Saturday, March 2, 2013

And forgive us our debts

I want to like Angela Merkel—I really do.  We share a birthday (she's five years younger) and we are both Lutheran PKs.  So there are times when she reminds me of my sisters.  And in spite of being raised in East Germany, she managed to get the historically Catholic CDU with West German / Bavarian roots to make her the head of their party and she then managed to get a reunified country to elect her Prime Minister.  We are talking about a very accomplished woman.

I have spent a little time the last couple of days trying to discover what kind of Lutheran her father, Horst Kasner, actually was.  He was born in Berlin and married a woman from Danzig, so his roots are Prussian.  Part of his theological training came in Hamburg and he spent his professional life essentially working for the Bishop of Hamburg.  Typically, Lutheran clergy are politically to the left of their congregations which in the case of Hamburg, is pretty left.  It's only a few kilometers to the Danish border and so there are many similarities between Hamburg and the Nordic manifestations of Social Democracy.  In addition, Hamburg is a major seaport and long-time unofficial capital of the trading Hanseatic League so it is arguably Germany's most cosmopolitan and outward-looking city.

So when this son of "Red" Berlin and rising figure in the Hamburg bishopric was asked to take a church in East Germany, he went.  DDR was officially atheist so the relationship between the government and the churches was always up for grabs.  The churches were (barely) tolerated because they were keepers of cultural traditions.  And apparently, Kanser was a good teacher / pedagogue so combined with his good socialist credentials, he was able navigate the DDR establishment.  One indicator of his social position was that his children were afforded an elite education, unlike the children in other pastors’ families.

Young Angela wound up studying chemistry—a nice, safe, non-political thing to do.  She probably heard WAY too many political-theological discussions growing up—which ultimately have served her pretty well, but must have been pure agony as a child.  No matter how hard one tries to ignore these things, the lessons of the church tend to stick with us PKs.  So I wonder, how many times did she hear her father preach (or merely comment) on the following text—one of the most famous in all of Christendom?
Matthew 18:23-34 (KJV)
[23] Therefore is the kingdom of heaven likened unto a certain king, which would take account of his servants.
[24] And when he had begun to reckon, one was brought unto him, which owed him ten thousand talents.
[25] But forasmuch as he had not to pay, his lord commanded him to be sold, and his wife, and children, and all that he had, and payment to be made.
[26] The servant therefore fell down, and worshipped him, saying, Lord, have patience with me, and I will pay thee all.
[27] Then the lord of that servant was moved with compassion, and loosed him, and forgave him the debt.
[28] But the same servant went out, and found one of his fellowservants, which owed him an hundred pence: and he laid hands on him, and took him by the throat, saying, Pay me that thou owest.
[29] And his fellowservant fell down at his feet, and besought him, saying, Have patience with me, and I will pay thee all.
[30] And he would not: but went and cast him into prison, till he should pay the debt.
[31] So when his fellowservants saw what was done, they were very sorry, and came and told unto their lord all that was done.
[32] Then his lord, after that he had called him, said unto him, O thou wicked servant, I forgave thee all that debt, because thou desiredst me:
[33] Shouldest not thou also have had compassion on thy fellowservant, even as I had pity on thee?
[34] And his lord was wroth, and delivered him to the tormentors, till he should pay all that was due unto him.
The reason this question is very interesting is because the preacher's daughter is now in the position of the ungrateful servant whose country was historically blessed by a massive debt restructuring 60 years ago but now runs around preaching a new "gospel" that countries like Greece, Spain or Italy must pay every cent they "owe"—especially to the German banks.  I wonder if she truly understands just how strongly her religious traditions condemn her current behavior?  Sometimes we PKs let our minds wander just when we should have paid attention.  I believe, Ms. Merkel, this is one of those times.

German economic miracle: thanks to debt relief?

27.02.2013  Andreas Becker

Highly indebted, without access to capital, viewed suspiciously by creditors - that was Germany in 1953. Half the country's debts were canceled 60 years ago this week - the foundation of the "economic miracle."

Many Germans are still proud of the so-called "economic miracle." Post-war growth was extraordinary - the new Federal Republic's economic output doubled between 1953 and 1963 alone. Generations of schoolchildren have since be taught that the Germans are simply unbelievably hardworking people who were supported by US money after the war.

"That is a very regrettable part of the suppression of history in this country," says Joachim Kaiser of, an alliance that campaigns for the cancellation of debts in the developing world. He believes that the Germans have forgotten that they were hopelessly in debt after World War II, not unlike Greece today.

The parallels with Greece today are hard to overlook

It was only with the London Debt Agreement of 1953 that the German economy was given room to breathe again, says historian Ursula Rombeck-Jaschinski of Stuttgart University: "One could even argue that the economic miracle would have been impossible without the debt agreement."

30 billion Deutschmarks

In those dark days, Germany owed money to around 70 countries, with the debts partly dating from before the war, partly from the short period afterwards. Altogether, the debts were worth around 30 billion Deutschmarks. Budget cuts and laborious repayments were not an option for the West Germans - on the contrary - the economy desperately needed more cash to finance the country's reconstruction and growth.

That much was clear to the banker Hermann-Josef Abs, who led the German delegation in London in 1953 - his mission: to make the creditors of today into the financers and investors of tomorrow.

The negotiations, which began in the summer of 1952, were tortuous. Would the creditors write off their money? Could the Germans be trusted? "There was even a moment when the negotiations almost broke down," says Rombeck-Jaschinski. "The Germans had made the foreign creditors an offer that, from the point of view of the finance ministry, was the most that was possible. The creditors basically considered the offer an insult."

The suspicion of the creditors

The Germans were forced to alter their offer in order for talks to continue. The parallels with current negotiations between Greece and its creditors are obvious. Just like during that year in London, the key is finding the right balance. In 1953, the creditors wanted to get as much of their money back as possible, while at the same time Germany was not to be economically overburdened.

"The Britons above all took the view that the Germans could essentially pay everything back," says Rombeck-Jaschinski. "But the Americans blocked them, because they had an interest in making sure that Germany had money left over for other things, especially rearmament."

Merkel wants to force budget cuts on Greece

The agreement, which all sides finally signed on February 27, 1953, turned into a very good deal for the West German economy - around half of its debts were written off, the rest restructured for the long-term.

Birth of an export nation

On top of that, the agreement laid the foundation for Germany's export strength, as the country could only service its debts as long as it earned money through foreign trade. That, as Kaiser points out, meant creditors had an incentive to buy German products. In his opinion, a similar agreement today would help highly indebted Greece - particularly as the country spent billions on German tanks shortly before the debt crisis began.

"If we said: the Germans will only get their money if they agreed to a Greek trade balance surplus - then the Greeks could export for a long time and bring in German tourists, until they had finally paid for these damned tanks," says Kaiser.

Rombeck-Jaschinski says the situation 60 years ago cannot be transferred to today's problems so easily, but she does think the Germans shouldn't forget that their own country was once hopelessly indebted and dependent on foreign help. more

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