Nazi Extortion Study Sheds New Light on Forced Greek Loans

Is Germany liable to Athens for loans the Nazis forced the Greek central bank to provide during World War II? A new study in Greece could increase the pressure on Berlin to pay up.

German occupation troops in the ransacked Greek village of Distomo on June 10, 1944, shortly after 218 local residents were executed as part of Nazi reprisals.
DPA

German occupation troops in the ransacked Greek village of Distomo on June 10, 1944, shortly after 218 local residents were executed as part of Nazi reprisals.

By , and


Loukas Zisis, the deputy mayor of Distomo, a village nestled in the hills about a two hour drive from Athens, says he thinks about the Germans every day. On June 10, 1944, the Germans massacred 218 people in Distomo, including dozens of children. Zisis, who is just 48 years old, wasn't yet born at the time of the attack.

"We can't forget the Germans," Zisis says. They came to Distomo 71 years ago with their guns. "Today they are exerting power over our village with their banks and policies," he adds. He's standing in the wind on a rocky ledge, a small man in a leather jacket, and looking out over the town. Two-thousand people live here.

The massacre, which continues to shape the place today, was one of the most brutal crimes committed by the Nazis in Greece, with the carnage lasting several hours. For decades, a trial over the massacre wound its way through the courts at all levels in Greece and Germany. Greece's highest court, the Areopag, ruled in 2000 that Germany must pay damages to Distomo's bereaved.

"But we are still waiting," says Zisis. "There has been no compensation."

Last week in Greek parliament, Greek Prime Minister Alexis Tsipras demanded German reparations payments, indirectly linking them to the current situation in Greece. "After the reunification of Germany in 1990, the legal and political conditions were created for this issue to be solved," Tsipras said. "But since then, German governments chose silence, legal tricks and delay. And I wonder, because there is a lot of talk at the European level these days about moral issues: Is this stance moral?"

Tspiras was essentially countering German allegations that Greece lives beyond its means with the biggest counteraccusation possible: German guilt. Leaving aside the connection drawn by Tsipras, which many consider to be inappropriate, there are many arguments to support the Greek view. SPIEGEL itself reported in February that former Chancellor Helmut Kohl used tricks in 1990 in order to avoid having to pay reparations.

A study conducted by the Greek Finance Ministry, commissioned way back in 2012 by a previous government, has now been completed and contains new facts. The 194-page document has been obtained by SPIEGEL.

Outstanding German Debt

The central question in the report is that of forced loans the Nazi occupiers extorted from the Greek central bank beginning in 1941. Should requests for repayment of those loans be classified as reparation demands -- demands that may have been forfeited with the Two-Plus-Four Treaty of 1990? Or is it a genuine loan that must be paid back? The expert commission analyzed contracts and agreements from the time of the occupation as well as receipts, remittance slips and bank statements.

They found that the forced loans do not fit into the category of classical war reparations. The commission calculated the outstanding German "debt" to the Greek central bank and came to a total sum of $12.8 billion as of December 2014, which would amount to about €11 billion.

As such, at issue between Germany and Greece is no longer just the question as to whether the 115 million deutsche marks paid to the Greek government from 1961 onwards for its peoples' suffering during the occupation sufficed as legal compensation for the massacres like those in the villages of Distomo and Kalavrita. Now the key issue is whether the successor to the German Reich, the Federal Republic of Germany, is responsible for paying back loans extorted by the Nazi occupiers. There's some evidence to indicate that this may be the case.

In terms of the amount of the loan debt, the Greek auditors have come to almost the same findings as those of the Nazis' bookkeepers shortly before the end of the war. Hitler's auditors estimated 26 days before the war's end that the "outstanding debt" the Reich owed to Greece at 476 million Reichsmarks.

Auditors in Athens calculated an "open credit line" for the same period of time of around $213 million. They assumed a dollar exchange rate to the Reichsmark of 2:1 and applied an interest escalation clause accepted by the German occupiers that would result in a value of more than €11 billion today.

'No Ifs or Buts'

This outstanding debt has to be paid back "with no ifs or buts," says German historian Hagen Fleischer in Athens, who knows the relevant files better than anyone else. Even before the new report, he located numerous documents that prove without any doubt, he believes, the character of forced loans. Nazi officials noted on March 20, 1944, for example, that the "Reich's debt" to Athens had totaled 1,068 billion drachmas as of December 31 of the previous year.

