Will the Principles of the 1953 London Debt Conference Be Applied?

The new Greek government of Alexis Tsipras came into power committed to rejecting the murderous austerity conditions of the Troika, and to pursuing an approach explicitly identified with the 60% writedown of German debt in 1953, the so-called London Debt Conference. Whether it will pursue this aim—not to mention, achieve it—has come to the top of the agenda, not just for Greece, but for bankrupt Europe as a whole.

What is clear is that the Greek debt is fraudulent and unpayable—and that no amount of financial warfare against the country, such as was applied Jan. 28, will change that. Financial warfare is more likely to bring on a financial explosion.

In a major article in the Daily Telegraph Thursday, international business editor Ambrose Evans-Pritchard takes up this issue in dramatic terms. “Investors have woken up to Greece’s nuclear risk,” reads the headline. Pritchard then proceed to quote the radical rejection of the debt burden by the incoming government—the Finance Minister calling the austerity policy “fiscal waterboarding,” and the deputy Finance Minister authoring a book called “The Rape of Greece”—and to agree! The EU-IMF-ECB Troika forced the debt and “scorched earth austerity” on Greece, he writes— and the debt can’t be paid. Their demand for a “European Conference” for debt restructuring of all the southern European countries is “right.”

Greek Finance Minister Yanis Varoufakis showed a determined fighting spirit in an interview with El Mundo, one of Spain’s leading newspapers, on Jan. 21. What is happening in Greece is savage, he said,

El Mundo asked: Do you really believe that Spain is going to end up like Greece?

On the whole ECB game: the ECB knows we don’t have the money to pay for their mistakes, so they are forcing us to take loans from the Germans, the Spaniards, and from the ECB itself, to give it to the ECB.

Whether this attitude will continue, may well depend upon the amount of support the Greeks get. Most crucial is support from the United States.

In that regard, it is interesting to note that Thursday’s column by Washington Post regular Harold Meyerson, is devoted to supporting the 1953 London debt conference. Germans should remember that part of their history, he argues, in relation to Europe. Indeed, Americans should remember their history of Hamiltonian bankruptcy reorganization as well—before bankrupt Wall Street blows up the world.

For EIR‘s proposal on how the 1953 London debt conference precedent should be applied today, see “A Greek Proposal: Convene a European Debt Conference for 2015,” by Dean Andromidas and Paul Gallagher, in EIR‘s January 23 edition.