Germany's Perverse Devotion to Austerity
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May 14 (Bloomberg) -- Next summer will mark the 100thanniversary of the chain of diplomatic missteps that led toWorld War I. In light of recent economic blunders, this alsoshould be the opportunity to revisit the war’s aftermath, whenmiscalculations seeded the conditions that led to World War II.
In 1919, at the Versailles Peace Conference, France and theU.K. resolved to impose draconian “reparation” payments on adefeated Germany. The idea was both to compensate the U.K. andFrance for the horrific costs of the war, and to ensure thatGermany could never again threaten Europe.