Did you know that it wasn’t until October 2010 that Germany finally paid of the last of its Versailles Treaty obligations from 1919 closing the books on World War I?
Is it any wonder that the Greeks are balking at the severe austerity measures proposed by the ECB and the IMF? We saw what austerity did for Germany.
As an example of how long it could take to work through a massive austerity programme, it was only in 2010 that Germany made the last payment required by the Treaty of Versailles from 1919, which called for reparations of what would be the equivalent of 325bn in todays currency. Back then, the treaty was not particularly popular with the German population (not unlike the current reaction of Greek citizens to Greeces austerity programme). Following the treaty, the German parliamentary republic (the so-called Weimar Republic) fell into a massive crisis and disintegrated quickly. The rest is history. One of the lessons learned is that a nation can only be pushed so far and positive incentives need to be set to guarantee cooperation. After World Word II, a different strategy was applied with the Marshall Plan.