1953 London Debt Agreement

Discussion in 'Postwar' started by CL1, Jan 29, 2015.

  1. CL1

    CL1 116th LAA and 92nd (Loyals) LAA,Royal Artillery Patron

    The 1953 London Debt Agreement settled Germany's debts from the period between the two world wars, and allowed the country to re-establish its role in international capital markets. The Agreement wrote-down the overall debt by about 50 percent and gave the debtors a much longer period to repay. One interesting clause in the Agreement allowed Germany to postpone some payments until such time as re-unification. The Agreement reflects a subtle and responsible understanding of the problems associated with the reparations and debt crises of the 1920s and 1930s, as well as fears about the moral hazard problems that would arise with making any part of the Agreement contingent on events Germany could influence. Recent advocates of third-world debt relief have held up the London Debt Agreement of 1953 as a precedent for debt relief for poor countries today. That argument reflects a misunderstanding of the historical circumstances of the early 1950s, as well as the economic principles reflected in the Agreement.https://ideas.repec.org/p/egc/wpaper/880.html


    http://en.wikipedia.org/wiki/Agreement_on_German_External_Debts


    http://library.fes.de/pdf-files/iez/10137.pdf

    http://www.econ.yale.edu/growth_pdf/cdp880.pdf
     
  2. Drayton

    Drayton Senior Member

    I am sceptical as to whether the London Debt Agreement could have included phraseology amounting to "until such time as reunification". Although by 1953 Germany had a de facto division which might eventually be unified, the division did not establish de jure status until 1955, with the establishment of two separate sovereign states, the Federal Republic and the Democratic Republic.

    International agreements always use de jure language so I seriously question whether there was any reference to "reunification" - which at that time, in the minds of many Germans, meant not only reuniting west and east, but incorporating as well the territory forced by the Allies in 1945 to be ceded to Poland and remaining ceded to this day.
     
  3. Bernard85

    Bernard85 WW2 Veteran WW2 Veteran

    good day cl1.m.yesterday 09:21pm.re:1953 london debt agreement.it seems if they loose the war they get all kinds of consession.we paid to kick start there industry.i wonder what they would have done if we had lost the war.(not realy)regards bernard85
     

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