As the bankers queue up to get served their pound of flesh, which is all that’s currently on offer, it’s hard not to notice the striking similarities between the Greece of today and Germany in 1923. Then Germany owed billions thanks to a treaty that was made in a French-speaking country along with an offer that couldn’t be refused, back then Versailles, this time Maastricht.   

Back then government employees were demanding their wages, unions were on strike, the coffers were empty, and the government of the day chose to inflate away the problem. That is one of the options presented to Greece today; they can leave the Euro, default on the debts, and inflate away the cost of the commitments made by previous governments to unions, pensioners, and government employees. 

There are two other alternatives; the first is austerity, although it’s getting harder to do the austerity thing these days, now that it’s considered politically incorrect to shoot at rioters with live ammunition, which wasn’t an issue in 1923. The other way is to sell up the assets of the country; which was an idea the French came up with when they occupied the industrial heartland of Germany in order to convince them to “honor their obligations”.

From Wikipedia: 

By 1923, the Weimar Republic could no longer afford the reparations payments required by the Versailles Treaty, and on some payments. In response, French and Belgian troops occupied the Ruhr region, Germany's most productive industrial region at the time, taking control of most mining and manufacturing companies. Strikes were called, and passive resistance was encouraged which lasted eight months, further damaging the economy and increasing the expense of imports. This infuriated the French, who began to kill and exile protestors in the region.

Outside of the detail that French and German bankers can’t occupy the tourist hot-spots of Greece and kill any protestors who object, there are two problems with collecting proxies for collateral that was never offered. First the Greek state postal system probably has a negative NPV, and the Acropolis, well I know it would look great as an anchor attraction in a theme park in Düsseldorf, but you can’t be serious!!

The second is that in any case the full resources of the joke which passes for the fragmented European “defense” capability is currently engaged doing, I’m not quite sure what, or for…

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