Monday, August 03, 2015

Various people harshing on Germany over Greece

Bob Kuttner presumably isn't responsible for the Huffington Post headline, The German Menace 08/02/2015.

But the article does come off to me as making some careless generalizations. E.e., "a newly hegemonic Germany took only one lesson from its economic history -- avoid debt. Forgotten were the lessons of Versailles, the allied generosity, the perverse folly of austerity. The German view of debt became part of the European constitution."

But he is right in saying:

... the EU itself is in jeopardy. The perverse dominance of the austerity mongers in Brussels and Berlin has left Europe entering its seventh year of near-depression, and created a backlash of nationalist rightwing parties all over the continent that rejected the EU. The crushing of a freely elected leftist government [in Greece] shows the sheer brute force of the unholy alliance of Germany and global finance.

The EU was created to expand democracy, boost economic growth, and contain Germany within a democratic whole. Instead, it is destroying democracy, crushing growth, and leaving Germany's most churlish impulses to rule Europe.
In another interview, Yanis Varoufakis gives another take on Merkel's government's priorities (Christos Tsiolkas, Greek Tragedy - yeah, it's a trite title! MONTHLY Aug 2015, accessed 08/03/2015):

But for Varoufakis the ruthlessness of the austerity measures is part of a political game the European Commission is playing in order to frighten other member states.

“This is [German Finance Minister Wolfgang] Schäuble’s way of exacting concessions from France and Italy, that was what the game always was. The game was between Germany, France and Italy, and Greece was – not so much a scapegoat – we have an expression in Greece ...”

We have been conducting the interview in English but on his hesitation I prompt him to speak in Greek. He answers, and though Varoufakis’ tone is that of an educated Athenian and he speaks English with the cosmopolitan accent of someone who has studied in the UK, and worked in Australia and the US, for a moment I hear my father’s voice; for a moment the rural and the urban conflate, the past and the present are one: The jockey strikes the whip for the mule to hear.

Then the urbane voice returns.

“It is a clear strategy for influencing from Paris and from Rome, particularly from Paris, the kind of concessions towards creating a disciplinarian, Teutonic model of the eurozone.” [emphasis in original]
In other words, Varoufakis thinks France and Italy are the "mules" in the analogy that Merkel and Schäuble are trying to threaten. And in speaking of those two countries, he says:

These are important countries, frontline states of Europe, and the way I would characterise it is that their finance ministers neither believed in austerity nor had they practised it seriously. But what they feared was that if they sided with us, if they are seen to be sympathetic to the Greeks, they would encounter the wrath of the Teutonic group and maybe austerity would be imposed on them. They didn't want to be seen supporting us in case they would be forced to suffer the same indignities.”
Economist Jeffrey Sachs also harshes on Germany in Germany, Greece, and the Future of Europe Project Syndicate 07/20/2015. And he's right about this:

Germany’s demands have brought Greece to the point of near-collapse, with potentially disastrous consequences for Greece, Europe, and Germany’s global reputation. This is a time for wisdom, not rigidity. And wisdom is not softness. Maintaining a peaceful and prosperous Europe is Germany’s most vital responsibility; but it is surely its most vital national interest as well.
He also writes about Greece and Germany in Death by Debt - My Response to The German Finance Ministry Süddeutsche Zeitung 07/31/2015; German version Tod durch Schulden.

But Joachim Jahnke argues in Auch Jeffrey Sachs' "Tod durch Schulden" wird der griechischen Krise nicht gerecht Infoportal 02.08.2015 that Sachs' comparisons of Greece to Germany in the past don't hold up so well.

Sachs writes:

It was wrong in the case of Weimar Germany in the 1920s and early 1930s, when Germany was pushed into hyperinflation and then depression. Germans pleaded to the US for long-term financial relief from reparations and debt payments, but didn’t get it in time. First came the hyperinflation; then mass unemployment; then a banking collapse; and then a full run on the German banking system in 1931, leading to a closure of the banks (as in Greece today). President Herbert Hoover eventually granted a debt moratorium but too late: Hitler came to power in January 1933.
Jahnke holds up some important reservations about making an easy analogy out of that situation. He notes, for instance, that Greek unemployment, horrible as it is, hasn't reached the level it did in Germany during the Great Depression: 26% in Greece now, 44% in Germany at the 1932 high point.

Although I was bothered a bit by the following in Jahnke's piece, in which I wondered on the "background" part if he was partially dismissing the named economists as Jewish:

Besonders die Erinnerung an die deutsche Vergangenheit wird bei einigen amerikanischen Professoren mit großem Namen und ähnlichem Hintergrund wie Sachs zur immer größeren Keule gegen die deutsche Politik, wobei sie sich bewußt sind, daß Deutschland mit seiner Vergangenheit besonders verletzlich ist und auch die Mehrheit der Deutschen so am stärksten zu beeindrucken ist.

[Recalling the German past is especially with some American professors with big names and similar background as Sache becomes and bigger and bigger club against the German policy. Because they are aware that Germany is particularly vulnerable on its past and with it can the majority of Germans be impressed most strongly.]
Jahnke isn't defending Germany's Greek policy. On the contrary, he's very critical of it.

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