Nov 122017
 November 12, 2017  Posted by at 9:47 am Finance Tagged with: , , , , , , , , , ,  3 Responses »
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Fifth Avenue at 25th Street. New York City 1905


“Bitcoin Cash” Quadruples in 2 Days. Bitcoin Crashes by $35 Billion (WS)
Podesta Group “Will Not Exist At The End Of The Year” (ZH)
Global Banks, City of London Raise “Disorderly Brexit” Alarm (DQ)
Forty UK Conservative Lawmakers Ready To Oust PM May (R.)
Theresa May Faces Defeat By MPs Demanding Vote On Final Brexit Deal (G.)
Sack Boris Johnson For Shaming Our Nation, Jeremy Corbyn Tells PM (G.)
German War Reparations ‘Matter Of Honor’ For Poland (R.)
750,000 Protesters Flood Barcelona Demanding Release Of Catalan Leaders (R.)
EU Has Become A ‘Caricature’ Of Its Founding Values – Puidgemont (RT)
Trafficking Laws ‘Target Refugee Aid Workers In EU’ (G.)
Greece’s Middle Incomes Go Under The Knife (K.)



Safe to say that Wolf Richter is not a big fan.

“Bitcoin Cash” Quadruples in 2 Days. Bitcoin Crashes by $35 Billion (WS)

I’m writing this Saturday night, Pacific Time, and cryptos never rest. By Sunday morning, “Bitcoin Cash” might have soared another $1,000 or crashed by $1,000; and bitcoin might have soared or crashed by another $1,500. Neither would surprise me, the way these things are going. One thing for sure, you’re not watching grass grow. Bitcoin Cash, which was split from bitcoin in August, began surging from $630 on Thursday mid-day Pacific Time. Within 24 hours, it jumped 50% (or by $320) to $950. It then lost steam. But in the wee hours of Saturday morning, it fired up again and soared another $450 to $1,400 by late morning. It then fell off, but Saturday night, it returned to form and spiked to $2,448 at the moment, nearly quadrupling in two days. Here is what the move looks like in US dollars in a seven-day chart (via WorldCoinIndex):

Its market valuation jumped by $30 billion over the two days, from $10.6 billion to $41 billion. I mean why even bother with the stock market. Bitcoin went the opposite way. It plunged from a peak of $7,771 on November 8 mid-morning to $5,519 at this moment, losing $2,252 or 29% in three days. It’s now back where it first had been in late October. Its market valuation plunged by $35 billion from $127 billion to $92 billion. $35 billion is starting to add up, so to speak (via WorldCoinIndex):

Bitcoin ran into an entanglement on November 8, when developers called off a planned software upgrade, SegWit2x. The upgrade was supposed to have improved transactions speeds. This was blamed for the plunge that started on Wednesday. Then the fun focused on Bitcoin Cash. By Friday, as Bitcoin Cash had soared 50% while bitcoin was crashing, it was blamed on traders that were switching from chasing after bitcoin to chasing after Bitcoin Cash. At the time, Joshua Raymond, a director at the foreign-exchange and CFD broker XTB, told Business Insider: “The delay to Segwit2x has damaged confidence amongst bitcoin investors concerning the much-needed resolution to speed up bitcoin’s slow processing speed.

“Everyone was hoping the Segwit2x would address this but unfortunately, the delay due to a lack of consensus on the mechanics has affected confidence. Confidence on transaction speed in Bitcoin has deteriorated significantly in recent months. As Bitcoin Cash enjoys much faster transaction speeds, we have started to see a recycling of positions out of Bitcoin into Bitcoin Cash as a consequence.” Just don’t call cryptos an investment or asset or asset class or currency. While they could be used as currency, in reality, these kinds of violent moves make their use as currency way too risky and nonsensical. What’s left? The blockchain technology, which underpins these cryptos, is free and open source. Currently a lot of smart brains are trying to figure out how to put the technology to work in all kinds of industries.

Some of them will likely succeed. I’m looking forward to the moment when there is a way of transferring money around the world that is universal, convenient, cheap, fast, not subject to violent fluctuations, and 100% reliable. But that moment isn’t here yet, and neither bitcoin nor Bitcoin Cash will have anything to do with it. Instead of being usable currencies, cryptos – CoinMarketCap lists nearly 1,300 of them, with many of them already worthless – are a form of online betting based on a new technology, and they’re subject to different dynamics than classic online betting, but not regulated or forbidden by governments, unlike classic online betting.

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“..both sides of the swamp should probably control themselves in any premature celebrations as this appears to be far from over..”

