Relations between Greece and Germany have worsened significantly since the election of Alexi Tsipras and his Syriza party to power in Athens. One of the key points of contention is whether Greece is still owed reparations for the damage suffered during the Nazi occupation during the Second World War.
Why do the Greeks want compensation?
The first argument relates to compensation for war crimes. During World War II, Germany and Italy conquered Greece in the spring of 1941. In addition to military casualties, around 20,000 civilians (exact numbers are fiercely disputed) were killed and whole villages where destroyed by the German troops – the massacres at Kalavryta and Distomo are particularly notorious.
The second part of the claims relate to direct and indirect financial costs suffered by Greece. At the time of the war, the Hague Convention, in place since since 1907, accepted that the occupied state should pay for living expenses and maintenance of occupying troops.
However the Greek treasury was subjected to costs of 476 million reichsmarks, higher even than the maximum previously agreed by the Axis powers of Germany and Italy. The enslaved Greek government had no choice but to hand over the cash which was used to fund Nazi campaigns in north Africa.
What was agreed after the war?
After the defeat of the Nazis, the Paris Peace Treaties of 1946 defined the war reparations that the various countries involved would have to pay.
Greece received $105 million from Italy (slightly more than the Soviet Union) and $45 million from Bulgaria. But Germany did not conclude such a peace treaty before 1990, since it had been split in two – West and East.
Nevertheless, the Paris Compensation Agreement established that Greece should receive 2.7% of total cash compensation paid by Germany and 4.35% of the transport industry, ships or other payment in kind. In effect this allocated $7.1 million at 1938 market value, around half of what Greece had demanded.
In February 1953 another pact, known as the London Agreement, was signed, which covered the general debts of defeated Germany to the winners – the Allies.
The prewar German debt was cut by about 50% and the time (West) Germany had avaliable to repay was extended to 30 years. As for the the actual war debt, this was determined separately for each country (usually there was an agreement for a 50% cut but there were exceptions, for example the “moral” debts of Germany to Israel were not reduced at all).
After 1953, West Germany came to various agreements with individual states to pay additional compensation. In 1960 Germany agreed with Greece to pay 115 million DM to Greek individuals who were victims of the German occupation.
In total, Germany has paid around EUR 72 billion in war reparations, according to Reuters.
What do the Greeks want now?
According to an article in German magazine Spiegel , it is estimated that Germany owes Greece to 108 billion euros to rebuild damaged infrastructure and 54 billion for the forced occupation loan extracted from the Greek government.
The total amount of EUR 162 billio would represent 80% of current GDP and a large chunk of the EUR 240 billion bailout given to Greece by the EU and IMF.
There is further debate over whether interest is also owed on these amounts.
What is the German position?
The German Government insists that there are no outstanding payments as everything was settled in a treaty leading up to the country’s reunification in 1990.
The London debt agreement deferred settlement of the reparations question including the repayment of war debts and contributions imposed by Germany during the war to a conference to be held after unification. But this conference never took place and the Germans have steadfastly refused to reopen the issue.
Instead, a so-called 2+4 Agreement was concluded, which settled the renunciation of reparations claims, but only with the four Great Powers (Britain, Russia, the US and France) among the former Allies.
This 2+4 Agreement could be seen to have superceded the London Agreement and reopened possibilities for states and individuals to revive claims which were put aside in 1953. However, Germany insists that Greece did not raise this interpretation at the time and accepted that the issues were closed.
Berlin also claims that, 70 years after the war, any such claims have long-since “lost their justificatory basis.”
On the other hand, Greeks say that their requirements are inalienable and exist no matter the time has passed. The Greeks say that they never gave up their legitimate rights to these reparations.
READ TREATY ON THE FINAL SETTLEMENT WITH GERMANY HERE