The media have reported that the Tsipras government will begin during the month of November with its efforts to involve Germany in negotiations about finally settling - hitherto allegedly unsettled - WWII reparations. Greece will allegedly claim a sum of 280 BEUR based on a research report put together by the Greek parliament, of which 10 BEUR relate to WWI claims.
My personal interest in researching the subject, which now led to this article, was to finally obtain some clarity about the validity of Greece's claims. My research efforts were hampered by the fact that only very little original documentation can be found on the internet regarding the history of this issue. Neither could I find an English version of the above research report by the Greek parliament. Instead, one has to rely on authors who have allegedly seen such original documentation (like Götz Aly, Hagen Fleischer & Co.) and a multitude of true and/or alleged experts who have published on the subject.
It seems that 4 dates are of particular relevance as regards Greece's claims:
1946 - Paris Agreement on Reparations 1953 - London Debt Agreement 1960 - Bilateral Agreement Germany-Greece 1990 - "Two-plus-Four" Treaty
A. Paris Agreement on Reparations (1946) The Paris Agreement started as an understanding among the war Allies (the US, the UK and the Soviet Union; France joined after the war) at the Jalta and Potsdam conferences that war reparations from Germany should be limited to 20 BUSD. The idea was to learn from WWI and not to overburden Germany with war reparations beyond reason. The Soviet Union was awarded 25% of the total, with 75% to be divided among the Western war victims (18 countries), i.e. the signatories of the Paris Agreement. The Agreement provided only for the distribution of anticipated German reparations. It left their absolute size and nature to later determination, thus allowing for wide interpretations and later haggling. Put differently, the size of each slice was determined without determining the size of the cake. With the increasing significance of the Cold War, and due to pressure from the US, the overall amount allocable to Western war victims was continually reduced by the 3 Western Occupying Powers. The Petersberg Protocol of 1949 finally settled on a total reparations amount for Western war victims that was only a fraction of what these war victims, including Greece, had expected when concluding the Paris negotiations.
Strictly technically, one could argue that the Paris Agreement on Reparations settled all German war reparations once and for all. The line or argument would be: all 18 war victims had signed the Agreement allocating their respective shares. The fact that the overall allocable reparations amount declined over the years was a consequence of the times.
The text of the Paris Agreement suggests otherwise because it included provisions that the Agreement was without prejudice to "the determination at the proper time of the forms, duration or total amount of reparation to be made by Germany" or "the right which each Signatory Government may have with respect to the final settlement of German reparations". These issues would have to be settled, according to the Paris Agreement, by separate peace treaties between Germany and individual war victims (i. e. Greece).
Greece's share under the Paris Agreement was determined in the form of 30.000 tons of well functioning industrial equipment which was valued at 30 MUSD, a far cry from the original claims which Greece had made (7 BUSD by one account, 10 BUSD by another). The equipment was delivered to the port of Hamburg in 1948 and responsibility was passed over to the Greek Reparations Commission in Germany. The first shipment of 11.500 tons left Hamburg for Piraeus in 1950. A second shipment was sold to the UK as scrap. The rest was either sold in Germany as scrap or disappeared. There is no evidence how much of the 30.000 tons ever reached Greece (not even of the first shipment of 11.500 tons which had left Hamburg for Piraeus) nor is there evidence of payments received by Greece for equipment sold as scrap. The then head of the Greek Reparations Commission, George Lavdas, came under significant fire by Greek media at the time.
Unrelated to the above, the Paris Peace Conference of 1946 led to the signing of peace treaties between the 5 war allies of Germany (Italy, Finland, Hungary, Rumania, Bulgaria) and 7 war victims (Yugoslavia, Czechoslovakia, Greece, Soviet Union, Ethiopia, Albania), thus allowing the 5 war allies of Germany to resume their responsibilities as sovereign states. Under the Paris Peace Treaties, Greece was awarded reparations of 105 MUSD from Italy and 45 MUSD from Bulgaria. Put differently, Greece received more war reparations from each, Italy and Bulgaria, than it received from Germany under the Paris Agreement on Reparations.
