Quite frankly, one involved in business would have to be living in a cave in the middle of nowhere to not be aware of Europe’s debt problems of late. There are numerous theories for how to solve this problem ranging from European Fiscal Unions and bail-out funds to thousands of different austerity measures and the fabled Grexit. Sadly, none of these theoretically viable plans have come to fruition. However, Greece has an idea that is rather unusual but could possibly solve their own debt problems (by far the worse in the EU): unpaid World War II reparations.
Greece has established a panel to scour the history books and try to determine how much in back payments Germany may owe Greece due to war reparations. This is rather interesting as the current debt “war” is often viewed as between the austerity-demanding Germans and the resistant Greeks. This has certainly brought up old wounds and hatred for the Germans on behalf of the Greeks—with many riots in the streets and unfavorable lampoons of Angela Merkel commonplace today. Due to the tension that World War II brings to Europe, it’s usually best to follow the sitcom Fawlty Towers advice and “Don’t Mention the War.”
That being said, times are getting fairly desperate for Greece and there may be a reasonable foundation for their case: allegedly Germany has only paid $100 million of the $7.5 billion they owed Greece. Keep in mind those numbers are in 1946 figures and some claim the unpaid amount today could be as much as €1 trillion! However, Tim Worstall at Forbes thinks this isn’t going to happen for a number of reasons. Regardless, this shows the poor relations currently between German and peripheral Europe. While it may be unlikely for Greece to receive these funds and the case appears non-existent to Germans, if Greece can win their case in an international court it will have lasting implications. For instance, Germany's reputation will be severely undermined and the other PIIGS countries have another route they can exploit to avoid German-imposed austerity measures. The fact Greece is going so far right now shows the unlikeliness of the Eurozone surviving much longer and it will almost certainly implode if Greece wins their case.
This issue will not be resolved until the end of the year but it could become very messy. It never ends well when the war is mentioned in Europe! What do you think of Greek’s new idea? Could it possibly help or will it just be another dramatic twist in the European saga?