The Greek-French defense agreement and… Keynes – What the German press writes

Welt Online comments on the Greece-France defense agreement. “Greece’s debt amounts to 210% of GDP. Only Japan and Sudan have higher public debt-to-GDP ratios. The Maastricht criteria in the EU provide for a debt ceiling of 60%, which Germany would have reached in 2020 had it not been for the coronavirus crisis.

“Did the Greeks have nothing more important to do with their money, than to give it to admirals for new toys and to save the prestige of the French president?”, The comment asks.

“No. Greece’s debts are long-term, most will become due in twenty years. In the meantime, cheap interest rates mean that Greece can refinance its debts at a low cost. Investors are literally grabbing Greek bonds, Bloomberg reported in June.

Even the bonds that had been labeled “trash” were bought with desire. Thanks to high demand, Greece will pay lower interest rates on its loans than Italy and not much higher than Germany. In addition, the economy is booming. The government can still count on debt service revenue – and on buying “nice to have” frigates and fighter jets.

Against the background of Greek carefreeness, then, some discussions in Germany seem foreign – such as the discussions about the salvation of the soul in a Protestant parish. In the long run, high debts can seem problematic. But, as the great economist John Maynard Keynes said, “in the long run we will all die.”