Costa Vertzayias: Germany – Crime and (Non) Payment

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From April 1941 to October 1944 Greece was under German occupation. The massacres, executions, burning of over 1700 villages, extermination of Greek Jews, widespread destruction of infrastructure and mass famine are well documented. As a direct result of WWII and the civil war that followed it is estimated that Greece lost 13% of its population. (By way of contrast, Russia lost 10% and Poland 8%. Also in 1940 Australia and Greece had the same population  i.e   7 million). The country was left in ruin and abject poverty. The mass emigration to Australia, America, Canada, South Africa and Western Europe in the 1950’s and the early 1960’s followed.  All this because of the unprovoked invasion and occupation by the Axis powers.  During the occupation the German Government obliged Greece to lend it 3.5 billion American dollars. This loan has not been repaid. At the 1946 Paris Peace Conference it was determined that Germany owed Greece 7.1 billion American dollars for damages as a result of the destruction of property and infrastructure. This, too, remains unpaid. In 1947, a comprehensive report on the economic loss and destruction was prepared by Konstantinos Doxiades,  Director of the Ministry for Reconstruction. The enormity of the destruction, theft and damages are mind boggling. The report deserves to be read so that the loss can be truly understood and put in perspective and why it took Greece so many decades to recover.

Germany has never denied any of the crimes or any of the acts of destruction. However, Germany has systematically avoided payment.

On 27thFebruary 1953 the London Agreement was signed between the victors and the Federal Republic of Germany (West Germany) which defined and regulated the terms of Germany’s foreign debt arising from both World Wars. For reasons that may be left to another day, the victors were exceedingly generous with the FRG by : (i) forgiving (writing off) one half of the debt (ii) delaying  repayment of  any of the principal amount for 5 years (iii) adding a rider (article 5) that the examination of claims for compensation arising from WWII including the costs of the German Occupation were to be deferred until the final settlement of reparations. Effectively, this meant that all such negotiations and payments were to be postponed to after the reunification of the two Germanies. Greece was not represented at the London Conference but made it known through its London Embassy that it required payment of the WWI reparations and the repayment in full of the WWII occupation loan. Greece was given assurances and, accordingly, signed the Agreement. It took Greece another 20 years to obtain payment for the WWI reparations, however in doing so, it may have signed away its rights to the WWII reparations. This is what Germany relies upon to deny any obligation for further payment.

In 1997 the relatives of the victims of the Distomo massacre (10thJune 1944 – 218 men, women and children were executed) commenced proceedings for compensation in the Greek judicial system which resulted in German property being attached in Italy to satisfy the Greek judgement. Germany then took the case to the International Court of Justice in the Hague. On 3 March 2012 the ICJ determined in favour of Germany on the basis that the Italian Courts had no jurisdiction against Germany. This is a final judgment and conclusively decides that individuals will not be able to take similar action against Germany in the future. It throws the ball squarely into the Greek Government’s court to now take action as the issues of the forced war loan and reparations for the damages to infrastructure have never been determined by the ICJ and, in which, only countries can be litigants.

What does Germany say? (i) On 1st April 2012 (following the ICJ decision) the German Foreign Ministry announced : “…Germany …has paid compensation to Greece…and has supported the country in its reconstruction …for 65 years after the war, (years) full of peaceful cooperation and close relationship in NATO and the EU…the question of compensation from the Federal Government’s perspective is no longer an issue…” (ii) In July 2013 German finance Minister Wolfgang Schauble said the following on Greek television : “…as for the WWII reparations the matter has been determined by the London Agreement and the “The 2 + 4” Agreement for German Unification in 1990”. (iii) Germany’s legal position on the Greek claim has two prongs : (a) a bilateral agreement signed in 1960 by Greece and Germany pursuant to which Germany paid  115 million Marks compensation for Greek citizens the victims of the Nazi Occupation. The third article of the Agreement states that the compensation paid is in full settlement of all legal claims made by Greek citizens. Although this may bar claims for compensation to individuals it does not bar a claim by the Government of Greece for damages to infrastructure nor is there any mention of the enforced war loan. (b) Reliance on the 1953 London Agreement which exempts Germany from payment of reparations until the signing of a Peace Treaty. The German position is that no peace treaty has been signed to date. There is legal opinion, however, that the Agreement signed on 12thSeptember 1990 (and known as 4+2) for the unification of Germany constitutes a Peace Treaty and therefore Germany is now obliged to pay reparations. (This is contrary to what Schauble asserted on Greek television.)

The Greek position appears (the Greek state has not formally dealt with the essence of Greek reparations other than the 1960 Agreement) to be that : 1. Germany owes Greece $(US) 7.1 billion (at the 1938 purchasing power) for damages to Greece’s infrastructure as determined by the Paris Peace Conference in 1946. This amount can be categorised as reparations. 2. The enforced war loan of $(US) 3.5 billion (at 1938 value) plus interest. In  today’s values this is about 54 billion euros.3. The return of archaeological artifacts. 4.  Compensation for the families of the victims.

