Berlin's 540-Year-Old Debt

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Apparently really old debts, . . . extremely old debts, . . . ridiculously old pre-Shakespearean debts can be “laughed off” and do not need to be paid.  Our clients would be thrilled if the IRS treated their tax debt this way.

In 1562 the city of Berlin borrowed 400 gilders from a little village called Mittenwalde and never repaid the debt.  Here we are 540 years later and the debt has grown into the trillions when accounting for interest and inflation.

Officials from Berlin recently met with officials from Mittenwalde and presented them with a symbolic 1539 gilder.  I think this was Berlin’s way of saying, “We’re never going to pay you.”  Maybe if they hadn’t lost the loan documentation the debt would have been repaid in a timely manner.  Also, checking in with Berlin only every 50 years doesn’t exactly adhere to the squeeky-wheel-gets-the-grease theory.



Greece on the Verge of Bankruptcy

In a conference call earlier today, Greek finance minister, Evangelos Venizelos, spoke with the “troika” — the Commission, the European Central Bank and the International Monetary Fund — with the hopes of convincing them that Greece will be able to pay its debts and should continue to receive financial assistance. The phone call didn’t go as well as Greece had hoped it would. But then again, the door has not completely closed for them either.  A follow-up call is scheduled for tomorrow.

It is still unclear whether or not the country is going to get another installment from its current assistance package. Without it, Greece is expected to go bankrupt by mid October. Stocks took quite a hit around the world today as a result of this news.