<nettime> Jacob Soll: Germany's Destructive Anger (NYT

["Patrice Riemens" <patrice@xs4all.nl>]

Original to NYT, but for url, pls SIY! (Search It Yourself ;-)
fwd with thanks bwo Eduard de Jong



**Germany's Destructive Anger
by Jacob Soll

A DEAL has finally been reached that could keep Greece in the
eurozone. Few are happy with the outcome. We've heard a lot about how
the Greeks feel humiliated. But we've heard less about German anger,
and we know they are angry. Finance Minister Wolfgang Schäuble was
reported to have started yelling during Saturday night's negotiations.
France and Italy have both made huge loans to Greece, but neither
country has expressed hostility to Greece. Why is Germany so angry?

As an economic historian, I got a taste of this resentment during
a conference on Greek sovereign debt held in Munich last week. It
took place at the Center for Economic Studies and the Ifo Institute,
which are headed by Hans-Werner Sinn, the German economist and
longtime proponent of a Grexit. The conference included economists,
accountants, journalists, investors and government officials from
both Greece and Germany. Diverging views were aired by Mitu Gulati,
the Duke law professor who helped devise an earlier Greek bailout;
by Ashoka Mody, an economist, formerly of the International Monetary
Fund, who preaches debt forgiveness; by accounting experts, who agreed
that Greece's total debts seem to have been inflated; and by Mr. Sinn.

But when the German economists spoke at the final session, a
completely different tone took over the room. Within the economic
theories and numbers came a moral message: The Germans were honest
dupes and the Greeks corrupt, unreliable and incompetent. Both parties
were reduced to caricatures of themselves. We've heard this story
throughout the negotiations, but in that room, it was clear how much
resentment shapes the views of German economists.

Clemens Fuest, of the Center for European Economic Research, who
has advised Mr. Schäuble, kept reciting numbers about Greek debt
and growth, and said the Greeks had failed at every level over the
past several years to manage their debt. He believed they should
simply be thrown out of the eurozone. Henrik Enderlein, of the
pro-European Jacques Delors Institute, said that Greece should
stay in the eurozone, but only if it applied more austerity and
better management. Daniel Gros, director of the Center for European
Policy Studies, theorized that Greek debt and economic woes could be
countered only with better export numbers.

All points were important, but to hear it from these economists,
Germany played no real part in the Greek tragedy. They handed over
their money and watched as the Greeks destroyed themselves over the
past four years. Now the Greeks deserved what was coming to them.

When I pointed out that the Germans had played a major role in this
situation, helping at the very least by insisting on austerity and
unsustainable debt over the last three years, doing little to improve
accounting standards, and now effectively imposing devastating capital
controls, Mr. Enderlein and Mr. Fuest scoffed. When I mentioned that
many saw austerity as a new version of the 1919 Versailles Treaty
that would bring in a future "chaotic and unreliable" government in
Greece --- the very kind that Mr. Enderlein warned about in an essay
in The Guardian --- they countered that they were furious about being
compared to Nazis and terrorists.

When I noted that no matter how badly the Greeks had handled their
economy, German demands and the possible chaos of a Grexit risked
political populism, unrest and social misery, they were unmoved.
Debtors who default, they explained, would simply have to suffer, no
matter how rough and even unfair the terms of the loans. There were
those who handled their economies well, and took their suffering
silently, like Finland and Latvia, they said. In contrast, a country
like Greece, where many people don't pay their taxes, did not seem to
merit empathy. It reminded me that in German, debt, "schuld," also
means moral fault or blame.

When I asked if any had visited Greece to assess poverty, brain drain
and business closings, they simply shook their heads. When I asked
what responsibility these leading economists felt in the Greek crisis,
they told me that I could not understand the situation by simply
flying in from the United States. (For the record, I have spent much
of the year in Europe, meeting with the previous Greek government in
Athens --- where I saw hungry old people rummaging in trash cans ---
and later with members of the European Commission in Brussels.)

When the panel split up, German attendees circled me to explain how
the Greeks were robbing the Germans. They did not want to be victims
anymore. While I certainly accepted their economic points and, indeed,
the point that European Union member countries owe Germany so much
money that more defaults could sink Germany, it was hard, in Munich at
least, to see the Germans as true victims.

Here lies a major cultural disconnect, and also a risk for the
Germans. For it seems that their sense of victimization has made
them lose their cool, both in negotiations and in their economic
assessments. If the Germans are going to lead Europe, they can't do it
as victims.


..........
Jacob Soll, a professor of history and accounting at the University of
Southern California, is the author of "The Reckoning: Financial
Accountability and the Rise and Fall of Nations."




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