B. London Debt Agreement (1953) This Agreement was a relief treaty between the Federal Republic of Germany (West Germany) and creditor nations. It was not a negotiation of war reparations because those, technically speaking, had been settled under the Paris Reparations Agreement of 1946. And yet, the London Debt Agreement of 1953 included several paragraphs alluding to unsettled war reparation claims against Germany, suggesting a general awareness that war reparations had not yet been fully settled. The most important paragraph, for Greece, is:
"Excluded from this Agreement are claims arising out of WWII by countries which were at war with or were occupied by Germany during that war, and by nationals of such countries, against the Reich and agencies of the Reich, including costs of German occupation, credits acquired during occupation on clearing accounts and claims against the Reichskreditkassen, all of which shall be deferred until the final settlement of the problem of reparation".
Greece was a signatory to this Agreement which unquestionably recognized that there was not yet a final settlement of war reparations. While the Agreement did not set a time limit for a final settlement, it was understood that a final settlement would eventually have to come and that German Re-Unification would be the starting signal for settling WWII reparations and for concluding peace treaties.
C. Bilateral Agreement Germany-Greece (1960) Between 1959-64, Germany concluded 12 Bilateral Compensation Agreements for Victims of the Nazi Regime to compensate individual victims of Nazi persecution. In the bilateral agreements Germany settled on paying 972 MDEM in what Germany considered voluntary compensation, without any legal obligation. The Agreement with Greece was concluded in 1960 for an amount of 115 MDM. The Greek state as recipient of the funds was responsible for passing them on to the individual victims. Under this Agreement, all claims by individuals against Germany were settled once and for all. Notwithstanding this, there continued to be national court judgments against Germany on behalf of further individual victims. Germany took the matter to the International Court of Justice, claiming immunity. In 2012 the International Court of Justice ruled in Germany's favor on the grounds that private individuals cannot sue states.
D. "Two-plus-Four" Treaty (1990) The full name was Treaty on the Final Settlement with Respect to Germany. The term 'final settlement' clearly referred to the 'final settlement' as stipulated in the Paris Agreement on Reparations (1946) and the London Debt Agreement (1953). It was a treaty between the Two (East and West Germany) and the Four (US, UK, France, Soviet Union). No other war ally or war victim of Germany was party to the treaty. The treaty had the function of a WWII peace treaty but for it to be called a peace treaty, it would have required the participation of all countries which Germany had been at war with. To make a multi-lateral peace treaty would not have been in Germany's interest 'for financial reasons', according to the German State Secretary Friedrich Voss at that time (i. e. the open question of German reparations for World War II, especially in the case of Greece).
The treaty's primary objective was "to conclude the final settlement with respect to Germany. Recognizing that, thereby, and with the unification of Germany as a democratic and peaceful state, the rights and responsibilities of the Four Powers relating to Berlin and to Germany as a whole lose their function". There is no reference in the treaty to other countries nor is there any implication that the treaty would also apply to other countries.
Still, it was recognized that any final settlement with regard to Germany required the involvement of other countries. If not directly as parties to the treaty, then indirectly. This was achieved by the Paris Charta ("Charta of Paris for a New Europe") which was adopted by 32 European countries (including Greece) and the US and Canada only one month after the Two-Plus-Four Treaty had been concluded. The Paris Charta did not reference the subject of war reparations but it included the following paragraph:
"We note with great satisfaction the Treaty on the Final Settlement with respect to Germany signed in Moscow on 12 September 1990 and sincerely welcome the fact that the German people have united to become one State in accordance with the principles of the Final Act of the Conference on Security and Co-operation in Europe and in full accord with their neighbors."
