this country,"
says Joachim Kaiser of erlassjahr.de, an alliance that campaigns for the
cancellation of debts in the developing world. He believes that the Germans
have forgotten that they were hopelessly in debt after World War II, not unlike
Greece today.
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| The parallels with Greece today are hard to overlook |
30 billion
Deutschmarks
In those
dark days, Germany owed money to around 70 countries, with the debts partly
dating from before the war, partly from the short period afterwards.
Altogether, the debts were worth around 30 billion Deutschmarks. Budget cuts
and laborious repayments were not an option for the West Germans - on the
contrary - the economy desperately needed more cash to finance the country's
reconstruction and growth.
That much
was clear to the banker Hermann-Josef Abs, who led the German delegation in
London in 1953 - his mission: to make the creditors of today into the financers
and investors of tomorrow.
The
negotiations, which began in the summer of 1952, were tortuous. Would the
creditors write off their money? Could the Germans be trusted? "There was
even a moment when the negotiations almost broke down," says
Rombeck-Jaschinski. "The Germans had made the foreign creditors an offer
that, from the point of view of the finance ministry, was the most that was
possible. The creditors basically considered the offer an insult."
The suspicion
of the creditors
The Germans
were forced to alter their offer in order for talks to continue. The parallels
with current negotiations between Greece and its creditors are obvious. Just
like during that year in London, the key is finding the right balance. In 1953,
the creditors wanted to get as much of their money back as possible, while at
the same time Germany was not to be economically overburdened.
"The
Britons above all took the view that the Germans could essentially pay
everything back," says Rombeck-Jaschinski. "But the Americans blocked
them, because they had an interest in making sure that Germany had money left
over for other things, especially rearmament."
 |
| Merkel wants to force budget cuts on Greece |
Birth of an
export nation
On top of
that, the agreement laid the foundation for Germany's export strength, as the
country could only service its debts as long as it earned money through foreign
trade. That, as Kaiser points out, meant creditors had an incentive to buy
German products. In his opinion, a similar agreement today would help highly
indebted Greece - particularly as the country spent billions on German tanks
shortly before the debt crisis began.
"If we
said: the Germans will only get their money if they agreed to a Greek trade
balance surplus - then the Greeks could export for a long time and bring in
German tourists, until they had finally paid for these damned tanks," says
Kaiser.
Rombeck-Jaschinski
says the situation 60 years ago cannot be transferred to today's problems so
easily, but she does think the Germans shouldn't forget that their own country
was once hopelessly indebted and dependent on foreign help.
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