Social Europe

politics, economy and employment & labour

  • Themes
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Greece Deserves German Support

Fabian Lindner 11th February 2015 2 Comments

Fabian Lindner

Fabian Lindner

Yanis Varoufakis, the economics professor and new Greek finance minister, used a press conference with Wolfgang Schäuble last week in Berlin to issue an emotional appeal to Germans for solidarity; they, after all, knew from their experiences of the 1930s how bad the political consequences of an economic depression could be.

Are those just the “fine words” of a Greek angling after German money? Here, in Germany, we’re playing down the economic catastrophe of Greece. Yet, if you compare Weimar in the global economic crisis and Greece today, frightening similarities are soon obvious. Worse still: the Greek economy has, meantime, collapsed further and the crisis lasted longer than that of the Weimar Republic.

As the graph below shows, economic output in the Weimar Republic slumped 16% from the eruption of the global financial crisis in 1929 till 1932 – among countries hit by the crisis only the USA experienced a comparably deep slump. Greece’s crisis has so far lasted seven years and economic output has fallen even more steeply than in Weimar – by a quarter. The second graph shows how, in Greece as in Weimar, the crisis was simply made worse by a radical reduction in public spending.

1, German support

2, German support

Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content.


We will never send you spam and you can unsubscribe anytime.

Thank you!

Please check your inbox and click on the link in the confirmation email to complete your newsletter subscription.

.

Public spending in Greece up to now has fallen by a quarter; in Weimar, up to 1932, by only a fifth. No post-war developed economy has cut government spending as much as the Greeks. Nobody can accuse the Greeks of not saving. The Germans voted in Hitler in 1933 because the established parties of those days, Social Democrats and Centre, did nothing against mass impoverishment. It was easy for him to take a stand by breaking with the international consensus on economic policy and, from 1933, hugely extending state intervention. This restored Germans to paid employment and thus legitimised Nazi rule that later led to war. European integration after World War II was supposed to ensure that the same economic mistakes would never be repeated.

In Greece today, as in Weimar those days, the large amount of saving followed most of all high external debts: Weimar was in hock to the French, British and Americans; Greece today to the other members of the Eurozone. Nobody wanted to help the Germans so long as they didn’t start seriously saving. The French in particular mocked the supposed German spendthrift. The economic historian, Tobias Straumann, found a nice quote of March 1930 in Le Figaro that commented on the collapse of the grand coalition under the social democratic Chancellor Hermann Müller:

There are no insuperable material difficulties which have prompted the end of the grand coalition. Certainly, the budget is tough, the deficit worrying. But, with a bit of energy, it should have been possible to get over a tough but by no means desperate situation. To reach this goal would have meant introducing an extremely strict savings plan, especially in social security which had become a bottomless pit. But the socialists simply wouldn’t countenance saving.

What the Germans are saying today about the rest of Europe is exactly what they were told then by the rest of Europe. Just like today in Greece, the Exchequer in Weimar was monitored externally and Germans forced to make strict savings. Without a great deal of joy.

By sticking strictly to spending cuts, now as then, and thereby worsening the crisis, the established parties have simply served to strengthen the Far Right and Left. But there’s a huge, central difference: In Greece a Left party won and its finance minister isn’t calling upon the strength of his own nation but, rightly, on an idea of Europe, the idea of mutual understanding among its peoples. If Syriza and its polyglot finance minister don’t pull it off then the country will simply stay mired in crisis. That will create more nationalism, more enmity among the nations of Europe. No European can possibly want that.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

This blogpost also appeared in German on the Herdentrieb Blog of DIE ZEIT.

Fabian Lindner

Fabian Lindner is a professor of international economics at HTW—University of Applied Science, Berlin.

Home ・ Economy ・ Greece Deserves German Support

Most Popular Posts

schools,Sweden,Swedish,voucher,choice Sweden’s schools: Milton Friedman’s wet dreamLisa Pelling
world order,Russia,China,Europe,United States,US The coming world orderMarc Saxer
south working,remote work ‘South working’: the future of remote workAntonio Aloisi and Luisa Corazza
Russia,Putin,assets,oligarchs Seizing the assets of Russian oligarchsBranko Milanovic
Russians,support,war,Ukraine Why do Russians support the war against Ukraine?Svetlana Erpyleva

Most Recent Posts

trade,values,Russia,Ukraine,globalisation Peace and trade—a new perspectiveGustav Horn
biodiversity,COP15,China,climate COP15: negotiations must come out of the shadowsSandrine Maljean-Dubois
reproductive rights,abortion,hungary,eastern europe,united states,us,poland The uneven battlefield of reproductive rightsAndrea Pető
LNG,EIB,liquefied natural gas,European Investment Bank Ukraine is no reason to invest in gasXavier Sol
schools,Sweden,Swedish,voucher,choice Sweden’s schools: Milton Friedman’s wet dreamLisa Pelling

Other Social Europe Publications

The transatlantic relationship
Women and the coronavirus crisis
RE No. 12: Why No Economic Democracy in Sweden?
US election 2020
Corporate taxation in a globalised era

ETUI advertisement

Bilan social / Social policy in the EU: state of play 2021 and perspectives

The new edition of the Bilan social 2021, co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), reveals that while EU social policy-making took a blow in 2020, 2021 was guided by the re-emerging social aspirations of the European Commission and the launch of several important initiatives. Against the background of Covid-19, climate change and the debate on the future of Europe, the French presidency of the Council of the EU and the von der Leyen commission must now be closely scrutinised by EU citizens and social stakeholders.


AVAILABLE HERE

Eurofound advertisement

Living and working in Europe 2021

The Covid-19 pandemic continued to be a defining force in 2021, and Eurofound continued its work of examining and recording the many and diverse impacts across the EU. Living and working in Europe 2021 provides a snapshot of the changes to employment, work and living conditions in Europe. It also summarises the agency’s findings on issues such as gender equality in employment, wealth inequality and labour shortages. These will have a significant bearing on recovery from the pandemic, resilience in the face of the war in Ukraine and a successful transition to a green and digital future.


AVAILABLE HERE

Foundation for European Progressive Studies Advertisement

EU Care Atlas: a new interactive data map showing how care deficits affect the gender earnings gap in the EU

Browse through the EU Care Atlas, a new interactive data map to help uncover what the statistics are often hiding: how care deficits directly feed into the gender earnings gap.

While attention is often focused on the gender pay gap (13%), the EU Care Atlas brings to light the more worrisome and complex picture of women’s economic inequalities. The pay gap is just one of three main elements that explain the overall earnings gap, which is estimated at 36.7%. The EU Care Atlas illustrates the urgent need to look beyond the pay gap and understand the interplay between the overall earnings gap and care imbalances.


BROWSE THROUGH THE MAP

Hans Böckler Stiftung Advertisement

Towards a new Minimum Wage Policy in Germany and Europe: WSI minimum wage report 2022

The past year has seen a much higher political profile for the issue of minimum wages, not only in Germany, which has seen fresh initiatives to tackle low pay, but also in those many other countries in Europe that have embarked on substantial and sustained increases in statutory minimum wages. One key benchmark in determining what should count as an adequate minimum wage is the threshold of 60 per cent of the median wage, a ratio that has also played a role in the European Commission's proposals for an EU-level policy on minimum wages. This year's WSI Minimum Wage Report highlights the feasibility of achieving minimum wages that meet this criterion, given the political will. And with an increase to 12 euro per hour planned for autumn 2022, Germany might now find itself promoted from laggard to minimum-wage trailblazer.


FREE DOWNLOAD

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us on social media

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube