Thomas Piketty : “Germany Has Never Repaid.”

ZEIT: So you’re telling us that the German Wirtschaftswunder [“economic miracle”] was based on the same kind of debt relief that we deny Greece today?

Piketty: Exactly. After the war ended in 1945, Germany’s debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece. Instead, both of our states employed the second method with the three components that I mentioned, including debt relief. Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.

→ Medium

A Finance Minister Fit for a Greek Tragedy?

At home, “V Is for Varoufakis” posters hung in the windows of cafes. Greeks showered him with love, twittered over his looks, and wrote adoring satires of his glamorous life and wide-ranging talents. Varoufakis’s oldest friends were bewildered by the international fuss, but everyone I’ve spoken to who knew him before this ministerial turn says Varoufakis’s behavior on the European stage is typical: He’s outspoken, passionate and confident about his ideas. That, apparently, was the problem, because Varoufakis did not go to Europe merely to negotiate Greece’s future. He had bigger ideas. He wanted to show the Europeans how to save Europe itself.

→ The New York Times Magazine

Weekend of Fear in Greece as Monday Brings Salvation or Ruin


Libération, 2 Novembre 2011

Dorothea Lambros stood outside an HSBC branch in central Athens on Friday afternoon, an envelope stuffed with cash in one hand and a 38,000 euro ($43,000) cashier’s check in the other.

She was a few minutes too late to make her deposit at the London-based bank. She was too scared to take her life-savings back to her Greek bank. She worried it wouldn’t survive the weekend.

“I don’t know what happens on Monday,” said Lambros, a 58-year-old government employee.

Nobody does. Every shifting deadline, every last-gasp effort has built up to this: a nation that went to sleep on Friday not knowing what Monday will bring. A deal, or more brinkmanship. Shuttered banks and empty cash machines, or a few more days of euros in their pockets and drachmas in their past — and maybe their future.

→ Bloomberg

Greek Parallel Currency: How to Do it Properly

The TCC avenue would clearly be a superior solution, and would allow Greece to stayin the Eurozone, while stimulating demand by increasing citizens’ purchasing power, reducing domestic labor costs, and significantly increasing GDP. This would also generate, in due course, higher gross tax receipts (which would offset the shortfall in euro fiscal revenue due to TCC issuance).

→ EconoMonitor

The IMF’s Big Greek Mistake

Ultimately, the authorities’ approach merely replaced one problem with another: IMF and official European loans were used to repay private creditors. Thus, despite a belated restructuring in 2012, Greece’s obligations remain unbearable — only now they are owed almost entirely to official creditors.

→ Bruegel