"Forced loans as war debt pervade all the German files," says Fleischer, who is a professor of modern history at the University of Athens. He has lived in Athens since 1977 and has since obtained Greek citizenship. He says that files from postwar German authorities about questions of war debt "shocked" him far more than the war documents on atrocities and suffering.

In them, he says German diplomats use the vocabulary of the National Socialists to discuss reparations issues, speaking of a "final solution for so-called war crimes problems," or stating that it was high time for a "liquidation of memory." He says it was in this spirit that compensation payments were also constantly refused. Fleischer had long been accused of bias and he says he is now pleased to have support from Athens -- particularly given that the present study has nothing to do with Prime Minister Alexis Tsipras' Syriza government.

When work on the study first began in early 2012, the cabinet of independent Prime Minister Loukas Papademos still governed in Athens. A former vice president of the European Central Bank, Papademos formed a six-month transition government after Georgios Papandreou resigned. In April 2014, the successor government of conservative Prime Minister Antonis Samaras decided to continue work on the study and appointed Panagiotis Karakousis to lead the team of experts. The longtime general director of the Finance Ministry was considered to be politically unobjectionable.

50,000 Pages of Documents

Karakousis spent five months reading 50,000 pages of original documents from the central bank's archives. It wasn't easy reading. The study calculates right down to the gram the amount of gold plundered from private households, especially those of Greek Jews: 7,358.0014 kilograms of pure gold with an equivalent value today of around €235 million. It also notes also how German troops, as they pulled out, quickly took along "the entire cash reserves from branch offices and regional branches" of the central bank: Exactly 634,962,691,995,162 drachmas in notes and coins, which would total about €40 million today.

Above all, the study, with some reservations, provides clarity about the forced loans. "No reasonable person can now doubt that these loans existed and that the repayment remains open," says Karakousis.

This history of the loans began in April 1941, after the German troops rushed to assist their Italian allies and occupied Greece. In order to provide their troops with provisions, the German occupiers demanded reimbursement for their expenses, the so-called occupation costs. It's a cynical requirement, but one that became standard practice after the 1907 Hague Convention.

Out of the ordinary, though, was the Wehrmacht requirement that the Greeks finance the provision of its troops on other fronts -- in the Balkans, in Russia or in North Africa -- despite Hague Convention rules forbidding such a practice. Initially, the German occupiers demanded 25 million Reichsmarks per month from the government in Athens, around 1.5 billion drachmas. But the amount they actually took was considerably higher. The expert commission determined that payments made by the Greek central bank between August and December 1941 totaled 12 billion rather than 7 billion drachmas.

'Unlimited Sums in the Form of Loans'

With their economy laid to waste, the Greeks soon began pushing for reductions. At a conference in Rome, the Germans and Italians decided on March 14, 1942 to halve their occupation costs to 750 million drachmas each. But the study claims that Hitler's deputies demanded "unlimited sums in the form of loans." Whatever the Germans collected over and above the 750 million would be "credited to the Greek government," a German official noted in 1942.

The sums of the forced loans were up to 10 times as high as the occupation costs. During the first half of 1942, they totaled 43.4 billion drachmas, whereas only 4.5 billion for the provision of troops was due.

A number of installment payments, which Athens began pressing for in March 1943, serve to verify the nature of the loans. Historian Fleischer also found records relating to around two dozen payment installments. For example, the payment office of the Special Operations Southeast was instructed on October 6, 1944 to pay, inflation adjusted, an incredible sum of 300 billion drachma to the Greek government and to book it as "repayment."

'Debts Have to Be Paid Back'

In Fleischer's opinion, the report makes unequivocally clear that the Greek demands do not relate to reparations for wartime injustices that could serve as a precedent for other countries. "One can negotiate reparations politically," Fleischer says. "Debts have to be paid back -- even between friends."

Postwar Greek governments sought repayment early on. The German ambassador confirmed on October 15, 1966, for example, that the Greeks had already come knocking "over an alleged claim."

On November 10, 1995, then Prime Minister Andreas Papandreou proposed the opening of talks aimed at a settlement of the "German debts to Greece." He proposed that "every category of these claims would be examined separately." Papandreous' effort ultimately didn't lead anywhere.

So what happens now? What should become of this new study, the contents of which had remained secret before now?

"I am not a politician," says Karakousis, "I've just done my duty."

