The basic principles and terms of the reparation payments made by Germany and her allies were determined in 1945 at the Yalta and Potsdam conferences. For the USSR, the subject of German reparations was closed in 1953 when Moscow outright refused reparation deliveries from the German Democratic Republic and began paying for them at Comecon (Council for Mutual Economic Assistance) prices.
Owing to the division of Germany and a number of other reasons, no general records were even set up for Germany’s fulfilment of its reparation obligations. Today, the German government does not have accurate information regarding its reparations and is using little more than certain expert estimates.
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Some issues of reparation claims and obligations were resolved and continue to be resolved with Germany on a bilateral basis behind the scenes. Thus the reparations agreement between the Federal Republic of Germany and Israel (1952), known as the Luxembourg Agreement, is probably the only instance in history when reparation payments have been given to a state that did not exist during the war that gave rise to the reparations. During the period of the Luxembourg Agreement (1953-1965), which was diligently fulfilled by the Federal Republic of Germany, German reparation deliveries made up between 12 and 20 per cent of Israel’s annual imports. Some experts believe that Israel owes more to German reparations than US aid for the development of its economy.
Following the expiration of the Luxembourg Agreement in 1965, Germany continued to pay compensation to various foundations and organisations in Israel, which, in turn, made the funds available to individuals classed as victims of Nazism.
By 2008, Germany had paid Israel reparations totalling more than €60 billion as compensation for victims of the Holocaust.
This can be read about in more detail in The Holocaust Industry: Reflections on the Exploitation of Jewish Suffering by US political scientist Norman Finkelstein, published in 2000.
Finkelstein points out that the bulk of the money did not reach Jewish victims of Nazism: the money was embezzled by unscrupulous businessmen who turned the ‘Holocaust industry’ into a goldmine. According to our estimates (taking into account changes in the purchasing power of currencies), the amount of reparations received by Israel from Germany between 1953 and 2008 is close to 50 per cent of the total reparations received by the Soviet Union from Germany (1945-1953).
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One of the first countries to raise the issue of ‘unpaid reparations’ was Poland. Following the Second World War, a significant portion of the territory of the former Third Reich was passed to Poland, leading to the expulsion of millions of Germans from there in 1945. Calling on the law of restitution, the displaced Germans and their descendants began to file lawsuits in German courts demanding the return of their property (primarily real estate) left behind in their homeland. The German courts ruled in favour of the claimants, and the Prussian Claims Society was set up to represent the interests of these Germans. By the beginning of the 2000s, the total amount of claims and court rulings on them already amounted to billions of dollars. Former German property owners were particularly inspired by the fact that in the 1990s, Poland was one of the first countries in Eastern Europe to pass laws on restitution for Poles. The Polish treasury has paid out more than $12.5 billion on restitution claims and is planning to spend tens of billions more, since the number of claims already exceeds 170,000. It is important to emphasise that in Poland, the right to restitution only extends to Poles. Germans have no rights at all according to Polish law and have to secure their rights through the courts.
Results of the German occupation of Warsaw
Perhaps it was this fact that prompted the Polish Sejm in September 2004 to raise the issue of German reparations, which were allegedly not received in full. A special resolution of the Polish parliament states: “The Sejm has determined that Poland has not yet received adequate financial compensation and war reparations for the destruction and material and immaterial losses suffered due to German aggression, occupation, genocide and loss of the independence of Poland.” Poland lost six million people during the war; between 1939 and 1944, Polish industry was virtually destroyed, and Warsaw and many other Polish cities were completely ruined. The amount of reparations received by Poland could not, in reality, cover all of the country’s losses. Another matter is to what extent, from the point of view of international law, attempts to revise the terms of Germany’s reparations payments after almost 70 years are justified. We have not even mentioned the fact that the authors of certain publications in Poland are leading their readers to the conclusion that if the Poles are to call for additional compensation, then it should not be from Germany, but from… Russia. The reason they give is that after the war, Poland did not receive reparations directly from Germany. The USSR received the reparations of territories under its control and part of these reparations was transferred to Poland.
Over the past decade, Poland has not returned to the issue of German reparations, possibly because in 2006, German Chancellor Angela Merkel publicly told Polish Prime Minister Jarosław Kaczyński that the federal government “does not support the private claims of Germans for the return of their property in Poland”. However, there are no guarantees that Warsaw will not once again raise the issue of reparations at any moment. And if the Poles were to return to this issue today, there is every likelihood that they would no longer make a claim against Germany, but against Russia.