Podesta Group “Will Not Exist At The End Of The Year” (ZH)

Just three weeks after we reported that special counsel Mueller was targeting lobbying firm Podesta Group. and just two weeks after Tony Podesta resigned from his position at the firm he founded, The Hill reports that Kimberley Fritts, the Podesta Group’s chief executive, told employees on Thursday that the firm would not exist at the end of the year and that they would likely not be paid through the end of November, sources told CNN. Fritts announced her resignation from the top Washington lobbying group after Podesta left the company amid ties to indictments filed in the Russia investigation. Fritts is beginning work on launching a new firm. Her last day at the company Friday created new uncertainty for the Podesta Group after the departure of Podesta on Oct. 30.

Multiple employees who spoke to The Hill said the mood at the firm was mostly optimistic, though they said many of the firm’s dozens of employees could be in limbo as Fritts sets up the new firm and brings Podesta Group talent and clients with her. As a reminder, Mueller is now investigating whether the Podesta Group properly identified to U.S. authorities its foreign work on behalf of a Ukrainian advocacy group in Europe, CNN reported. An NBC report found that the Podesta Group was one of several firms working on Paul Manafort’s public relations campaign for European Centre for a Modern Ukraine, which the Podesta Group claims it thought was a nonpartisan think tank, something which this site reported first last August. And here is one reason why we suspect more than a few on the left are now concerned…

It goes without saying, that Podesta’s brother, John, is arguably one of the top figure in Democratic politics, serving most recently as chief of staff in the Bill Clinton White House and also as the chairman of Hillary Clinton’s 2016 presidential campaign. What happens next to Tony (and perhaps his brother John) is to be determined, but one thing is clear: both sides of the swamp should probably control themselves in any premature celebrations as this appears to be far from over.

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“..the Brexit vote has presented rival European nations and the ECB with a golden opportunity to undermine the UK’s domination of Europe’s financial industry. They won’t let it go to waste.”

Global Banks, City of London Raise “Disorderly Brexit” Alarm (DQ)

For the City of London Corporation, the prospect of a messy Brexit is even more terrifying than it is for many of the global banks it hosts within its coveted Square Mile. The Bank of England has warned that up to 75,000 jobs could be lost in the financial sector following Britain’s departure from the European Union. But it’s not just jobs that are on the line; so, too, is the Square Mile’s role as the world’s most important financial center, not to mention the backbone of the UK economy. In recent months the European Commission and the European Central Bank have redoubled their efforts to compel financial institutions to move at least some of their operations onto the continent. “I have a very clear message to both smaller and larger banks: the clock is ticking,” said Sabine Lautenschläger, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB.

“No one knows how Brexit will play out, and that’s why all affected banks should prepare themselves with a hard Brexit in mind.” Some banks are already taking action. Goldman has set aside the top eight floors of a 37-story block under construction in Frankfurt which is expected to be ready for occupation in the third quarter of 2019. Just a few months before that, construction work on the bank’s new £350m European headquarters in central London should be completed. Ten days ago, Goldman Sachs CEO Lloyd Blankfein, posted a tweet of an aerial shot of the half-finished construction in London, with the words “expecting/hoping to fill it up, but so much outside our control.” As the head of an organization with alumni at the very top of both the Bank of England and the ECB as well as tentacles that reach out to just about every corner of the old continent, Blankfein is clearly selling Goldman short, if you’ll excuse the pun.

Goldman’s not the only major bank hedging its bets. On Tuesday Germany’s struggling behemoth, Deutsche Bank, announced that it had signed an agreement to occupy at least 469,000 square feet at a site under construction in the City of London. The move comes despite a warning in April that thousands of Deutsche Bank’s UK staff may have to relocate after Brexit. To that end, Deutsche has begun work on a Frankfurt booking center that would take up some of the slack if the German lender was forced to turn its London branch into a subsidiary when Britain leaves the EU.

Most banks would prefer the status quo to continue, with the lion’s share of their operations remaining in London, which already has the physical infrastructure, legal apparatus and friendly political and regulatory culture needed to support the full gamut of global financial services. But the Brexit vote has presented rival European nations and the ECB with a golden opportunity to undermine the UK’s domination of Europe’s financial industry. They won’t let it go to waste.

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It truly is Monty Python by now.

Forty UK Conservative Lawmakers Ready To Oust PM May (R.)

