Reprisals Remembered: German-Greek Conflict and Car Sales during the Euro Crisis

by Vicky Fouka

Universitat Pompeu Fabra, Department of Economics and Business, Barcelona, Spain. [email protected]

and

Hans-Joachim Voth

CREI and Universitat Pompeu Fabra, Barcelona, Spain. [email protected]

During the Greek debt crisis after 2010, the German government insisted on harsh austerity measures. This led to a rapid cooling of relations between the Greek
and German governments. We compile a new index of public acrimony between
Germany and Greece based on newspaper reports and internet search terms. This
information is combined with historical maps on German war crimes during the
occupation between 1941 and 1944. During months of open conflict between German
and Greek politicians, German car sales fell markedly more than those of cars from
other countries. This was especially true in areas aected by German reprisals during
WorldWar II: areas where German troops committed massacres and destroyed entire
villages curtailed their purchases of German cars to a greater extent during con ict
months than other parts of Greece. We conclude that cultural aversion was a key
determinant of purchasing behavior, and that memories of past con ict can aect
economic choices in a time-varying fashion. These findings are compatible with
behavioral models emphasizing the importance of salience for individual decision-
making.  english_version