The memory returns every time some aggrieved victor demands an extortionate tribute from the losing nation, not realizing that such vindictiveness will hurt both nations, making it unlikely that the vanquished country will ever be able to make the payments, and crippling its economy in general. Instead of a strong partner for peace, the victor achieves only a mutual destruction.
The memory that returns is that of Britain's David Lloyd George as he prepared to "negotiate" the treaty that would formally end the First World War at Versailles, and, in one version of the story, explained that his policy was to squeeze the vulnerable new German republic "till the pips squeak."
Now it is the Greeks who are demanding that the Germans repay the loans they extorted from occupied Greece during the Second World War, forgetting how much credit the Germans and the rest of Europe have extended to Greece over recent years, which its spendthrift government has squandered.
It was John Maynard Keynes who foresaw the disastrous consequences of such a policy when he wrote The Economic Consequences of the Peace as the victorious Allies gathered at Versailles to formally end the First World War, and impose harsh and mutually destructive terms on the infant German republic. Now the Greeks are acting under the same dangerous delusion. They need to wake up and learn from the sad history of vindictive peace treaties.
Editorial on 03/25/2015