Greece's is facing a massive economic crisis. And of course, most Germans have seen it coming. It’s so obvious, that when it comes to national finances, the “Bankrupt Greeks“ are simply not as disciplined as the Germans. Right?
There is a general assumption that Europe’s future is jeopardized by “the Greeks,“ and the German newspaper Bild did the math, converting the financial aid into truck loads: “In order to get 215.7 billion euros in bills of 100 euros on a truck to Athens, you would have to send off 88 40-ton trucks." All this propaganda against Athens fails to acknowledge one fact: Within the last two centuries, the Germans, or more precisely the Prussians, have pulled off more bankruptcies than the Greeks.
“After comparing the extent of damage to the economic output, Germany is the biggest debt transgressor of the 20th century – if not of the more recent financial history,” said economic historian Albrecht Ritschl as early as 2011. A quick summary:
- In the aftermath of the Napoleonic wars at the beginning of the 19th century, the Prussian treasuries were empty. Creditors were waiting in vain for the redemption of their credits not only in 1807, but also in 1813 and 1850.
- Germany was also virtually broke after World War I and World War II. There were four instances in which the creditors granted massive debt relief: 1924, 1929, 1932 and 1953. Sixty-two years ago, Chancellor Konrad Adenauer’s government negotiated with 20 states, reaching the London Debt Agreement. By the way, Greece took part in these negotiations.
This graph shows an overview of the European countries with the most state bankruptcies:
— Claude Cueni (@ClaudeCueni) June 30, 2015
Throughout its history, Greece has been bankrupt six times -– so it would only catch up with Germany now, if no agreement with the creditors was reached.
In fact, most countries have been bankrupt at least once. Most of the time, war was to blame. “Similar to the failure of companies, insolvency of an entire country is not an everyday occurrence, but still not uncommon,” author John Kallenbach writes. Last year, the United Nations (UN) announced plans to actuate a framework, regulating the handling of national bankruptcy. Different from business law in the private sector, the conversion of debt in national payment defaults aren’t regulated conclusively.
This article originally appeared on HuffPost Germany and was translated into English.