Germany is not just the savior of E.U. but also the bad guy, as least this is what a top-secret research report that originates from Greece says, and also what the entire population of the eurozone, ex-Germany, thinks.
Greek news outlets are reporting that a panel commissioned by Greece’s Finance Ministry has found out that Germany is indebted to Greece to the the tune of more than a 100 billion euros, a amount that Germany owes Greece for World War II reparations.
Before one jumps to any conclusions it should be made clear that the likelihood of any action on this supposed debt is minimal. The consensus sentiment among the top benches of Greek government is that it would be unwise to displease Germany at such a time when it is instrumental to Greece’s rescue plan.
Even if the Greeks pluck up the courage to go against the big guy, Germany will not buy it, after all it is not easy to shell out 162 billion euros. The report says that Germany owes Greece 108 billion for the destroyed infrastructure and 54 billion for loans issued during war time.
The more technical hindrance to this pay-off will be the peace treaty that was signed between the two parties in 1990 which essentially strikes off any possibility of reparations payment.
The debt comprises of several loans that Greece granted to Germany whether forcibly or willingly during WWII and is also a compensation for the damages that the country suffered at the hands of German occupation.
When Greek territory was occupied by Nazi regime in April 1941, the country had to bear the cost of occupation and new settlements which had drastic effect on Greece’s economic infrastructure.
Among the forced debts drawn on Greece’s balance sheet was the 476 million reichsmarks given to Germany by Greek National Bank. With interest this debt is worth more than $95 billion today, if considered normal credit, Germany has to pay it back to Greece without question.
But if categorized as war damage, Greece is not entitled to one dime according to the peace treaty signed by the two countries.
Coincidentally, the same bank which had to over-extend itself to accommodate its occupiers 60 years ago is still in trouble. The proposed merger between National Bank of Greece (NYSE:NBG) and Eurobank Ergasias S.A. (ATH:EUROB) hit a snag when EU regulators halted the process.
The principal concern over the merger is that the product will be a bank too large for Greek economy. A Banking sector is that is larger than the size of the country’s GDP has been a major reason for the running debt crisis in the eurozone. European regulators would clearly not want to create the same problem as part of their solution.
Germany is not loved or appreciated for its funding to bailout programs as much as one may think. Some of the examples include the hung parliament as the result of Italian elections, a Cypriot holding up the slogan “Thanks for Taking My Life Savings Merkel.”
The anti-German sentiment has picked up in Greece in the past months, a country with the highest unemployment rate in EU. If the government chooses to play down this alleged research report, the dissent in the public may accelerate.