Whilst the fourth claim may be barred by the 1960 payment there is no reason why the first three claims cannot be pursued. Time is not a factor as we have seen with the prosecution of the Holocaust perpetrators. Further, the last payment to the USA for WWI reparations was made by Germany in 2010 i.e  almost a century later!

Thus, the total amount owing by Germany to Greece for reparations and the war loan is 162 billion euros according to German sources (DER Spiegel and Tagesspiegel) (108 billion euros for damages to infrastructure , 54 billion euros for the loan).

Whilst the timing to commence action against Germany is not good, the Greek political parties should agree on a bipartisan policy as to how the Greek Government will proceed. In the first instance this should be behind the scenes at a diplomatic level and if this does not lead to a negotiated settlement then proceedings should be launched in the ICJ. The German President whilst on an official visit to Greece acknowledged a moral responsibility. It is not good enough. Payment of the reparations and the occupation loan are legal obligations arising from the 1946 Paris Peace Conference and the 1953 London Agreement. In addition the contractual terms of the loan actually provide for its repayment. Hitler, in fact, made two small repayments. The Greek governments have not served the country well by allowing the issue to continue after the 1990 unification of Germany, although in fairness, they have raised it from time to time. However, Greece’s credibility has suffered yet again.

This is above all a matter of justice for every Greek citizen who was murdered or who died of famine, who was tortured, whose village was burnt and home was lost or who was forced by necessity to migrate to the ends of the world.


President of the Hellenic Republic Prokopis Pavlopoulos has reignited debate about German reparations. As a consequence, media research has brought to light the following:

During then Foreign Minister (Later Chancellor) Gerhard Schroeder ‘s visit to Athens on 15 October 1966, the Greek position was put to him verbally and followed up by a verbal note dated 9 November 1966. The official response by the Federal Republic of Germany stated inter alia; –

“…during an exchange of ideas between the federal minister of Foreign affairs Dr Gerhard Schroeder with his Greek counterpart…the Greek side raised demands that the Bank Of Greece alleged it had against Germany arising from monetary transactions during the occupation of WWII…in this context Minister Schroeder referred to letters dated 30thSeptember 1964 and 26 March 1965 from the Federal Finance Ministry to PM George Papandreou and Professor Andreas Papandreou. In these letters references made to statements made by representatives of the Greek government in 1958 at the finalization of an agreement between the German government and Greece whereby credits of 200 million Marks were made available…the statements by the Greek representatives were of a nature which allowed the German side to interpret them that possible Greek claims arising from the German occupation would not be pursued in the light of the German economic aid. However, the Federal government never considered that by such statements the Greek government intended to formally resign from what it believed to be its legally entrenched claims arising from the occupation during WWII…”

If this newspaper report is correct then this German reply essentially acknowledges that the Greek claims may be enforced.

President Pavlopoulos (in his previous capacity as a professor of law at Athens University) had also written to the German government in which he submitted, inter alia:-

  1. The London Agreement of 1953 never extinguished Germany’s obligations to pay reparations but merely suspended such obligation until the signing of a peace treaty. It was not possible for Germany to sign a “Peace Treaty” at the time as there were “2 Germanies”. The ability to sign a Peace Treaty became possible in 1990 with the so called “2+4 Agreement” whereby the reunified Germany regained the sovereignty over the territory of both West and East Germany .
  2. The “2+4 Agreement” by its nature and generality extends to non contractual states such as Greece.
  3. Greece’s legal claims arise from article 3 of the fourth Hague convention of 1907 and the law arising therefrom was confirmed by the Nuremberg Military Tribunal of 1946
  4. Chancellor Ludwig Erhardt formally acknowledged this to the Greek Government in 1965. At the time, Erhardt spoke of reparations to the value of 500 million marks .

All the above reinforces the strong contention that :-

  1. There is no sound argument that prevents a successful claim by Greece in the ICJ for the repayment of the forced occupation loan.
  2. Pavlopoulos, in his capacity as a law professor believes the “2+4 Agreement” acts as a Peace Treaty and this has triggered Germany’s obligation to pay reparations. The Organisation for Security and Cooperation in Europe (OSCE) has accepted that the “2+4 Agreement” acted in lieu of a Peace Agreement. As there is sufficient legal opinion to support this position the challenge should be mounted in the ICJ at the same time as the claim for the repayment of the war loan.
  3. There is absolutely no reason whatsoever why Greece has not sought to recover the stolen archaeological treasures.
  4. Poland has indicated that it will formally raise the issue of German reparations and compensation for damages it suffered during the Nazi Occupation. Other EU countries also have similar claims. This is the opportunity for it to be dealt with internally by the European Commission if it cannot be resolved behind the scenes with Germany. I somehow have a sneaking suspicion that the original EEC countries and the USA have secretly agreed to let Germany off the hook. We will not know however until a claim is lodged by Greece or Greece/Poland or a class action in the ICJ. Greece should consider a class action with Poland and other countries.

For years now politicians, prime ministers and presidents have been talking, making stirring speeches , gaining glaring headlines. There is no legal impediment or other reason why no action has been taken on what is a bipartisan issue and is in the national interest.

It is time to launch the challenge in the ICJ. NOW!

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