Lest you forget, Ms. Merkel . . .
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History Shows Why Germany Should Help Greece[/font]
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GERMAN BAILOUT
Germany was granted a waiver on its external debt, including the deferral of interest payments, from 1947 to 1952 as the Marshall Plan was implemented. In 1953, the U.S. also imposed the London Debt Agreement on its wartime allies, which wrote off Germanys external debt.
Albrecht Ritschl, an economic historian at the London School of Economics, estimated earlier this year that the total debt forgiveness West Germany received from 1947 to 1953 was more than 280 percent of the countrys 1950 gross domestic product, compared with the roughly 200 percent of GDP that Greece has been pledged in aid since 2010.
Greece also contributed to the postwar German debt relief. Signatories to the London agreement, including Greece, agreed to defer settlement of war reparations and debts incurred after 1933 until a conference to be held after Germanys reunification. Although Germany paid compensation to individuals in the 1960s, the conference never took place and many Greeks think that more was due.
The bailout of Germany was at least as controversial as the Greek one today. Just like Greece, Germanys tax system in the 1950s was imperfect. Difficulties in changing it had led to revenue shortfalls in the interwar period.
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