Noah denkt™ - The Power of Balanced Reasoning
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How much money has actually flowed from Germany to Greece in the spirit of
post-war reconciliation?
Response to Greece’s demand for additional German reparation payments, first drafted on Feb. 11, published
on Feb. 12, 2015

The new Greek government under
Prime Minister Tsipras has made it repeatedly clear that in its view Germany
continues to have a moral obligation to adequately compensate Greece for atrocities committed by Nazi-
Germany during the war-time occupation of that country. Since we have not seen this anywhere else, Noah
denkt™ has decided to do its math on how much money has already flowed in the spirit of reconciliation from
Germany to Greece since the end of World War II. In particular, we have tried to determine whether these
reconciliatory gestures of the Federal Republic of Germany had a material impact inferior to that now
demanded and expected by parts of the Greek public. The various reconciliatory gestures of Germany and
their material benefit for Greece that we have identified are the following:

  • First reconciliatory gesture of post-war Germany to Greece: In 1946, occupied West-Germany sends
    machines worth US$ 25 Mio to Greece

  • Second reconciliatory gesture towards Greece: After an agreement with Greece on March 18, 1960,
    Germany pays DM 115 Mio for Greek victims of the Nazi occupation

  • Third reconciliatory gesture towards Greece: Germany supports Greece’s entry into the European Union.
    As a member of the European Union, Greece is eligible to receive funds from a variety of social policy
    instruments such as the European Regional Development Fund, the European Social Fund, the
    European Agricultural Guidance and Guarantee Fund, the Finance Instrument for Fisheries Guidance or
    the Cohesion Fund. Unfortunately, it is hard to get a clear picture on how much money has flowed to
    Greece out off these funds.(see also Footnote *) But it is clear that the number is substantial since
    Greece tended to be the second-largest EU budget beneficiary. An article in „Deutsche Wirtschafts
    Nachrichten“ of 2012 states that according to the EU Commission about Euro 380 Bio have been
    transferred to Greece in international aid prior to the financial crisis.  That number cannot be verified by
    Noah denkt™. In any case, it is quite likely that amount of money which has flowed to Greece from the
    EU is in triple digit billions. Now, what does that have to do with Germany:  Germany provides 21.11% of
    the EU budget and is the biggest net contributor. (€7.5 Bio in 2011); So about 20% of the substantial
    funds that Greece has received throughout the years from the EU are being footed by German

  • Fourth reconciliatory gesture by Germany to Greece: Germany (among others) agrees to enter into a
    currency union with Greece. In other words, Germany and other Euro members are prepared to lend
    Greece some of their own credibility in the financial markets. The immediate effect of this is that Greek
    borrowing costs for national debt placed in the market falls from 20% in pre-Euro times to 4% in 2005.
    According to index mundi, (see: (, Greece
    paid between 2001 and 2009 a total amount of Euro 88,610,000,000 in interest on its government debt.
    Let’s suppose that the average borrowing costs for Greece hovered around 8%, at the time, i.e. well
    below the 20% pre-Euro membership level, then Greece saved a total of Euro 132,915,000,000 in
    interest payments due to its EU membership. Now given that Germany’s share of the Eurozone GDP is
    28%, it is not far-fetched to presume that Greece saved a total of Euro 37,216,200,000 in interest
    payments due to Germany’s willingness to lend Greece part of its economic credibility.

  • Fifth reconciliatory gesture by Germany to Greece: The First Greek Bail-out 2010; In conjunction with
    other Euro-area members Germany lends Euro 15,7 Bio to Greece (plus what is its share of the Euro 30
    Bio IMF credit (Euro 1,5 Bio)) repayable at an interest rate between 3,423 and 4,528 %, - again well
    below market rates.  Until 2011, Greece pays Euro 380 Mio in interest to Germany. Obviously, that
    interest would have tripled, if the loan had been made at regular market rates.