There are 2 ways of interpreting this paragraph. One is that, by signing the Charta, the signatories joined the Four Powers in "waiving the rights and responsibilities relating to Berlin and to Germany as a whole". Put differently, all signatories waived all rights and claims which they may have had before against Germany. The other way of interpreting this paragraph is that all it means is that the signatories noted "with great satisfaction the Treaty on the Final Settlement with respect to Germany." No more and no less.
What can be concluded from the above?
Two aspects appear near-certain: First, Greece, by signing the Bilateral Agreement Germany-Greece in 1960, waived any and all future rights to make further claims against Germany on the part of private individuals. And, secondly, there is no evidence whatsoever that Greece ever waived its rights to make additional claims against Germany as war reparations (the German government confirms this). On the contrary, reference is made in various places that, over the years, Greece presented on several occasions formal notes to Germany outlining its position that there were still open war reparation claims. The last formal note was presented shortly after the conclusion of the Two-plus-Four Treaty. Germany's position that the Greeks should have made their demands in 1990 and, by not making them, they accepted that the issue was closed, does not appear valid because neither the Paris Agreement on Reparations of 1946 nor the London Debt Agreement of 1953 stipulated a time limit for presenting such claims. "Noting with great satisfaction the Treaty on the Final Settlement (Two-plus-Four Treaty) with respect to Germany" can hardly be considered as consent by Greece to that Final Settlement when Greece was not party to the Final Settlement.
Germany has repeatedly stated that, in total, they have made reparation payments in multiples of the 20 BUSD which the Allies had considered as appropriate at Jalta and Potsdam. That may be true overall but with respect to Greece, reparations have totaled only the following: industrial assets valued at 30 MUSD in 1948 and compensation for private individuals of 115 MDM in 1960. More than that cannot be found anywhere. Anyone who has read books or seen documentations about Germany's warfare in Greece from 1941-44 must conclude that these are minute amounts. Germany argues that from 1956-63, it provided Greece with financial reconstruction aid of approximately 1 BDM. That may be true in the sense that Germany provided low-interest loans but, still, they were loans and not reparations.
The German government argues that "70 years after the end of WWII and after decades of peaceful, trustful and fruitful collaberation on the part of the Germany with the international community including NATO-partner Greece, the issue of WWII reparations has lost its validity." If that is indeed the case, then it should be put into a formal agreement between Germany and Greece.
The German government states that the Two-plus-Four Treaty includes the final settlement of all open legal issues stemming from WWII; that it was clear that there would be no further peace treaties beyond the Two-plus-Four Treaty (no statement to that effect is included in the treaty); and that the issue of WWII reparations has been deemed by the signatories to be closed. That all is correct but it applies only to the 6 signatories of the treaty.
Considering all of the above, it seems far easier to defend the position of Greece than that of Germany.
What is Greece asking for?
Below are the largest positions of the 280 BEUR war reparation claims which the Greek parliament has put together:
135 BEUR - material damage and damaged infrastructure 54 BEUR - damage cause by reduced domestic production 34 BEUR - follow-up damages to the period 1941-44 18 BEUR - damage to international trade 12 BEUR - destroyed shipping fleet 10 BEUR - Forced Loan 9 BEUR - war damage relating to WWI
The Forced Loan has received special attention of late. Commentators have argued that Greece's case regarding war reparations may be a very weak case 70 years after the end of WWII whereas a loan is a loan and has to be viewed differently from war reparations. That is correct as long as there is proper loan documentation as regards loan amount, interest rate and terms of repayment. If such proper documentation exists, a loan lives forever unless it is repaid or forgiven (neither of which has happened with the Forced Loan). However, no evidence of proper documentation has been published to date. Greece argues that the Nazi-government recognized that debt in 1943 (in actual fact, the Nazis established a Settlement Account in 1943 for all German-Greek payments); that it committed that the loan would be repaid after the war and that the interest rate was set at 0%. Again, there is no formal evidence to that effect, not to mention the fact that a loan disbursed in the early 1940s carrying an interest rate of 0% would be close to worthless today.
