The Complexities of Ingratitude

At the end of the Napoleonic wars, a foreign diplomat remarked to the Austrian foreign minister that Austria should be grateful for the efforts of other nations to free Austria from Napoleon. The response was, “The world will be astounded at the magnitude of Austria’s ingratitude.” We hear echoes of that in the current jaw-clinched impasse between Germany and Greece over German insistence that Greece maintain a severe austerity regimen despite 27% unemployment or have its loans revoked by German controlled banks. For Germans seem to have forgotten completely the days following WWII and the Marshall Plan.

It’s easy to do: you have to be over 65 to have been there when it was all happening.  Angela Merkel would have been just a baby. But back then was when Germany was reeling with the agonies of recovery from WWII, and those who had just defeated her not only forgave half her foreign debt, they specified repayment of the remainder only as a portion of proceeds from Germany’s exports, then proceeded through the Marshall Plan to rebuild German infrastructure and stimulate the German economy with cheap imports to gain the health it enjoys today. And Greece, just devastated itself by Germany, was one of the 20 nations who joined in doing so. Talk about magnitudes of ingratitude.

Harold Meyerson of the Washington Post wrote today of those wild and wooly times, an instructive reminder of how Germany itself, and all of post-war Europe, was saved by the opposite of austerity. He doesn’t mention, though, an equally instructive part of that tale that the Germans back then would not have been necessarily aware of. For in the U.S. itself, leading the charge to restore the German people and the German economy generated a boom which, added to the post-war baby boom, helped stimulate the American economy for a decade. To some extent the golden 50’s were a product of helping Germany. As was the European Common Market, predecessor of the EU.

Germany today is struggling with its own stagnant economy – a partial product of self-imposed austerity.  And it is struggling to save the EU, severely fractured by the bitter divide on austerity. What better way to stimulate its own economy than by funding a recovering Greece to enable purchasing imports. It doesn’t even need to be half as forgiving as Greece was to Germany. And healing the divide is at least as important.

Of course, the issues and solution apply far beyond Europe. The World Bank worries about a stagnant world economy. Some economists worry about a century of declining economies. I’ve mentioned before that third world economies are being starved of the ability to continue expanding by the reluctance of the Deutsche Banks of the world to fund them. It’s the EU austerity problem writ very large. And solutions are similar.  Not long ago the World Bank president spoke of the desirability of a Marshall Plan for the world. Think about it.