Piketty Reminds Europe It Was "Founded On Debt Forgiveness"

French economist Thomas Piketty has a history lesson to impart to the austerians led by the greedy, small-bore, right-wing burgermeisters running Germany and, therefore, Europe.  It goes something like this:

“Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted,” Piketty said. “The first lesson that we can take from the history of government debt is that we are not facing a brand new problem.”

Germany, Piketty continued, has “no standing” to lecture other nations about debt repayment, having never paid back its own debts after both World Wars.

“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,” Piketty said. “The French state suffered for decades under this debt. The history of public debt is full of irony. It rarely follows our ideas of order and justice.”

Piketty criticized the “infantile” moral uprightness of Germany, whose economic success upon reunification has led it to rebuke nations like Greece for being in similarly weakened financial states as Germany itself was in decades ago.

Piketty argued that the same debt relief accorded to Germany after World War II should be granted to Greece today.

“After large crises that created huge debt loads, at some point people need to look toward the future. We cannot demand that new generations must pay for decades for the mistakes of their parents,” Piketty said. “The Greeks have, without a doubt, made big mistakes. Until 2009, the government in Athens forged its books. But despite this, the younger generation of Greeks carries no more responsibility for the mistakes of its elders than the younger generation of Germans did in the 1950s and 1960s. We need to look ahead. Europe was founded on debt forgiveness and investment in the future. Not on the idea of endless penance. We need to remember this.”

Will the Germans and the other flawed European moralists remember this?  Given that Piketty's remarks were made last month in the German newspaper Die Zeit, we're not hopeful his views have been persuasive.  But we'll see in the coming days.

Greeks Reject More Crippling Austerity In Bailout Referendum

(Photo: Jack Taylor/AFP/Getty Images)

In a blow to European austerity hardliners led by Germany's small-bore, right-wing burgermeister- cum- Chancellor Angela Merkel, the Greek people voted overwhelmingly to reject "austerity by blackmail" measures that would further cripple the cratered Greek economy:

(Reuters) - Greeks voted overwhelmingly "No" on Sunday in a historic bailout referendum, partial results showed, defying warnings from across Europe that rejecting new austerity terms for fresh financial aid would set their country on a path out of the euro.

With nearly a fifth of the votes counted, official figures showed 60.4 percent of Greeks on course to reject a bailout offer from creditors that was the official issue of the ballot. The figures showed the Yes vote drew 40.1 percent.

Let's step back for a little perspective as to how events have come to this pass.  

How would further austerity measures contribute to economic growth in Greece?  Damned if Merkel, her French poodle Francois  Hollande, and her bankster lap dogs at the European Central Bank, European Commission and IMF care.  Here's Maryland business Prof. Peter Morici:

"Neither Germany's finance ministry, nor any other European government or competent private institution, has tabled a credible analysis demonstrating how more austerity and labor-market reforms (read more layoffs and wage cuts) will instigate growth and not result in even bigger losses for bondholders down the road," he wrote for CNBC. "Another round of austerity would only further pummel the Greek economy, and impose economic deprivation that European leaders should be ashamed to engineer." (our emphasis)

Whose greedy fingerprints are all over this debacle?  Here's former Obama economic adviser Jared Bernstein:

One reason Greek government debt grew so quickly was that Germany, the Eurozone’s powerhouse economy that’s been imposing austerity on the Greeks, used the money from its trade surpluses not to buy imports from weaker peripheral economies, like Greece, thereby helping to foster more balanced growth and less debt in the region. Instead, they bought Greek debt, financing the run-up we’re dealing with today.  (our emphasis)

So, why the irrational, hardline pressure on Greece to knuckle under to Europe's Germany's unreasonable demands?  Here's Mark Weisbrot, co-founder of the Center for Economic and Policy Research:

“So European authorities continue to take steps to undermine the Greek economy and government, hoping to get rid of the government and get a new one that will do what they want," he wrote in The Globe and Mail this week.  (our emphasis)

That's right.  The suits in the European bankster club and their right-wing politicos in Europe want to squeeze Greece in order to oust its left-wing government.  What they've done, in their overboard cruelty and rigidity, is to give Greek Prime Minister Tspiras a stunning mandate to reject further unreasonable austerity whose only result so far has been to crash the Greek economy.  Greek democracy at its best.

BONUS:  Paul Krugman on the "truly vile campaign of bullying and intimidation" that Greece stood up to today.

"Greece Did OK"

Paul Krugman writes about last week's last-minute deal to avert a calamity in the Greek debt crisis:

Now that the dust has settled a bit, we can look calmly at the deal — if it really is a deal that survives through tomorrow, which some people doubt. And it’s increasingly clear that Greece came out in significantly better shape, at least for now. 

The main action, always, involves the Greek primary surplus — how much more will they need to raise in revenue than they can spend on things other than interest? The question these past few days would be whether the Greeks would be forced into agreeing to aim for very high primary surpluses under the threat of being pushed into immediate crisis. And they weren’t.

He further points out that, contrary to the environment several years ago when the austerians =cough= mostly Frau Merkel's Germany =cough= were in the ascendance, the Greeks were given some breathing room -- for at least 4 months -- and avoided a credit cutoff.

Germany: Putin, Ja! Greece, Nein!

The uber-austerians in Berlin are tough.  They won't let up until Greece - the birthplace of democracy - is buried:

Germany quickly rejected a conciliatory bailout proposal by Greece on Thursday, dampening hopes that emergency talks might break a deadlock threatening the country with default and an exit from the euro.

But Putin, well that's another bowl of borscht:

France and Germany, which oversaw marathon peace talks between the Ukrainian and Russian leaders last week in Minsk, Belarus, both signaled Thursday that they’re determined to salvage the cease-fire deal and keep the two sides talking. 

The German government said the four leaders had agreed “to stick to the Minsk agreements despite the serious breach of the cease-fire in Debaltseve.” It said “immediate concrete steps” were necessary to ensure that the cease-fire is fully implemented and heavy weapons are withdrawn.  (our emphasis)

Unlike Russia, Greece doesn't have a natural gas pipeline going up Frau Merkel's heinie.

Scheisse kopfe!