Syriza's government has been struggling to reject the destructive austerity policies imposed by the Troika —European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF). Syriza also asked, the same day it assumed government — at the end of last January — for a haircut of Greece's external debt. The country's debt/GDP ratio has grown since 2009 due mostly to the 25% contraction of GDP and is now close to 181%, versus 131% if the GDP had not shrunk.^[i]

The Eurogroup — particularly Germany — has decided to resist any debt write-downs, and both sides have become swamped. The new Greek strategy seems to be focused on collecting the German debt from World War II, which reaches 279,000 million euros or 300,000 million dollars. “Speaking in the parliamentary committee, the Deputy Minister of Finance Dimitris Mardas said that Berlin owned Athens 278.7 thousand million euros, according to calculations made by the General Comptroller of the Nation. An occupation loan for 476 million Reich marks adds up, to this day, with a 3% interest rate, to 10.3 billion euros.”^[ii] This loan was provided by the Bank of Greece to the Nazi government during occupation (April 1941- October 1944). Greece is also requesting the restitution of the Greek treasures stolen during the war that have not been returned —surely many of those shown in Berlin's museums.

Syriza has been working on the computation of Germany's war debt since 2011. Berlin has been shielding behind the agreement signed in September 1990 that ends foreign occupation by the United States, France, Great Britain and the USSR.^[iii] The new and unified Germany of 1990 was not reconstructed as the old German Reich (Deutsches Reich); technically, it is now another country, free of the financial responsibilities signed in the London Agreement of 1953. What is certain is that the name of the country is completely irrelevant for it is the same country with the same history between 1871 and 1945. Greece has a case that may set an international precedent. Article 5 section 2 of the London Agreement of 1953 establishes:

“Consideration of claims arising out of the Second World War by countries which were at war with or were occupied by Germany during that war, and by nationals of such countries, against the Reich and agencies of the Reich […] shall be deferred until the final settlement of the problem of reparation.”

According to the German Federal Archives “[t]he subject of reparations became a current affair ‘with the Two-Plus-Four-Treaty’ dated on September 1990. Finally, the agreement of 1990 was interpreted as a virtual treaty, which means that, according to the regulations of the London Debt Agreement, the payments of pending reparations would not be examined. With help from the United States, renewal of the debate about payments of reparations — unknown by the majority of the public — could be avoided.”^[iv] Greece is taking the subject back to the table; it is not stupid to have raised the veil that covers the way in which the United States and Germany decided, in 1990, not to respect the London Agreement.

There is an interesting precedent in 1970, when Greece requested the United Nations to arbitrate their relation of debt with Germany derived from World War I. Claims arising out of decisions of the Mixed Graeco-German Arbitral Tribunal set up under Article 304 in Part X of the Treaty of Versailles (between Greece and the Federal Republic of Germany), 26 January, 1972. VOLUME XIX pp. 27-64.http://legal.un.org/riaa/cases/vol_XIX/27-64.pdf. The arbitration establishes that, in the end, there cannot be a real and possible negotiation if neither of the parts is prepared to move from their initial position in search of a final solution. The reference is the London Agreement of 1953, and it gives the impression that the Greeks are once again referring the same treaty. In the London Agreement, the Federal Republic of Germany received a decrease of the debt settlement of 62%; this decrease did not include the debt assigned to the German Democratic Republic that ought to have been reincorporated in 1990, had it not been for the consideration that the German Federal Archives mentioned earlier. Without question, the space is open for a new arbitration by the United Nations, analogous to the one in 1970.

Oscar Ugarteche: Peruvian economist; works at the Instituto de Investigaciones Económicas [Institute of Economic Research] at UNAM [National Autonomous University of Mexico], Mexico; Member of the SNI/Conacyt [National Council of Science and Technology];Coordinator of the Observatorio Económico de América Latina [Economic Observatory of Latin America] (OBELA) www.obela.org; president of ALAI www.alainet.org

Tesalia Valencia: Member of the OBELA project, IIEc-UNAM.