The world has a short memory and a selective one. Things are never as straightforward as they seem. Today Greece is treated as an economic pariah that cannot control its borrowing and to whom no sane person would lend money. Germany is treated as paragon of economic virtue in which we should repose our confidence.
It seems so perfectly normal but is actually quite odd from the historical perspective of the past one hundred years.
In 1918 Germany lost the Second World War and was forced to pay huge reparations to the allies. It did not pay them. Eventually those reparations and other international debt of Germany were written off. In 1945 German debt was written off and the end of the Second World War. In effect in the past one hundred years Germany defaulted on its international obligations twice.
In April 1941 Germany invaded Greece and captured it by the end of May. The Germans took the Greek Treasury’s gold (as damages for the cost of the invasion) – today worth many billions of Euros – and have never repaid it.
Of course the Germans will not want to repay the gold because to do so would create a historical precedent for Germany and no doubt all the other invaded nations would be lining up for repayment of what was confiscated from them.
The Greeks, while by no means faultless, are not financially reckless as the world claims. Rather they have to an extent been victims. When some nations can borrow Euros at 2% interest and relend those Euros to Greece at 5%, with a guarantee that the Greeks will pay by the very institution that made the loan at 2%, then something is seriously systemically wrong with the world’s financial system.
Of course nations should pay their debts or else if they cannot pay simply default. But we should not claim that those nations that are economically successful are more virtuous than those that are economically unsuccessful, any more than we should regard a wealthy man as more virtuous than a poor one.