On German Economics Between the Wars
You wrote, "It should be said here that they don't think that inflation produces Nazis, no. Because the great German inflation was actually in 1921 to 24 and that didn't bring Adolf Hitler to power at all."
I'm not an economist, but I do remember being told [by a history teacher, which of course does not make it true] that one of the primary factors in the Germany economic turmoil in the early 1920s was in large part due to the somewhat unreasonable restitution burden placed on Germany by the Allies at the end of the First World War. I'm not sufficiently familiar with the economic trends of the time, but I believe that whilst the reparations might have looked like a firm and somewhat punitive response in fair economic conditions, they became untenable as the pan-European situation worsened as time progressed into the early 20s.
Further, whilst I would be very happy for someone to provide more details and correct me if I am wrong, I also understand that one of the reasons for the present Greek financial crisis could easily be described as Germany's own fault. Specifically, this is the fact that, at the time that Greece joined the Euro as one of the "first trenche" of countries to do so, they had in fact failed to meet the criteria for economic convergence as set down by the Bundesbank [um, sorry, ECB]. Because Germany [um, sorry, the Bundesbank... no, wait, the ECB] wanted the Euro to be successful, they turned a blind eye to the massive hole in Greek tax receipts. [The same was true, to a greater or lesser extent, to Portugal, Italy and Spain]. As a result, the Euro accepted into their midst not one but four economies that each carried significant fiscal risk. As if that wasn't enough, what then followed [to varying degrees] were economies [and Britain under Gordon Brown's Chancellorship was the same] that spent far more than they earned, and borrowed to cover the shortfall, relishing the availability of cheap money thanks to falling interest rates.
Except of course the credit has to run out at some point, but the issue for the Eurozone was that the wreck happened at the same time for many countries around the world, leaving them no ability to work around the problem.
But the "root causes" of the Greek situation can be summarised with two simple observations:-
1. At the time that Greece was admitted to the Eurozone it failed to meet the convergence criteria and therefore was nothing more than a problem stored up for the future;
2. At the time that Greece was admitted, the oversight of the convergence process was handled by German banking regulators [since of course the ECB is basically the Bundesbank with a new logo over the door, and run entirely along German banking lines].
This last point is relevant given that Germany runs her economy in a way that is in harmony with ECB policy; Greece does not. Unless or until Greece is willing to run her national economy like Germany, this friction/tension/trouble will remain in the Eurozone. It is a philosophical challenge as much as an economic one.
Oh, one more thought...
If the Eurozone and the ECB doesn't get their act together and sort this out pronto, then other EU economies will start to fall perilously close to the trouble that Greece are in now. And just wait for what *could* happen if France gets into difficulty. Not because their economy is weak: it isn't. But because such a *huge* percentage of France's economy is reliant entirely upon the state, whilst Germany has a smaller state machine and more activity in the private sector. Trouble in France could potentially see the Euro fall apart completely...
p.s. Not an economist, or a historian, don't have a clue what I'm talking about. ;)