Forty members of parliament from Prime Minister Theresa May’s Conservative Party have agreed to sign a letter of no-confidence in her, the Sunday Times newspaper reported. That is eight short of the number needed to trigger a party leadership contest, the mechanism through which May could be forced from office and replaced by another Conservative. May has been struggling to maintain her authority over her party since a snap election on June 8 which she called thinking she would win by a wide margin but instead resulted in her losing her parliamentary majority. Divided over how to extricate Britain from the European Union and hit by multiple scandals involving ministers, May’s government has failed to assert control over a chaotic political situation that is weakening London’s hand in Brexit talks.

An earlier attempt to unseat May in the wake of her disastrous speech at the annual party conference fizzled out, but many Conservatives remain unhappy with the prime minister’s performance and talk of a leadership contest has not gone away. May has lost two cabinet ministers in as many weeks: Michael Fallon stepped down as defense secretary after becoming implicated in a wider scandal about sexual misconduct in parliament, while Priti Patel resigned as aid minister after she was found to have had secret meetings with top Israeli officials.

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So there’s those who just want her gone, and then there’s the ones who look for a reason.

Theresa May Faces Defeat By MPs Demanding Vote On Final Brexit Deal (G.)

Theresa May faces a devastating Commons defeat over Brexit within weeks if she continues to deny parliament a meaningful vote on the final deal with the EU, Tory and Labour MPs have warned. With the withdrawal bill returning to the Commons on Tuesday, a cross-party group who oppose a hard Brexit and are co-operating on tactics say they believe they have the numbers to defeat the government if they are denied such a vote. While the critical amendments and closest votes are not expected to be taken until next month, Tories who oppose a hard Brexit insist there is no softening of their position and that they are biding their time ready to strike before Christmas. Some Tories say they are even more determined to insist on parliament’s right to veto a bad or no deal because the prime minister appears not to have responded to any of their concerns over recent weeks.

Instead, in what was seen by many as a provocative move, she announced last week that the government had tabled its own amendment that would commit the UK to formally leaving on 29 March 2019, whatever the outcome of negotiations and even if there were no deal. Meanwhile, a secret memo to May written by Boris Johnson and Michael Gove dictating terms for a hard Brexit has emerged. In blunt terms, the pair tell the prime minister to “underline her resolve” to achieve a total break with Brussels, and name 30 June 2021 as the fixed end of Britain’s transition period after leaving the EU in March 2019. The missive will undoubtedly lead critics to say the prime minister is being held hostage by the leading Brexiters. A Commons defeat for May over Brexit, at a time when her government is reeling from the loss of two cabinet ministers in six days – and may lose more – would raise further questions over her ability to survive as prime minister.

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She better be quick then, or she won’t have the job anymore.

Sack Boris Johnson For Shaming Our Nation, Jeremy Corbyn Tells PM (G.)

jeremy Corbyn has fired an extraordinary broadside against Boris Johnson, calling for him to be sacked immediately as foreign secretary for “undermining our country” and “putting our citizens at risk”. The blistering attack – and demand that Theresa May fire him – was delivered exclusively in a statement to the Observer on Saturday night, as pressure mounted on Johnson over his diplomatic blunder in the case of Nazanin Zaghari-Ratcliffe, the British mother imprisoned in Iran. The Labour leader cites a litany of undiplomatic and ill-chosen statements from Johnson since his appointment by May as foreign secretary in July last year. Corbyn accuses him of having a “colonial throwback take on the world”, and of repeatedly “letting our country down”.

It is the mishandling of the “heartbreaking” case of Zaghari-Ratcliffe that persuaded Corbyn to call for his dismissal. His statement ends: “We’ve put up with Johnson embarrassing and undermining our country with his incompetence and colonial throwback views and putting our citizens at risk for long enough. It’s time for him to go.” The intervention places both May and Johnson under renewed pressure after 10 days in which the prime minister has been forced to dismiss defence secretary Sir Michael Fallon for inappropriate behaviour towards women, and the international development secretary, Priti Patel, for conducting a freelance aid policy in the Middle East without informing No 10 or the Foreign Office.

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Get in line.

German War Reparations ‘Matter Of Honor’ For Poland (R.)

Demanding reparations from Germany for its actions in Poland during World War Two is a matter of honor for Warsaw, Jaroslaw Kaczynski, the leader of Polish ruling Law and Justice (PiS) party, said on Saturday. The issue of reparations, revived by Poland’s eurosceptic PiS after decades of improving relations with Germany, could escalate tensions between the two European Union members. In September Polish parliamentary legal experts ruled that Warsaw has the right to demand reparations from Germany, although Poland’s foreign minister indicated that no immediate claim would be made. “The French were paid, Jews were paid, many other nations were paid for the losses they suffered during World War Two. Poles were not,” Kaczynski said.

