Berlin owes debt of trillions of Euros.

Discussion in 'Economics' started by Grandluxe, Jul 19, 2012.

  1. 540-year-old debt note from Berlin to Mittenwalde appears authentic, but German capital has only paid a guilder so far. With interest and inflation, the 540-year-old debt of 11,200 guilders is worth trillions of euros today.

    By Sophie Duvernoy, Reuters / July 18, 2012

    The sleepy hamlet of Mittenwalde in eastern Germany could become one of the richest towns in the world if Berlin were to repay it an outstanding debt that dates back to 1562.

    A certificate of debt, found in a regional archive, attests that Mittenwalde lent Berlin 400 guilders on May 28 1562, to be repaid with six percent interest per year.

    According to Radio Berlin Brandenburg (RBB), the debt would amount to 11,200 guilders today, which is roughly equivalent to 112 million euros ($136.79 million).

    Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB's estimates.

    Town historian Vera Schmidt found the centuries-old debt slip in the archive, where it had been filed in 1963. Though the seal is missing from the document, Schmidt told Reuters that she was certain the slip was still valid.

    "In 1893 there was a debate in which the document was examined and the writing was determined to be authentic," Schmidt said.

    Schmidt and Mittenwalde's Mayor Uwe Pfeiffer have tried to ask Berlin for their money back. Such requests have been made every 50 years or so since 1820 but always to no avail.

    Reclaiming the debt would bring significant riches to Mittenwalde, a seat of power in the middle ages, which now has a population of just 8,800. Red brick fragments of medieval fortifications still dot the leafy town centre.

    The town's Romanesque church was once the provost seat for Paul Gerhardt, one of Germany's most prolific hymn writers. Gerhardt, who lived there briefly in the 17th century, is the only noted Mittenwalde resident to date.

    Schmidt and Pfeiffer met with Berlin's finance senator Ulrich Nussbaum, who ceremonially handed them a historical guilder from 1539. The guilder was put in a temporary display at the Mittenwalde museum.

    "This case shows that debts always catch up with you, no matter how old they are," Nussbaum told the Berliner Zeitung paper.

    The debt-laden German capital would have difficulty meeting Mittenwalde's demands anyway. According to a report released by the senate finance administration in June 2012, Berlin is already close to 63 million euros in the red
  2. piezoe


    adjusted for inflation? I never heard of a 16th century debt being adjusted up for inflation???!!! Too bad Mittenwalde did not think of inflation when they made that loan. Maybe they will ask for "do overs." :D
  3. That is about it. There is an old German saying that "Alles bist ..." It is funny for thier pride and arrogance how they are the first to forgive and forget when things get unmanageable. The new center is Asia and the financial sins can no longer be covered with policy the numbers are the numbers. China is waiting to break thier manufacturing base and assimilate thier culture. Still waiting for a Wal Mart right in the middle of downtown Berlin right next to a Movenpick.
  4. gulkhan