Thomas Piketty: Greek financial crisis is being met with a “shocking ignorance of history”

http://www.vox.com/2015/7/6/8900691/thomas-piketty-greek-financial-crisis

If you need a historic example of a European nation that failed to repay huge debts to neighbors, French economist Thomas Piketty suggests in an interview with Die Zeit that you look to Germany — the enraged creditor to a nearly bankrupt Greece. Without offering specific suggestions about Greece’s current predicament — the country is in a precarious position requiring alternative solutions after rejecting proposed austerity measures — Piketty suggested Greece’s crisis should be approached by creditors with a strong dose of empathy, as “Europe was founded on debt forgiveness and investment in the future.” Here’s a key passage from the interview, which was translated into English by Gavin Schalliol: DIE ZEIT: Should we Germans be happy that even the French government is aligned with the German dogma of austerity? Thomas Piketty: Absolutely not. This is neither a reason for France, nor Germany, and especially not for Europe, to be happy. I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea, all because of their shocking ignorance of history. ZEIT: But we Germans have already reckoned with our own history. Piketty: But not when it comes to repaying debts! Germany’s past, in this respect, should be of great significance to today’s Germans. 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. Related 11 things about the Greek crisis you need to know Piketty told the newspaper he considers Germany’s tone toward European policy matters “a little infantile”: Meanwhile, Germany has become so proud of its success that it dispenses lectures to all other countries. This is a little infantile. Of course, I understand how important the successful reunification was to the personal history of Chancellor Angela Merkel. But now Germany has to rethink things. Otherwise, its position on the debt crisis will be a grave danger to Europe. This isn’t the first time Piketty has publicly disagreed with EU policymakers, and it’s unlikely that his latest criticism will prompt lengthy comment from the German government. After Piketty famously proposed a global tax to address wealth inequality, Germany’s finance minister simply called it “crazy.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s