Greek debt crisis: Germany shouldn’t lecture Greece – it never repaid its own debts, argues Thomas Piketty

European conservatives, particularly in Germany “are about to destroy Europe and the European idea” over their demands to make Greece repay its debt, economist Thomas Piketty has said. 

 

Speaking with German newspaper Die Zeit, later translated on Medium, the outspoken economist claimed it was “a joke” that Germany was demanding Greece repay the €1.6bn (£1.1bn) owed to the IMF, the ECB and the European Union. 

 

"Germany is the country that has never repaid its debts. It has no standing to lecture other nations," Piketty said. 

 

He noted that Germany was “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," he said. "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."

 

He went on to claim Germany was "profiting from Greece, as it extends loans at a comparatively high interest rate".  

 

However, it was not just Germany that came under the spotlight: Piketty also noted that Britain had spent more of its budget repaying debts accumulated during the Napoleonic wars than it did on schools and education. 

 

“That didn’t have to happen, and it shouldn’t happen today,” Piketty said, claiming this was the “completely ridiculous” option currently being recommended to Greece. 

 

Instead, he called for a Europe-wide restructuring of debt and greater flexibility between countries of the Eurozone. 

 

“Europe was founded on debt forgiveness and investment in the future,” he said. “Not on the idea of endless penance. We need to remember this.”

 

He added: “Those who want to chase Greece out of the Eurozone today will end up on the trash heap of history. 

 

“If the Chancellor [Angela Merkel] wants to secure her place in the history books, just like [Helmut] Kohl did during reunification, then she must forge a solution to the Greek question, including a debt conference where we can start with a clean slate. But with renewed, much stronger fiscal discipline.”