War memories surface in Greece as German auto makers feel anti-austerity blow

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Since 2010, I have covered several mass anti-austerity demonstrations in Athens, some of which turned violent. In each of them, there was a palpable and disturbing anti-German subplot. Flags with swastikas were burned, as were placards depicting German chancellor Angela Merkel clad in a Nazi uniform. I remember the crowd in Syntagma Square, facing the parliament building, erupting in a cheer when a very old man with a shock white hair arrived. It was Manilos Glezos, the Second World War resistance hero; he had risked his life by climbing the Acropolis in 1941 to tear down the German swastika flag.

Given the hostility towards the German-inspired austerity programs that have kept Greece in deep recession for five years, you could imagine that German products have not been big sellers in the country. Indeed, German cars have not been rolling out the showrooms and the economic collapse can't take all the blame (overall car sales fell by almost half in the peak crisis years). The German auto makers' biggest problem in Greece, it appears, is anti-German sentiment that goes all the way back to the war. That sentiment flared during the austerity protests.

A fresh research paper by Vasiliki Fouka, a PhD candidate at Barcelona's Universitat Pompeu Fabra and Hans-Joachim Voth, an economics historian at the same school, found that tensions between Germany and Greece during the recession "directly translated into losses of market share for German car producers in Greece – especially in areas where German armed forces committed atrocities during World War II."

The paper, published this week on the Voxeu.org economists' site, focused on the most popular segment – the middle market for cars, whose brands include Germany's Volkswagen, Italy's Fiat and Japan's Toyota. In the post-2009 months when there was no conflict, that is, no mass demonstrations, strikes or riots, the German car makers gained 3.1-per-cent market share (measured over a year). In the months of conflict, they lost 0.1 per cent market share. That's a fairly big reversal.

But there's more to the story. The individual markets where the German car makers fared worse were those where Greeks were massacred in the war. In the post-2009 conflict months, the share for the German brands in the many "martyred towns," as they are known, fell 3.4 percentage points. "We find that prefectures that saw German massacres in 1941-44 did not only buy fewer German cars – they also bought more cars from other manufacturers," the authors said.

Six decades later, memories of the war are still close to the surface in Greek society. Buying cars has been an especially emotional experience in Greece in the austerity years.