Update: Due to German copyright restrictions, the translation of the Picketty interview has been removed since the original publication of this post. If you hit the link below, you will find a page of apology, along with a link to the German original (which you can run through Google translate). Fortunately, I've quoted some of the more thought-provoking passages below.
Economist Thomas Piketty has offered a very thought-provoking reaction
to the Greek referendum:
Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted. The first lesson that we can take from the history of government debt is that we are not facing a brand new problem. There have been many ways to repay debts, and not just one, which is what Berlin and Paris would have the Greeks believe.
My book recounts the history of income and wealth, including that of nations. What struck me while I was writing is that Germany is really the single best example of a country that, throughout its history, has never repaid its external debt. Neither after the First nor the Second World War. However, it has frequently made other nations pay up, such as after the Franco-Prussian War of 1870, when it demanded massive reparations from France and indeed received them. The French state suffered for decades under this debt.
Actually, France stunned the world by paying reparations more rapidly than anyone thought possible. But it was still a bitter blow, since Germany was (in my view) the aggressor in that war.
When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: what a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.
Picketty also scores those who speak of Germany's alleged generosity, since the rules insure that German bankers profit from its loans to Greece. The Piketty prescription:
We need a conference on all of Europe’s debts, just like after World War II. A restructuring of all debt, not just in Greece but in several European countries, is inevitable.
The current system is unsustainable. One would like
a new system to be the result of a large, civilized conference -- but history tells us that a violent upheaval usually precedes systemic change.
Hey, here's a thought.
The price of art is an exercise in absurdity, right? So to pay back its $350 billion debt, Greece should sell the Parthenon to Germany for $350 billion. Just declare the land beneath the structure to be German soil. Make the Germans understand that they are now responsible for upkeep and renovation. Present the deal to the Germans as a "Take this (at this price) or take nothing" proposition.