“It is not only about material funds. It is about our status, our honor … And this is not theater. This is our demand, a totally serious demand,” added Kaczynski, Poland’s de facto leader. The PiS government, deeply distrustful of Germany, has raised calls for wartime compensation in recent months but Foreign Minister Witold Waszczykowski has said further analysis was needed before any claims were lodged. Six million Poles, including three million Polish Jews, were killed during the war, and the capital Warsaw was razed to the ground in 1944 after a failed uprising in which 200,000 civilians died.

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They’ll have to do a lot more demonstrating.

750,000 Protesters Flood Barcelona Demanding Release Of Catalan Leaders (R.)

Hundreds of thousands of Catalan independence supporters clogged one of Barcelona’s main avenues on Saturday to demand the release of separatist leaders held in prison for their roles in the region’s banned drive to split from Spain. Wearing yellow ribbons on their lapels to signify support, they filled the length of the Avenue Marina that runs from the beach to Barcelona’s iconic Sagrada Familia church, while the jailed leaders’ families made speeches. Catalonia’s two main grassroots independence groups called the march, under the slogan “Freedom for the political prisoners,” after their leaders were remanded in custody on charges of sedition last month. The protest is seen as a test of how the independence movement’s support has fared since the Catalan government declared independence on Oct. 27, prompting Spanish Prime Minister Mariano Rajoy to fire its members, dissolve the regional parliament and call new elections for December.

An opinion poll this week showed that pro-independence parties would win the largest share of the vote, though a majority was not assured and question marks remain over ousted regional head Carles Puigdemont’s leadership of the separatist cause. “Look at all the people here,” said 63-year-old Pep Morales. “The independence movement is still going strong.” Barcelona police said about 750,000 people had attended, many from across Catalonia. The protesters carried photos with the faces of those in prison, waved the red-and-yellow striped Catalan independence flag and shone lights from their phones. The Spanish High Court has jailed eight former Catalan government members, along with the leaders of the Catalan National Assembly (ANC) and Omnium Cultural, while investigations continue.

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That’s true in many ways.

EU Has Become A ‘Caricature’ Of Its Founding Values – Puidgemont (RT)

Sacked Catalan leader Carles Puigdemont has lashed out against the European Union (EU) over its response to the Catalan crisis, in which Brussels sided with Madrid in suppressing the independence drive of the region. Puigdemont criticized the EU as a “caricature of what Europe is and of what we want Europe to be,” claiming, there is “no will to help solve the politics of the conflict.” Catalonia staged a regional independence referendum on October 1, amid a massive crackdown by police on voters in which nearly 900 people were injured. Following the ‘yes’ vote, Barcelona attempted to initiate dialogue with the central government, hoping the EU would step in and act as mediator to help defuse tensions.

Leaders of European nations, as well as the EU’s main institutions, sided with the Spanish Prime Minister Mariano Rajoy instead, and refused to recognize Catalonia’s self-determination call, referring to the crisis as an internal Spanish matter. The former Catalan leader sees it as a betrayal of the fundamental “values that took us to constitute Europe.” Puigdemont believes the EU leadership, which he said comprises “four or five governments,” are “probably not the most appropriate to lead the EU.” “What will the EU become in hands of this people?” the former Catalan leader asked, pointing out that he does not want the EU’s leadership to “confuse” traditional European values with “their political and economic interests.”

Just this week, European Commission President Jean-Claude Juncker called on all member nations to fight against separatist tendencies in Europe, apparently in reference to Scotland, Lombardy, Venice and other regions throughout the continent which have expressed strong self-determination ambitions. “Nationalisms are a poison that prevent Europe from working together,” Juncker said Thursday in the Spanish city of Salamanca. “We cannot stay with our arms crossed because it is time for us to do what needs to be done. I say ‘no’ to any form of separatism that weakens Europe and further widens the existing fissures.” [..] “To be treated like a criminal, like a drug-trafficker, like a paedophile, like a serial killer, I think this is abuse,” the Catalan leader lamented. “This isn’t politics, this is using the courts to do politics.”

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The shame of the EU keeps getting bigger and deeper.

Trafficking Laws ‘Target Refugee Aid Workers In EU’ (G.)

Aid workers are being targeted throughout Europe as countries including the UK use laws aimed at traffickers and smugglers to discourage humanitarian activity, a study claims. A six-month investigation by the London-based Institute of Race Relations documented the prosecutions of 45 individual “humanitarian actors” under anti-smuggling or immigration laws in 26 separate actions over the past two years. Examples include a 25-year-old British volunteer with a refugee support group, who last January sought to bring an Albanian mother and two children to the UK in the boot of her car so they could join their husband and father. She was sentenced in March to 14 months in jail, although the sentence was suspended to take into account her “misguided humanitarianism”.

