Schroeder is really running back towards the center, isn't he? He is learning that hanging around with the Greens, means waking up with fleas. He is clearly positioning himself as the internationalist alternative to an inward looking Christian Democrat, who was reticent about supporting America in Iraq. Merkel, the CDU chief, cuts no figure internationally and is going to have to present some means of drawing Germany and America closer together to battle Schroeder's initiative. It is also a bit of a trap. If Merkel asks about the impact of this move on German depositers and taxpayers, then she is the one breaking the Atlantic Alliance and supporting Saddam's dictatorship. I didn't think Schroeder was this clever.

One can only imagine the gnashing of teeth at SPD headquarters over this one.

This is similar to the airplane pilots taking a massive paycut recently--some fraction of something is better than holding out for what you're currently owed, and ending up with nothing.

Actually not, had the Germans played hardball on this, it would have made the problem of international borrowing virtually insurmountable for the new Iraqi regime. Sure, the Germans might have had to sit around and wait to be repaid on their existing loans, but the Iraqis would have been granted virtually no new credit.

You can't foreclose on a country. You can't take over Argentina and kick out the inhabitants and sell everything to other people like a home foreclosure. That is why default is such a huge step, because if you default, nobody gives you a second chance.

Bart: Using the argument of "odious debt" and with the US playing hardball behind closed doors, Germany would have folded like a cheap suit. Oh wait, that's what they did.

They'd obviously be judged no matter what they did. Damned if they do, damned...

I hope you're right, because there really should be a stated policy of debt forgiveness for countries which throw off odious regimes. If North Korea or Iran can't get money, because if their respective odious regimes get tossed the banks don't get repaid, then it shortens their lifelines and hastens their disintegration.

When you get rid of a Kim, a Castro, a Khomeini, a Saddam,a Mugabe, you should get a fresh start and the bankers who were the enablers of the criminals should take the hit and their banks should take the hit and the depositers, shareholders and regulators should be all over the clowns who lend to the Castros, Kims and Saddams of the world, like white on rice, like ugly on Helen Thomas, etc.

Bart: not while China, Russia and France are in a race to see who can sell the most arms, no questions asked.

Why not just let Russia come and collect back its old tanks, RPGs and AK47s?

And Germany could take back its aluminum tubes and brand new chemical lab vans. The rest can be collected from Syria.

For France, well, why not just return the weapons France sold Saddam in the care of some Abu Ghraib inhabitants. You know, to give them back what they are owed, personally.