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German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras Photo Credit: Bundesregierung |
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Sixty-three years after the 1953 London Debt Agreement (8 August),
Greece’s Prime Minister Alexis Tsipras stressed that Europe should rise
to the occasion and grant Athens a debt relief. In a message posted on Facebook, the Greek premier reminded his EU
partners of Germany’s debt cut and how this helped the debt-ridden
country recover. The 1953 London Agreement on German External Debts was a debt relief
treaty between the Federal Republic of Germany and creditor nations. It covered money owed before and after WWII and reduced West German
debt by 50 percent and stretched the repayment out over 30 years. This
enabled Western Germany to quickly recover after the defeat and reemerge
as a world economic power. “On this day, in August 8, 1953, a nearly six-month negotiation
between Germany and its creditors was concluded, with the signing of the
London Debt Agreement. The debt-ridden and war-torn Germany enjoys the
ultimate move of solidarity in modern European history by having 60
percent of its foreign debt cancelled, its internal debts restructured
and a trade surplus clause,” Tsipras stressed, underlining that the deal
was implemented with Greece’s signature. He continued, saying that Syriza, while it was in the opposition but
also now in government, has always raised the issue of the Greek debt.
Such move has won significant ground, achieving specific results in the
Eurogroup’s decision on 24 May. The Eurogroup agreement in May contains provisions to ease the Greek
debt after the expiry of the latest bailout deal in 2018, after the 2017
German elections. The International Monetary Fund has made it clear that it will not
provide any financial support if the Europeans do not clearly announce
the debt relief measures they intend to take in order to make the
country’s debt sustainable. “Europe must rise to the occasion and turn its gaze to the future by
signing a new social contract that will guarantee the prosperity of its
people,” he added. In an interview
with Financial Times, US Treasury secretary Jack Lew said that Greece’s
debt issue should be solved so the country can help stabilise the
region. “I would hope [the recent regional upheaval] would change the climate
in which discussions of debt relief happen, just because it’s the right
thing to do on its own, and at a time when Greece is in a position [of]
geopolitical significance that’s a good time to reinforce their fiscal
future,” Lew said. “You have to fix the foundation to have a strong Greece,” he added.
EurActiv