UK law does not distinguish between humanitarian and commercial motives in such prosecutions, but does take such factors into account in sentencing. In Switzerland, a 43-year-old woman known to refugees as Mother Teresa for her work in providing food for those stranded on the Italian side of the border, was sentenced in September to a fine and a suspended 80-day jail term for helping unaccompanied children into the country. In France, British volunteers helping refugees in Calais have frequently been harassed by the authorities. In October 2015, former British soldier Rob Lawrie was arrested at the border for hiding a four-year-old Afghan child in his van in response to her father’s pleas to take her to relatives in Leeds. Lawrie, from West Yorkshire, avoided jail after a French court found him guilty of the lesser charge of endangerment rather than assisting illegal entry.

And in March this year three French and British volunteers with charity Roya Citoyenne were arrested for distributing food to migrants. The 68-page IRR report chronicles a culture of criminalisation in which volunteers for charities and aid groups, attempting to fill the gaps in state provision, are targeted for providing food, shelter and clean water to migrants in informal encampments or on streets. The EU’s border force, Frontex, has accused aid groups including Médecins Sans Frontières of co-operating with migrant traffickers in the Mediterranean. The report criticises senior Frontex officials for “attempts to bully and delegitimise” NGO search and rescue missions in the Mediterranean by accusing aid groups of working with smugglers and encouraging trafficking. The IRR’s vice-chair, Frances Webber, said: “Across the continent, criminal laws designed to target organised smuggling gangs and profiteers are distorted and stretched to fit an anti-refugee, anti-humanitarian agenda, and in the process criminalise decency itself.”

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Disposable income down by 50%. Taxes and social security up 96.8%. The Troika is taxing Greece to death. On purpose. It’ll be a tourist destination only. And a refugee camp.

Greece’s Middle Incomes Go Under The Knife (K.)

The disposable income of Greece’s average earners has been slashed by more than 50% due to overtaxation in recent years, according to the latest data examined by Kathimerini, which also paints a grim picture for the coming years. What’s more, the reduction of the income tax threshold is expected to further impact the disposable income of households. Brussels expects Greece’s primary surplus to beat its target of 3.5% of GDP again next year, rising to 3.9%, and then to 3.7% in 2019. However, the primary surpluses Greece has posted in the last two years are largely due to exorbitant taxes rather the result of growth. Moreover, while the European Commission’s statistics point to a disproportionate increase in taxation in Greece, at a time when the economy was shrinking, the country’s industrialists and political opposition say overtaxation has led to more tax evasion and the failure of the tax system.

Those hardest hit have been freelance professionals, who since 2009 have been subjected to unprecedented raids by the tax office, and more recently by social insurance contribution hikes, resulting in the gradual exhaustion of their income. And high taxes, including property taxes, are the reason why both freelancers and self-employed professionals submitted incomes last year that were 20% lower than their actual earnings. A telling example of overtaxation concerns freelance professionals who own a car and an apartment and earn 50,000 euros a year: In 2009 they had to pay 16,333 euros of their annual income to the tax office and their social security fund, leaving them with a net income of 33,667 euros. Five years later, their clear income dropped by a further 4,344 euros to 29,323.

The situation today is even more dire as the same self-employed professional making 50,000 euros must pay 32,151 euros in taxes and contributions, leaving them with a disposable income of 17,849. Taxes and social security contributions have rocketed by 96.8% since 2009, while compared to 2014 they have risen by 55.5%.

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Mar 222015
 March 22, 2015  Posted by at 12:59 am Finance Tagged with: , , , , , , ,  10 Responses »
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Harris&Ewing Kron Prinz Wilhelm, German ship, interned in US in tow 1916

German magazine Der Spiegel digs deep(er) into the ‘Greece question’ this weekend, and does so with a few noteworthy reports. First, its German paper issue has Angela Merkel on the cover, inserted on a 1940’s photograph that shows Nazi commanders against the backdrop of the Acropolis in Athens. The headline is ‘The German Supremacy: How Europeans see (the) Germans’. The editorial staff has already come under a lot of fire for the cover, and I’ve seen little that could be labeled a valid defense for further antagonizing both Germans AND Greeks (and other Europeans) this way. Oh, and it’s also complete nonsense, nobody sees modern day Germans this way. It’s just that their government after 70 years is still skirting its obligations towards the victims. That’s what people, the Greeks in particular, don’t like.

