German town that told Berlin: You owe us trillions for long-forgotten loan made in 1562
By Allan Hall In Berlin
PUBLISHED: 18:29, 28 July 2012 | UPDATED: 12:00, 29 July 2012
The Mauerturm and Berliner Tor in Mittenwalde, which is calling in a centuries old debt
A German town says it should be ‘the richest in the world’ after telling Berlin to repay a loan made 450 years ago.
On May 8, 1562, the people of Mittenwalde lent 400 guilders – the equivalent of £88 million today – to Berlin with the expectation it would be repaid within five years at an interest rate of six per cent a year.
Add in 450 years of compound interest, and the town’s 8,000 residents are rubbing their hands together in glee at the thought of a repayment of trillions of euros.
The debt might have been forgotten for ever had local archivist Vera Schmidt not uncovered the loan agreement in some dusty files at the town hall.
With it was a note from 1893 detailing discussions then about getting Berlin to hand over the money it owed.
The original paperwork bears the crest of Berlin-Cölln – as the German capital was then called – and the signature of the spendthrift Elector of the city, Joachim II, who needed the money to settle a tax bill.
‘We could be the richest town in the world,’ said Mittenwalde’s mayor Uwe Pfeiffer, who recently made the 20-mile journey to Berlin to demand the money back. ‘I had discussions with Berlin’s finance senator, Ullrich Nussbaum, but he wasn’t very forthcoming.’
The city’s reluctance to take the claim seriously comes as little surprise.
The German capital, which has had to bear huge costs following Germany’s reunification, has debts of about £50 billion and couldn’t possibly countenance a claim that would dwarf the entire eurozone bailout fund.
Mr Pfeiffer added: ‘Berlin made it plain it will not pay a single euro, and I suppose I did not expect anything else.’
Then, with a hint of pride, he added: ‘We do not have to rely on them. In contrast to Berlin, Mittenwalde is debt-free.’
Mrs Schmidt added: ‘We are not planning any legal action but it is nice to dream about such a sum. We would have spent it on a new kindergarten and nursing home.’