  • Sixth reconciliatory gesture by Germany to Greece: The Second Greek Bail-out 2012; As we understand
    it, the European Financial Stability Facility lends Greece Euro 141.8 Bio (Germany’s share 38,286 Bio
    (27%)) (see Footnote **) The interest rate is 1,5% and the average maturity of the loan extends as far as
    32 years. The IMF lends almost Euro 25 Bio (reminder: Germany’s share of the IMF: 5,81%). The
    average rate here varies between 3 percent and 4 percent. Greece is scheduled to repay about Euro
    19.4 Bio to the IMF by 2019, and another Euro 6.4 Bio between 2020 and 2024. On the other hand, the
    ECB continues to buy Greek debt. According to Bloomberg, the ECB and Euro-area central banks
    currently own about Euro 27 Bio of Greek bonds. 17.9973% of the ECB capital is contributed by the
    German Bundesbank. Should Greece default Germany would, according to the IFO-Institute, have to
    write-off a total of Euros 82 Bio  In other words, it is a very big hand that Germany has extend towards

  • Seventh reconciliatory gesture by Germany to Greece: The Debt Restructuring 2012; Here are some
    German institutions that were affected by the Greek debt restructuring of 2012 the tap of which had to be
    picked up in large part by the German tax payer: Deutsche Hypo Real Estate, now a nationalized entity
    had to write off approx Euro 8 Bio. Euro 14 Bio  are being written off by institutions that are either partly
    or wholly owned by the German public (700 Mio written off by WestLB, 219 Mio written off by KfW-Group
    of Banks, a triple-digit Mio number written off by 427 municipal and regional Sparkassen, 180 Mio written
    off by Landesbank Berlin, 75 Mio written off by Dekabank, 600 Mio written off by Landesbank Baden-
    Württemberg, 50 Mio written off by HSH Nordbank, 85 Mio written off by Helaba); - Commerzbank, 25%
    owned by the German state, writes off Euro 3 Bio. In total German Banks, Insurers and Mutual Funds
    together write off approx. 20 Bio Euro.

Now, we leave it to you, dear Reader, to determine whether Germany still has some outstanding moral debt to
pay in Greece. While doing that we should like to remind you though of the likely Greek position in this matter.
After all, it is only natural to expect that the current Greek government will probably argue that it weren't entirely
unselfish reasons that lead Germany to contribute to the aforementioned Greek rescue packages (i.e. a desire
to stabilize the Euro-project as a whole, to prop-up Germany’s crisis-ridden banks, to secure the viability of
Germany’s export markets and so on). One can also imagine that parts of the Greek public will maintain that
payments in the context of the European Union do not qualify as reparation, since there is no public expression
of contrition coming with them. Obviously, there is an element of truth in this. At the same time though, it is
equally important to remember that the EU/Euro-project itself has been created with the idea to overcome past
antagonisms and spur a new sense of unity among European countries. That notion of reconciliation, however,
is being challenged by Greece invoking, 70 years later, unhealed wounds of the past. One could easily argue
that such claims demonstrate that the healing which was originally intended by the Euro-project has not
materialized. Or to put it differently: The latest Greek reparation demands show that countries such as Greece
never let Germany off the hook for its abominable past, no matter how much money German taxpayers are
willing to spend on reparation.  At least, this is something that needs to be discussed further. And we can only
hope that in this discussion the general public will be just as generous with the German people as the
European Union Regional Fund has been with Greece.  

Footnote *: Noah denkt™ has contacted the management of the European Regional Fund (ERF) to get an
authoritative number. The ERF answer however is still pending to this day, - perhaps out of embarrassment …

Footnote **: Different media report slightly different numbers here. The numbers given here stem from the
pertaining Bloomberg article. The
German newspaper “Die Welt” puts the numbers as follow:  The EFSF
disemburses so far 73,9 Bio Euro. Germany’s share of that amount is Euro 34,5 Bio.
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Germany's moral obligation towards Greece, Germany's reparation payments to
Greece, Germany's reconciliation with Greece, Greece's reparation claims to
Germany, German taxpayers subsidizes Greece, Germany pays several billion
Euros to Greece