Second: Spiegel’s German online edition has a sorry that claims Greek paper To Vima will come with revelations on Sunday accusing Georgios Katrougalos, Syriza’s deputy minister for Policy Reform and Public Service (I’m translating on the fly) of corruption in the case of the reinstallment of public workers that had been fired under the Samaras government under pressure from the Troika.

Allegedly, Katrougalos’ law firm (in which he has had no active role since becoming a member of the European parliament last year) has a contract with these workers that will pay it 12% of whatever they receive in back pay. Predictably, the opposition has called for Katrougalos’ firing, but Tsipras has said he talked to him and is satisfied with the explanation he was given..

It smells a bit like something Bild Zeitung (Germany’s yellow rag) would write, but there you are. Which makes the following perhaps somewhat surprising. Because:

Third: Spiegel English online edition has a long article on a report just out by a special Greek commission, instated by former governments, on the German war reparations that Tsipras has repeatedly talked about, and that German FinMin Schäuble has famously high handedly tried to sweep off the table. That may not be so easy anymore now. There are already increasingly voices in Germany itself that want Berlin to change its approach to the matter, and the report will only make that call louder. Let’s see if I can get this properly summarized:

Nazi Extortion: Study Sheds New Light on Forced Greek Loans

Last week in Greek parliament, Greek Prime Minister Alexis Tsipras demanded German reparations payments, indirectly linking them to the current situation in Greece. “After the reunification of Germany in 1990, the legal and political conditions were created for this issue to be solved,” Tsipras said. “But since then, German governments chose silence, legal tricks and delay. And I wonder, because there is a lot of talk at the European level these days about moral issues: Is this stance moral?”

[..] there are many arguments to support the Greek view. SPIEGEL itself reported in February that former Chancellor Helmut Kohl used tricks in 1990 in order to avoid having to pay reparations.

A study conducted by the Greek Finance Ministry, commissioned way back in 2012 by a previous government, has now been completed and contains new facts. The 194-page document has been obtained by SPIEGEL. The central question in the report is that of forced loans the Nazi occupiers extorted from the Greek central bank beginning in 1941.

Should requests for repayment of those loans be classified as reparation demands – demands that may have been forfeited with the Two-Plus-Four Treaty of 1990? Or is it a genuine loan that must be paid back? The expert commission analyzed contracts and agreements from the time of the occupation as well as receipts, remittance slips and bank statements.

Note: the Two-Plus-Four Treaty of 1990 (aka Treaty on the Final Settlement with Respect to Germany) was the result of negotiations about the reunification of the two Germany’s. It was signed by both, and by France, Britain, Russia and the US, the four nations who held former German territory at the end of WWII.

It’s noteworthy that Der Spiegel says that Greek demands for reparations ‘may have been’ forfeited with the treaty (something Germany claims), while Tsipras insists on the exact opposite: that the treaty created the legal and political conditions for the reparations issue to finally be resolved. As we will see, many experts lean towards Tsipras’ interpretation. Greece never signed, and nobody else had the right to sign in its name, that’s the crux. But there’s more:

They found that the forced loans do not fit into the category of classical war reparations. The commission calculated the outstanding German “debt” to the Greek central bank and came to a total sum of $12.8 billion as of December 2014, which would amount to about €11 billion.

As such, at issue between Germany and Greece is no longer just the question as to whether the 115 million deutsche marks paid to the Greek government from 1961 onwards for its peoples’ suffering during the occupation sufficed as legal compensation for the massacres like those in the villages of Distomo and Kalavrita. Now the key issue is whether the successor to the German Reich, the Federal Republic of Germany, is responsible for paying back loans extorted by the Nazi occupiers. There’s some evidence to indicate that this may be the case.

It’s a tad strange that the magazine apparently jumps from that ‘may have been forfeited’ interpretation of the treaty to what amounts to a fait accompli, by saying the ‘key issue’ now is the forced loans, not the reparations. I would think it’s very much both. But let’s follow their thread:

In terms of the amount of the loan debt, the Greek auditors have come to almost the same findings as those of the Nazis’ bookkeepers shortly before the end of the war. Hitler’s auditors estimated 26 days before the war’s end that the “outstanding debt” the Reich owed to Greece at 476 million Reichsmarks.

First thing that springs to mind is: say what you will about Germans, but they’re fine bookkeepers!

Auditors in Athens calculated an “open credit line” for the same period of time of around $213 million. They assumed a dollar exchange rate to the Reichsmark of 2:1 and applied an interest escalation clause accepted by the German occupiers that would result in a value of more than €11 billion today.

