- (may 2013)
What Germany forgot.
Nazi Germany ended World War II completely destroyed. There was no food,
there were few homes that were still intact, there were few jobs.
To make things worse the government had mortgaged everything.
Not only was there no money: the government had colossal debts to
pay to the rest of the world. The USA, Britain and France, who had fought the
bloody war against the Germans, did something
that today sounds almost impossible: in
1948 the winners of World Way II wrote off 93% of the Nazi-era debt and
postponed collection of new debt for half a century.
Germany's debt load had been 675% in 1939.
Within a few years it went down to 12%, even lower than the national
debts of the winners.
That was the beginning of West Germany's economic boom.
From 1950 to 1960 Germany's GDP grew at an average of 7.9% a year.
West Germany went on to pass both France and Britain in GDP and become
the third economy in the (free) world after the USA and Japan.
Does anybody in Germany believe that Germany would be so wealthy and
powerful today if the winners had not cancelled Germany's debt in 1948?
Then in 1990 the West and the Soviet Union allowed the two Germanies,
West and East, to reunify, a reunification that de facto meant an annexaction
of East Germany by West Germany. The united Germany that emerged was and is
the main economic power of Europe. Inevitably, economic power ended up
translating into political power. As long as the only decisions to be made
by Europe were about admitting Turkey to the European Union or sending troops
to Iraq, Germany kept largely quiet, leaving the old declining imperial powers
of Britain and France to do the talking. But the first major crisis has
changed all of this. The eurocrisis has pitted debtor countries (mainly Greece,
Spain, Portugal) against their creditors (mainly German banks). Suddenly
Germany has shown its political power. The austerity program that has prevailed
in Europe is simply what Germany decided, not what everybody decided.
For example, Germany has decided that Greece must pay its debt, which, in
yesterday's money, is a tiny fraction of what Germany owed the world in 1948.
The world was willing to forgive Germany a huge debt (and six years of war
that had killed 40 million dead people), but today's Germany has not been
willing to forgive a single euro of debt.
There is certainly some irony in the fact that Germany owes its power to
its creditors' decision to cancel its debt in 1948 and is using its power in
2013 to force debtors to pay their debt.
If this were the USA doing the same to some poorer countries, there would
immediately be conspiracy theories of all sorts. After all, it is clearly
a way to interfere into domestic affairs. After all, it is clearly a way
to impoverish neighbors so that they will become satellites (a new form of
the old imperial "divide and conquer" strategy).
Germany also seems to forget that, just like China and Japan, it has been the
net beneficiary of the foreign policy of the USA. These three export powerhouses
owe everything to the "pax americana". Without the order and peace guaranteed
by the fleet of the USA in places like the Middle East, the Indian Ocean and
the Far East, global trade would drop significantly and maybe come to a
standstill, and the main victims would be the export economies of China,
Japan and Germany. Germany invests virtually nothing in that strategically
important endeavour: it is a gift from the USA to Germany (admittedly an odd
legacy of losing World War II: the losers were forbidden to create their own
military might, which meant that the winners found themselves with the
obligation to defend the losers).
Last but not least, Germany is a net beneficiary of the common European
currency, the euro. The euro is not high, as southern Europeans think, but
low: it indirectly helps German exports. If the euro did not exist, the German
mark would be much stronger, and this would hurt German exports. Thanks to the
euro, Germany doesn't need to do anything to keep its currency competitively
low: the weak economies of the eurozone do that for free.
In concluding, German prosperity and power is the result of a number of gifts
that Germany received from its neighbors and even from its past enemies.
There is no question that the German people have proven with hard and smart
work to deserve those gifts (and the whole world admires for that), but every
now and then Germany should remember that those gifts, and not the follies of
its past leaders, have created today's prosperity.
Articles on Germany before 2013