Monday 23 April 2018

Brendan Keenan: Ditch the ideology for reality

Trying to make a €15bn correction in four years is economically and socially dangerous

AT THE beginning of the month, Germany paid the last of the reparations imposed on it by Britain and France -- mainly France -- after the First World War.

The news item to that effect came as a bit of a surprise. Somehow, one had thought the payments would have been forgotten after 1945. They were, after all, widely regarded as one of the causes of the second war. The legendary economist John Maynard Keynes warned of the dangers of the huge burden being placed on Germany in a famous book, The Economic Consequences of the Peace, but politics triumphed over economics.

Politics usually do. Nowhere more so than in the Europe successfully built out of the ruins of that second war. But there seems a bit more to it than that. Strange as it may seem, the Keynesian economics which would have been of so much benefit to Germany in 1918 never seemed to have gained much credence in Germany itself.

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