This outstanding debt has to be paid back “with no ifs or buts,” says German historian Hagen Fleischer in Athens, who knows the relevant files better than anyone else. Even before the new report, he located numerous documents that prove without any doubt, he believes, the character of forced loans. Nazi officials noted on March 20, 1944, for example, that the “Reich’s debt” to Athens had totaled 1,068 billion drachmas as of December 31 of the previous year.

“Forced loans as war debt pervade all the German files,” says Fleischer, who is a professor of modern history at the University of Athens. He has lived in Athens since 1977. He says that files from postwar German authorities about questions of war debt “shocked” him far more than the war documents on atrocities and suffering.

In them, he says German diplomats use the vocabulary of the National Socialists to discuss reparations issues, speaking of a “final solution for so-called war crimes problems,” or stating that it was high time for a “liquidation of memory.” He says it was in this spirit that compensation payments were also constantly refused.

Those are pretty damning words. So far just from one man, granted, but again there’s more:

When work on the study first began in early 2012, the cabinet of independent Prime Minister Loukas Papedemos still governed in Athens. A former vice president of the ECB, Papedemos formed a six-month transition government after Georgios Papandreou resigned. In April 2014, the successor government of conservative Prime Minister Antonis Samaras decided to continue work on the study and appointed Panagiotis Karakousis to lead the team of experts. The longtime general director of the Finance Ministry was considered to be politically unobjectionable.

Karakousis spent five months reading 50,000 pages of original documents from the central bank’s archives. It wasn’t easy reading. The study calculates right down to the gram the amount of gold plundered from private households, especially those of Greek Jews: 7,358.0014 kilograms of pure gold with an equivalent value today of around €235 million. It also notes also how German troops, as they pulled out, quickly took along “the entire cash reserves from branch offices and regional branches” of the central bank: Exactly 634,962,691,995,162 drachmas in notes and coins, which would total about €40 million today.

Above all, the study, with some reservations, provides clarity about the forced loans. “No reasonable person can now doubt that these loans existed and that the repayment remains open,” says Karakousis.

This history of the loans began in April 1941, after the German troops rushed to assist their Italian allies and occupied Greece. In order to provide their troops with provisions, the German occupiers demanded reimbursement for their expenses, the so-called occupation costs. It’s a cynical requirement, but one that became standard practice after the 1907 Hague Convention.

Out of the ordinary, though, was the Wehrmacht requirement that the Greeks finance the provision of its troops on other fronts – in the Balkans, in Russia or in North Africa – despite Hague Convention rules forbidding such a practice. Initially, the German occupiers demanded 25 million Reichsmarks per month from the government in Athens, around 1.5 billion drachmas. But the amount they actually took was considerably higher. The expert commission determined that payments made by the Greek central bank between August and December 1941 totaled 12 billion rather than 7 billion drachmas.

As they say: before you know it, we’re talking about real money. And I see no reason to doubt Karakousis’ assertion that ‘repayment remains open’. Not only was German conduct reprehensible during the war, it remained so after. So it shouldn’t really come as surprise that Tsipras has more than once mentioned the 1953 London Agreement on German External Debts, in which Germany was relieved from much of the claims held against it. Tsipras wants Berlin to do the same for Greece now. A potential weakness is that Greece was signatory to that agreement. Still, the loans were certainly not part of it, only ‘war damage’ was included.

With their economy laid to waste, the Greeks soon began pushing for reductions. At a conference in Rome, the Germans and Italians decided on March 14, 1942 to halve their occupation costs to 750 million drachmas each. But the study claims that Hitler’s deputies demanded “unlimited sums in the form of loans.” Whatever the Germans collected over and above the 750 million would be “credited to the Greek government,” a German official noted in 1942. The sums of the forced loans were up to 10 times as high as the occupation costs. During the first half of 1942, they totaled 43.4 billion drachmas, whereas only 4.5 billion for the provision of troops was due.

A number of installment payments, which Athens began pressing for in March 1943, serve to verify the nature of the loans. Historian Fleischer also found records relating to around two dozen payment installments. For example, the payment office of the Special Operations Southeast was instructed on October 6, 1944 to pay, inflation adjusted, an incredible sum of 300 billion drachma to the Greek government and to book it as “repayment.”

In Fleischer’s opinion, the report makes unequivocally clear that the Greek demands do not relate to reparations for wartime injustices that could serve as a precedent for other countries. “One can negotiate reparations politically,” Fleischer says. “Debts have to be paid back – even between friends.”

Postwar Greek governments sought repayment early on. The German ambassador confirmed on October 15, 1966, for example, that the Greeks had already come knocking “over an alleged claim.” On November 10, 1995, then Prime Minister Andreas Papandreou proposed the opening of talks aimed at a settlement of the “German debts to Greece.” He proposed that “every category of these claims would be examined separately.” Papandreous’ effort ultimately didn’t lead anywhere.