The evidence regarding the Forced Loan suggests a different scenario. In 1942, Hitler appointed a Special Commissioner for Economic and Financial Issues in Greece. Hermann Neubacher, former mayor of Vienna, was put in charge and sent to Greece to stabilize Greece's fiscal situation and the exchange rate of the Drachma, both with a view towards increasing Greece's ability to pay for occupation costs. Neubacher's team consisted of 7 departments, one of which was the Economic Department headed by Paul Hahn, Director of the Reichsbank. On April 12, 1945, less than one month before the end of the war, a Final Report was submitted by the Commission in which Hahn summarized, among other things, the transactions in the above Settlement Account. Hahn wrote in this internal document: "If one makes the necessary adjustments in the final reckoning, the remaining debt owed to Greece would amount to 476 million Reichsmark." Hahn then adds that this amount was provisional and would have to be netted with claims which Germany had against Greece resulting from exports and other financial aid to support the Drachma. Hahn concluded that "regrettably, such information is not available at this time which makes it impossible to make a correct adjustment of Germany's liabilities towards Greece."
Götz Aly, co-author of the book "Hitler's Beneficiaries: Plunder, Racial War and the Nazi Welfare State", had described in that book in minute details the demonic financial structures which the Nazis had implemented in order to exploit occupied countries. From that standpoint, one can consider Aly as a non-biased expert. Aly has described the issue of the Forced Loan as a legend. There had not only been substantial transfers from Greece to Germany since 1942 but also from Germany to Greece. While detailed numbers are not available, Aly cites estimates by the then German officials that Germany's claims in the Settlement Account were approximately 300 million Reichsmark. That would leave a net liability towards Greece of 176 million Reichsmark. Aly adds, however, that IF the debit balance in the Settlement Account could be proven and IF the debit balance could be shown to have been a financial loan with proper documentation and IF Germany repaid the open balance (whatever the current equivalent would be), two-thirds of that payment would go to Bulgaria, Hungary, Rumania and Serbia because those countries sourced the transfer to Greece, and only one-third would go to Greece.
In conclusion, it seems unwise on the part of Greece to place special priority on the socalled Forced Loan because the Forced Loan seems to be a weak case which could easily turn into an embarrassment for Greece, which, in turn, could weaken Greece case regarding other war reparation claims.
Based on the evidence available to me, I find it difficult to understand why most commentators seem to be convinced that Greece does not have a claim against Germany under the title of WWII reparations. While the case for the Forced Loan seems weak, the case for general war reparations seems strong. Greece has so far received war reparations from Germany in the amounts of 30 million USD (Paris Agreement on Reparations) and 115 million Deutsche Markt (Bilateral Agreement Germany-Greece). That sum is significantly less that the combined WWII reparations of 150 million USD which Greece received from Italy and Bulgaria (Paris Peace Treaties). It seems beyond doubt that the damage caused by Nazi-Germany far exceeded the damage caused by Italy and Bulgaria.
It seems that most commentators follow the line of argument pursued by the German government, namely: that claims for war reparations have lost their validity 70 years after the end of the war; that Germany fully complied with the Paris Agreement on Reparations; that Germany voluntarily made additional compensations for private individuals (Bilateral Agreement Germany-Greece) and that, if there were still open issues after all that, the Two-plus-Four Treaty, indirectly accepted by Greece through the Paris Charta, finally settled any and all claims which might still have been open.
The German Chancellor Helmut Kohl once made the following statement regarding Greek war reparations claims: "Look, we claim that we cannot pay reparations because if we open this Pandora's box, then given the viciousness and brutality of Nazi warfare, the genocides - there were several genocides that the Nazis carried out - given these absolutely horrific facts and the unbelievable scale of these horrific crimes, any attempt to quantify this and translate it into claims against Germany will either come up with ridiculously low compensation or it is basically going to eat up all of Germany's national wealth."
Leaving legalities on the side, Kohl's explanation seems to be the most honest one.