Albrecht Ritschl: "If Germany paid war compensations, it would go bankrupt immediately”

19/10/2011 - 09:00

Interview with Isaac Karipidis

Arriving on the fourth floor in one of the buildings of the London School of Economics ...
It is not difficult to find the office of the German professor of economic history, Albrecht Ritschl. Above the door is stuck a card depicting a Piggy-Piggy to swim in the sea, holding in the mouth the Greek flag. Entering the office, the first thing you face is a photocopy of a 200 drachma bill of Rigas Feraios.
Professor Ritsl became known, as he admits, not very popular in his country, because he, through his articles in the British press and through the interviews in German magazines, has essentially argued that the attitude of Germany towards the financial problem in Greece is unacceptable, a position which he expressed even in the magazine Spiegel, which is not ... famous for philhellenic approaches. Indeed, in an interview in the magazine this summer said that if Greece, along with other countries' claims the compensations (note: the Second World War) and Germany is forced to pay, then they’d even get our ... shirts ".According to the professor, the German postwar "miracle" is due to a large extent on the fact that Greece has never claimed reparations from Germany, as others did. "That Germany should not forget," as he said in "Hot".
Professor Ritsl was born in Munich in 1959. He has taught at many different universities in Europe. From Barcelona and Zurich to Berlin. In recent years Professor of Economic History at one of the most popular universities in the financial world, the London School of Economics.

Sir, do you really have anything to do with Greece?
No, no.
How do you explain such a strong Greek presence in your office?
(Laughter.) I have some basic knowledge of Economic History of the 20th century thanks to my profession. Eventually, in an interview they asked me how bad things were in early 1900 - a time which is anyway not far from ours. I asked, then, give a comparison of the problem of Greece with the conditions then prevailing, and thus began my contact with your country.

Your relationship, then, with Greece was inaugurated when the problems started in our country?
(Laughter.) Yes, so it is. It is a coincidence. Unless, of course, the deep relationship that we all have with Greece, which is over 2,000 years. European culture, European course would be completely different without the positive contribution of the Greek spirit. But that's another story ...
Speaking strictly for my relationship with your country, I would say it started because of financial problems and mainly because of how the rest of Europe dealt with them and especially Germany.

Really, how did Germany dealt with them? How do you see the attitude of Germany towards Greece?
I must say that now, these recent weeks, the attitude of Germany has changed. It is not so intransigent and so cumbersome as  It was before.
Today there are two major trends within the country, which collide, even among themselves. One argues that there should be no default in the eurozone. Debts must be paid to the last cent not to expose Europe to international markets. The other "school", the other trend, if you will, which recently gained ground, says it should be restructured debt. According to proponents of this view, there is nowhere in the EU a rule, which impose the full financial support of a country on the verge of bankruptcy. And historically, indeed, this is the way in which the debt of a country goes.

You, as professor of economics, which solution do you favor?
Sir  Karipidis, I must say-and I know that this will not appeal to your readers, it is almost impossible for Greece to pay its debt. The debt of Greece in relation to production is much greater. So the restructuring is almost imperative. I am able also to tell you that within the German government, no longer speak for a large proportion of the debt restructuring of Greece. It is no secret anymore. Moreover, politically speaking, I would say that Greece has never been ready to enter the euro. Before you enter the Eurozone in a system such as the eurozone, you have to develop a strong, modern tax environment. I think the Greek government was not ready to face the difficulties of such a mechanism. This, indeed, we are seeing and experiencing now. Nevertheless, I must say that there is no reason to look back but to see how we deal with the situation together. All countries to cooperate for the common good of the eurozone. To see how we get out from this path, without creating more damage to the global economy.

Often, however, Germany, at least in our eyes, does not seem so minded as you say ...
There you are wrong, sir Karipidis ... The German government several times in the recent past have not acted with the required efficiency. Also, if you look a little old in the history of Germany, we see that this too has its own huge mistakes - not only politically but also economically.

What do you mean?
After the Second World War, Germany left behind a Europe essentially damaged. Furthermore, because of frivolous options, the same over the past century,  has gone bankrupt three times. If it were not for the U.S., which helped financially after the war, and countries such as Greece, which never claimed war damages, now my country would not have the economic power it has. I've said it before and am not afraid to repeat to you, Karipidis: Germany is the biggest sinner in the 20th century and perhaps of modern economic history. My compatriots seem to have selective memory on this issue. If you interpret it psychologically, it's because we always tend to remember only the good side of ourselves. (Laughter.) Nevertheless, it is right to remind my countrymen of historical events, which anyway remain vivid in the minds of people living in other European countries.
You know, for these positions I'm not very popular in my country ... Of course, I must say, as an economist and researcher, and that your country has a large responsibility for the current situation. As people, you spend much more than you produce and your life is not justified by your income.

Really, could Greece today claim reparations from Germany?
Allow me to tell you that this is a purely legal question, to which I will not take place. I know that it has launched a debate among legal circles in Europe -even informally-but I can not have a scientific perspective. I am not a lawyer. This, however, you will say with certainty is that the real issue is not whether Germany owes war reparations to Greece, but that we should all deal with this difficult situation. The point is that Germany must understand that it has its own share of responsibility and must leave the arrogant rhetoric. It should go into more effective and efficient approach to the problem. Germany must not forget that two generations ago was able to stand on its feet thanks to the generous attitude of Western powers, including Greece. It should be stopped, then, to see the solution only with numbers and see it with a more effective and wider political view.

I will not disagree with you on the necessity of immediate treatment of the problem should’ t we, however, look at the agreements signed in the past and have not been met? I refer to the Agreement on German debt was signed in London in 1953.According to this, if a reunification of the two Germanies took place, Germany would have to pay war reparations. Germany was unified in 1990, but compensation is not given ...
It is not such a simple issue ... The agreement says that Germany will pay its debts when it will be reunited and the new state created will be the "legal" successor of the German Empire. Like, say, before the war. It is still not clear whether Germany that emerged after 1990 is the "legal" successor of the German Empire. If it is proven, then the debts of the German Empire are passed in the state of Germany and countries like Greece can claim compensation from either the German courts or even by European courts. The issue is still open. Of course, Germany's view is that the united Germany is not the "legal" successor of the German Empire, and therefore not liable for any damages. I must say, however, that if Germany eventually asked to pay all such damages, not only to Greece but also in the world, then it will go bankrupt immediately. Because the amount that will be charged, will be much higher than the amount that Germany can afford.

Before closing, I would like to ask you what do you think should be done to Greece to come out from this difficult situation.
Look, things are very serious. To be perfectly honest, what is done should be done with great care not to have bad consequences. You should at all costs to avoid riots and strike a final and lasting solution in the least possible impact on the Greeks. The one issue this debt. Personally, I think much of it should be deleted. I am not able to tell you how much, but surely the number is large. The other major issue is that Greece from now on should begin to live with its own resources and not by loans and grants from other countries or the EU. One thing is certain: The years during which Greece was living with borrowed money are gone. From now on, your country faces a painful period to adjust to new, arguably more realistic, and unfortunately, my assessment is that this period will last many years ...

Although you do not sound particularly optimistic, I can only thank you, sir Ritsl for the discussion we had!
Thank you, sir Karipidis, and do not forget that Germany after the war was much worse than what is Greece today!
 
Published in the journal Epikaira: 14/10/2011