It should be noted that Poland is not alone in its reparation claims. In 2008, Italy submitted a claim to the International Court in The Hague calling for Germany to pay reparations from the time of the Second World War. The case was dismissed and the Hague court sided with Germany, stating that Italy’s claim had “violated Germany’s sovereignty”.
Another country that has revived the subject of reparations is Greece. Despite the unprecedented restructuring of its external debt in 2012, Greece is still one of the leaders when it comes to sovereign debt levels. At the end of the third quarter of 2013, the sovereign debt of all EU member countries in relation to their combined gross domestic product equalled 86.8 per cent. In the eurozone, this figure was 92.7 per cent, but in Greece it stood at 171.8 per cent. The situation is desperate for Greece. It has reached the point where rating agencies and international organisations have moved Greece from the category of “economically developed” to the category of “developing” countries.
In searching for a way out of the dead end, the Greek government has prepared a claim against Germany seeking reparation payments for the Second World War. Greece is not denying that it received a certain amount of reparations in the past. The first tranche of reparations was received at the end of the 1940s-beginning of the 1950s. For the most part, this was supplies of industrial products (machines, equipment) totalling 105 million marks (approximately $25 million), which at current prices equals €2 billion.
The second tranche of reparations arrived in the 1960s. In 1960, Greece and the Federal Republic of Germany signed an agreement whereby 115 million marks were given to Greek victims of Nazism. The payments were tied to the Greeks’ abandoning any additional claims for individual compensation.
In 2013, the National Council for German War Reparations, headed in Greece by war veteran Manolis Glezos, put the amount of damages at half a trillion euros. In March 2014, Greek President Karolos Papoulias once again demanded that Germany pay reparations for damage inflicted on the country during the war. Greece is claiming €108 billion euro as compensation for damages and €54 billion for loans issued to Nazi Germany by the Bank of Greece and never repaid. The total amount of reparation claims by Greece stands at €162 billion. At current price levels, this equals 5,000-6,000 tons of gold. At the Yalta Conference, you will recall, the amount of reparations referred to by Stalin for the Soviet Union equalled 10,000 tons of gold.
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The world is closely following the fate of Greece. Russian commentator Dmitry Verkhoturov writes the following on the possible demonstration effect of this initiative: “Claims for German reparations could be put forward by Cyprus, say, which was occupied by Germans during the war, or Italy, which, after the fall of Mussolini’s regime, was occupied by Germans, and fighting broke out on its territory. If things aren’t going too well for France, then it could also demand payments from Germany for occupation and destruction. And what about Belgium, Holland, Luxembourg, Norway, and Denmark? Great Britain could also demand payment for the consequences of fierce bombing campaigns. It would be hard for Spain to substantiate its claims against Germany, but it’s possible to think up something, maybe blaming Germany for damage inflicted during the civil war (1936-1939), for example. If events develop along the ‘Greek path’, then in a few years time only memories will remain of the European Union.”
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There is reason to believe that on the threshold of the 70th anniversary of victory over German fascism, the West is attempting to rewrite the history of the Second World War, deny the decisive contribution made by the USSR in the victory over Nazi Germany, and include the Soviet Union as one of the main initiators of the war, all of which will be crowned with the presentation of Russia as the successor to USSR reparation claims: something like – the Red Army did not liberate Europe, but seized, enslaved and destroyed it.
The destroyed Soviet city of Stalingrad
To prevent this, Russia needs to locate all the documents of the Extraordinary State Commission for Damages that was in operation in the Soviet Union during the war (full name – the Extraordinary State Commission for ascertaining and investigating crimes perpetrated by the German-Fascist invaders and their accomplices, and the damage inflicted by them on citizens, collective farms, social organisations, State enterprises and institutions of the USSR), materials from the Yalta and Potsdam Conferences in 1945, documents of the Council of Foreign Ministers of the victorious powers, and the USSR’s bilateral agreements as part of the 1947 Paris Peace Treaties with countries who fought on the side of Germany. At most, Germany’s reparation payments and deliveries covered just 3-4 per cent of the damage inflicted on the Soviet Union, according to the amount of damage determined by the Extraordinary State Commission.