But the question also remains whether the surviving relatives of the victims of Distomo will ever be provided with justice -- and whether there are similar cases in other countries.

German lawyer Joachim Lau, whose law firm is based in Florence, Italy, represents the interests of village residents of Distomo even today. Lau, born in Stuttgart, a white-haired man of almost 70, is fighting for compensation in the name of the Greek and Italian victims of the Nazis. "I am disappointed by the manner in which Germany is dealing with this question," he says. He says it's not just an issue of financial compensation. More than anything, it is one of justice.

Careless Statements

In February, Lau warned German President Joachim Gauck in an open letter against propagating the "violation of international law" with careless statements about the reparations issue. In his view, the legal situation is clear: Greek and Italian citizens and their relatives affected by "shootings, massacres by the Wehrmacht, by deportations or forced labor illegal under international law" have the right to individual claims.

For the past decade, Lau has been pursuing the claims of the Distomo victims in Italy. The Court of Cassation in Rome affirmed in 2008 that the claims were legitimate and that he could pursue the case. Earlier, the lawyer had already succeeded in securing Villa Vigoni, a palatial estate on the shore of Lake Como owned by Germany -- and used by a private German association focused on promoting German-Italian relations -- as collateral for the suit. In 2009, Lau succeeded in having €51 million in claims made by Deutsche Bahn against Italian state railway Trenitalia seized. On Tuesday, the high court in Rome is expected to rule on the lifting of the enforcement order.

Following a ruling made by Italy's Constitutional Court in October 2014, private suits in Italy against Germany have been possible again. One of the justices who issued the ruling is the current president of Italy, Sergio Mattarella.

It remains unclear whether this ruling will unleash "a wave of new proceedings" in Italy, says Lau, who currently represents 150 cases, including various class-action lawsuits.

Present and Past, Guilt and Anger

Everything connects in the mountain village of Distoma -- the present and past, guilt and anger, the Greek demands on Germany today and past calls for reparations. Efrosyni Perganda sits in the well-heated living room of her home. The diminutive woman, 91 years of age, has alert eyes and wears a black dress. She survived the massacre perpetrated by the Germans at Distomo and she's one of the few witnesses still alive in the village.

The bones of victims of the Nazi killings in Distomo are features as part of the village's memorial to the massacre.
Bernhard Riedmann / Der SPIEGEL

The bones of victims of the Nazi killings in Distomo are features as part of the village's memorial to the massacre.

When the SS company undertook a so-called act of atonement in Distomo following a fight with Greek partisans, the soldiers also captured her husband. Efrosyni Perganda stood by with her baby as they took him. She never saw him again.

As the Germans began to rampage, she hid behind the bathroom door and later behind the living room door of the house in which she still lives today. She held her baby tightly against her chest. "I forgive my husband's murderers," she says.

Loukas Zisis, the deputy mayor, silently leaves the house as the woman finishes telling her story. He needs a break and heads over to the tavern, where he orders a glass of wine. "I admire Germany: Marx, Engels, Nietzsche," he says. "The prosperity. The degree to which society is organized. But here in the village, we aren't finding peace because the German state isn't settling its debt."

Zisis admires Germany, but the country remains incomprehensible to him. "We haven't even heard a single apology so far," he says once again. "That has to do with Germany's position in Europe." This is something that he just doesn't understand, he says.

Article...


