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Berlin's medieval debt

Berlin owes a small town trillions of dollars on a 450-year-old debt.

Berlin debt trillions mittenwaldeEnlarge
Merkel won't be smiling when she finds out about Berlin's centuries old multi-trillion dollar debt. (Adam Berry/Getty Images)

The quiet town of Mittenwalde, about 30 kilometers southeast of Berlin, recently discovered a debt certificate from May 28, 1562, in which Mittenwalde loaned Berlin 400 guilders (gold coins used as currency), reports Reuters

The certificate was uncovered by Mittenwalde's town historian, Vera Schmidt. As the debt came with an annual 6 percent interest rate Berlin would owe Mittenwalde 11,200 guilders today — equivalent to about 112 million euros ($137 million).

Once the number is adjusted for inflation and compound interest, the figure comes out somewhere in the trillions, reports Reuters.

Berlin — a city already 63 million euros ($77 million) in debt — may have some hope, however. The promissory note is missing the seal, which may render it invalid, the Financial Times of Deutschland reports, though historians are quick to point out that seals weren't widely used until the 17th century.

Berlin has repaid part of the debt, at least. A ceremonial guilder, dated back to 1539, was given to Mittenwalde by Berlin's finance minister, Ulrich Nussbaum. If it ever reached the market, the 3.25-ounce, 18-karat gold piece would go for somewhere in the range of 50,000 to 100,000 euros ($61,000 to $122,000), reports the Berliner Zeitung.

Apparently this isn't the first time the certificate has been found, nor the request for payment been made though. Mittenwalde has been asking Berlin for payment every 50 years or so since 1820, according to the Berliner Zeitung.

UPDATE: The Mayor of Mittenwalde is now moaning about the incident's international fame!

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Original Source URL: 
http://www.businessinsider.com/berlin-owes-small-german-town-trillions-2012-7

http://www.globalpost.com/dispatch/news/regions/europe/germany/120723/berlin-trillion-dollar-debt-mittenwalde-medieval