Ergo: for a period of thirty years, the Greeks tried, but to no avail. That’s a pretty ugly record. It’s now another 20 years later, and nothing has changed. All in all, the Greeks have been stonewalled for 70 years.

What should become of this new study, the contents of which had remained secret before now? [..] the question also remains whether the surviving relatives of the victims of Distomo will ever be provided with justice – and whether there are similar cases in other countries.

German governments’ rude behavior may well stem, among other things, from that last point: that if any of the Greek claims are recognized, other countries may come knocking too.

German lawyer Joachim Lau, whose law firm is based in Florence, Italy, represents the interests of village residents of Distomo even today. Lau, born in Stuttgart, a white-haired man of almost 70, is fighting for compensation in the name of the Greek and Italian victims of the Nazis. “I am disappointed by the manner in which Germany is dealing with this question,” he says. He says it’s not just an issue of financial compensation. More than anything, it is one of justice.

In February, Lau warned German President Joachim Gauck in an open letter against propagating the “violation of international law” with careless statements about the reparations issue. In his view, the legal situation is clear: Greek and Italian citizens and their relatives affected by “shootings, massacres by the Wehrmacht, by deportations or forced labor illegal under international law” have the right to individual claims.

This perhaps clarifies the definition of ‘war damage’, the term used in the 1954 London agreement. In Lau’s interpretation, it does not include, let’s say, ‘personal suffering’.

For the past decade, Lau has been pursuing the claims of the Distomo victims in Italy. The Court of Cassation in Rome affirmed in 2008 that the claims were legitimate and that he could pursue the case. Earlier, the lawyer had already succeeded in securing Villa Vigoni, a palatial estate on the shore of Lake Como owned by Germany – and used by a private German association focused on promoting German-Italian relations – as collateral for the suit. In 2009, Lau succeeded in having €51 million in claims made by Deutsche Bahn against Italian state railway Trenitalia seized. On Tuesday, the high court in Rome is expected to rule on the lifting of the enforcement order.

Note: there could be a legal precedent here that that can serve as a ‘conduit’ to allow Greece to seize German property in its country.

Following a ruling made by Italy’s Constitutional Court in October 2014, private suits in Italy against Germany have been possible again. One of the justices who issued the ruling is the current president of Italy, Sergio Mattarella. It remains unclear whether this ruling will unleash “a wave of new proceedings” in Italy, says Lau, who currently represents 150 cases, including various class-action lawsuits.

The bones of victims of the Nazi killings in Distomo feature as part of the village’s memorial to the massacre.

Everything connects in the mountain village of Distoma – the present and past, guilt and anger, the Greek demands on Germany today and past calls for reparations. Efrosyni Perganda sits in the well-heated living room of her home. The diminutive woman, 91 years of age, has alert eyes and wears a black dress. She survived the massacre perpetrated by the Germans at Distomo and she’s one of the few witnesses still alive in the village. When the SS company undertook a so-called act of atonement in Distomo following a fight with Greek partisans, the soldiers also captured her husband. Efrosyni Perganda stood by with her baby as they took him. She never saw him again.

As the Germans began to rampage, she hid behind the bathroom door and later behind the living room door of the house in which she still lives today. She held her baby tightly against her chest. “I forgive my husband’s murderers,” she says. Loukas Zisis, the deputy mayor, silently leaves the house as the woman finishes telling her story. He needs a break and heads over to the tavern, where he orders a glass of wine.

“I admire Germany: Marx, Engels, Nietzsche,” he says. “The prosperity. The degree to which society is organized. But here in the village, we aren’t finding peace because the German state isn’t settling its debt.”Zisis admires Germany, but the country remains incomprehensible to him. “We haven’t even heard a single apology so far,” he says once again. “That has to do with Germany’s position in Europe.” This is something that he just doesn’t understand, he says.

German occupation troops in the ransacked Greek village of Distomo on June 10, 1944, shortly after 218 local residents were executed as part of Nazi reprisals.

I hope – and I think – that Germany will pay up. It seems to me to be the only way to save the European Union it has made its economy so dependent on. I don’t see the war reparations go away anymore. So either Berlin pays what legal experts determine should be paid, or it risks becoming a pariah in its own neighborhood.

That the Germans in the 1950s and 1960s, at home and in schools, chose not to tell their children anything about their crimes cannot serve as an excuse to silence the children of their victims. Germany will need to eat a lot of humble pie with its beer.