Greece Renews Threat to Seize ‘War Reparations’ from Germany

The eleventh-hour decision to extend Greece’s bailout a few weeks ago turns out to have been an even closer shave than it seemed at the time, with Reuters reporting that a massive revolt among German conservatives left the vote “hanging by a thread,” as one German legislator put it.  Escalating tensions between sullen Greece and fed-up Germany could make the votes on further bailout extensions or new financing deals even tighter.

The big question is whether the rest of German Chancellor Angela Merkel’s faithful coalition will hold together. “Germans have been outraged by Athens’ anti-German rhetoric, including comments from Prime Minister Alexis Tsipras vowing to seek war reparations from Berlin on the grounds that German troops occupied Greece during World War Two,” Reuters explains.

The “reparations” crisis might be escalating beyond mere populist hot air from the new socialist prime minister, who could certainly use a distraction from popular discontent over the fiscal responsibility concessions he made to qualify for the latest bailout extension.

Yesterday, Tsipras confirmed that a “special parliamentary committee” would be assembled to investigate reparation procedures against the Germans, and he sounded rather belligerent toward his creditors in Berlin: “After the reunification of Germany in 1990, the legal and political conditions were created for this issue to be solved.  But since then, German governments chose silence, legal tricks and delay.”

Furthermore, as Open Europe reports, Greek Justice Minister Nikos Paraskevopoulos announced that he was ready to sign off on a 15-year-old Greek Supreme Court ruling “which established that German property in Greece could be seized as compensation for wartime atrocities.”

If they keep pushing on reparations, or actually begin seizing German property to settle the matter, Greece might just succeed in cracking Merkel’s coalition and triggering the Euro apocalypse everyone has been trying to avoid (perhaps foolishly).  But if Greece does not secure more EU funding soon, the Tsipras government is going to be in big trouble with its voters.  According to Open Europe, Tsipras has already scuttled some of the chicken-in-every-pot government spending bonanza he promised when he ran against “austerity,” and has lately been talking about raiding Greek social security funds for cash to pay pensions and government salaries.

This news is accompanied by an interesting comment from Raol Ruparel of Open Europe that tax evasion is a huge problem in Greece, at every level. “It’s not through complex schemes,” Ruparel said. “It’s simply through shops not giving receipts, and the government not keeping track of what people earn.”

There have long been stories about a general atmosphere of lawlessness in Greece, as people feel entitled to defy a government they believe has betrayed its promises and failed them. Add that to the list of lessons the rest of the world had better start learning from the Greek adventure into end-stage meltdown socialism. Socialism is corruption; its standard operating procedures involve arrangements that would be viewed as corrupt under non-socialist systems.  Eventually, its tendency to reward the well-connected while punishing the Little People it professes to love destroys the legitimacy of government.  It is not hard to find such sentiments expressed on a less dramatic scale across the Western world, including in the United States: everything’s a scam, the elites are above the law, so why should I respect it?

Tim Worstall at Forbes finds a bit of sympathy for one component of the Greek reparations demands against Germany: a “zero interest loan” Greece was forced to make by its Nazi occupiers.  Although the legal case for the 11 billion euros in back interest and other financial charges sought by Greece is dubious, Worstall suggests Germany might pay the sum, which it can easily afford, as an “ex gratia gesture of goodwill.”

There are a few problems with that idea, most importantly that it would merely whet the appetite of Greece to go after other reparations, building on the precedent that Germany admitted to its guilt by forking over the eleven billion – which it might indeed be able to afford, but it’s not chump change, and even leaving the moral dimensions of paying World War Two reparations in 2015 aside, they’re tired of pouring money into Greece.  German opposition parties would probably portray a reparations payment as giving in to extortion.

On Thursday morning, Greece received another 600 million euros in liquidity support from the European Central Bank, but it came after days of verbal sniping between Greek Finance Minister Yanis Varoufakis and his German counterpart, Wolfgang Schaeuble, aptly described by Reuters as a “lightning rod for Greek frustrations.”

Greece lodged a formal complaint with the German government after Schaeuble supposedly insulted Varoufakis earlier this week, although the terms of the alleged insult are vague; the worst thing anyone in the press can come up with was Schaeuble describing Varoufakis as “foolishly naive,” which is (a) a rather mild “insult,” (b) demonstrably true, and (c) might have been a mis-translation of Schaeuble’s remarks anyway.

Maybe the German Finance Minister is trying to pick a fight with Greece, but Greece is unquestionably looking to pick fights with Germany.  This week, Greece’s Defense Minister threatened to flood Europe with a “wave of millions of economic migrants” – including ISIS jihadis – if the Eurozone doesn’t back off its austerity demands. He specifically threatened to send his migrant revenge army to Berlin.  It’s a financial Fight Club with hefty side bets riding on the outcome.