Comments
Discuss this issue with other readers!
50 total posts
Show all comments
Page 1
wiebke.janssen.10 03/21/2015
1. Greek loans
I am a German living in the US. I think that most Germans, like me, will want to do what's fair. If Nazi Germany extorted loans from Greece we will want to make amends. How, and to whom, will have to be determined though balanced studies and a substantive dialogue.
pmoseley 03/21/2015
2. Now's the time
The German people have often said that they were victims of Hitler as much as anyone else was. Now is the time to prove that they can compensate and apologies to the foreign victims of their country as much as anyone else does.
stevej8 03/21/2015
3. Becoming absurd pt. 1
A number of points need to be made in relation to this. Firstly, it is clear from the above that (Fascist) Italy was also involved in charging occupation costs to the Greeks, the question then arises, how much? This is all the more relevant as Italy was the original aggressor against Greece, even against the wishes of Hitler at the time, and the cause of Nazi Germany's entry, as well as an ongoing occupier (and oppressor) of Greece for over two years. Bulgaria also occupied (and annexed) a substantial portion of northern Greece, with considerable massacre and ethnic cleansing. Even Britain played a partly negative role in the 'Greek Tragedy'. It is fallacious and unjust to speak only of Germany's (alleged) 'debt' given those facts. Secondly, the 'forced loans' were between the Nazi and collaborating Hellenic State regimes, both of which ceased to exist by 1944-45, and their place taken by Allied powers who liquidated what remained of their 'assets' and legacies, in the process apportioning assessed reparations. So it is also fallacious to speak of an outstanding contract 'debt' between Germany and Greece, whose regimes (and citizens overwhelmingly) are not (remotely) the same as those during the war, and when the 'debt' in question clearly depended (as a 'contract' at least - which it was hardly, in the normal sense, as opposed to an arrangement between two collaborating regimes for the purpose of their own politics) on the survival and even victory of the wartime regimes in question. Thirdly, after so many decades, agreements, and transfers (from Germany to Greece), it is nonsensical to now claim that such an alleged 'debt' from WW2 is somehow intact and owing as though nothing had happened since 1944/5. It is a purely theoretical retrospective claim in distant hindsight that ignores many cancelling and mitigating factors. And how can the Germans of today be legally financially liable for the events of the mid-1940's, and after so many intervening events and payments? And fourthly, if Greeks still have the 'right' to claim reparations payments for WW2, then so does everyone else, including Germans, who were brutalized and expelled in the many millions from Eastern Europe and even the Balkans. If 'justice' is the issue, then it must apply impartially. Even to the many victims of Greek war crimes and ethnic cleansing in places like Turkey and Albania during and after WW1 for that matter. And the many African and Balkan victims of Fascist Italy, the British and French empires, and so on (and on). The idea that only Germany is liable for such things is not only out of date, it is false and obscene, above all as Germany has already paid far more than any other nation for the past, and is practically alone in the world for having done so on anything beyond a token scale, and because it is a travesty of justice, when the vast majority of the world's victims of injustices both distant and recent go uncompensated, whilst Germany alone is practically 'milked' forever by endless additional claims which it seems no prior reparations, agreements and treaties are ever enough to put an end to.
stevej8 03/21/2015
4. Becoming absurd pt. 2
To attempt to formally reopen such an issue now would be a precedent for disaster, for Germany, and Europe. If Germany is to be essentially blackmailed into it despite all the aforementioned facts, then it is clear that there is no sound basis for Germany to remain an EU/EZ linchpin, with all the costs and risks that entails, and still be expected to pay vast additional arbitrary sums for WW2 (and presumably WW1 also when things really get going). Germany would have to reassess its whole position and policy in Europe, and even beyond. The potential costs for other nations, France and Italy especially, could also be enormous. Those who push this issue have either not thought through the full facts and implications, or seek such a divisive and costly outcome. All that said, whilst Germany should and must avoid any spurious and dangerous admission of additional (and sole) liability for the events of WW2, there may be some sense in looking at other ways of providing some help to Greece by way of a gesture of goodwill and friendship, such as possible reductions on certain items of defense technology for example, and further targeted and ringfenced job-generating investment, but ONLY on strict condition that Greece cease pressing such retrospective and damaging claims once and for all, and abide by its former repeated de facto acceptance that it is a settled issue. Such gestures would have to be on the basis that they constitute no admission of liability in any way, in order not to provide yet further possibilities of more claims down the track, and should only follow a substantial 'cooling-off' period, so as to not appear to be a reward for tactics of blackmail and threat.
stevej8 03/21/2015
5. Final thought
Finally, after so much time and all the pertinent factors and events, it is for the Greek government to provide additional compensation to such victims of distant atrocities as it deems fit, which it is after all in a position to do via the funds it receives from Germany also via the EU (directly or by substitution), and indeed could long since have done, had it so desired. Such compensation is apart from anything optional and voluntary, not a fixed part of international conduct. But to selectively and retrospectively demand further such payments from Germany (and Germany alone) directly is not merely transparently political, and politically explosive, but hypocritical, dishonest, and unfair.
Show all comments
Page 1

© SPIEGEL ONLINE 2015
All Rights Reserved
Reproduction only allowed with the permission of SPIEGELnet GmbH


TOP
Die Homepage wurde aktualisiert. Jetzt aufrufen.
Hinweis nicht mehr anzeigen.