German, Greek tensions extend to World War II dispute

The already strained relationship between Germany and Greece took another acrimonious turn this week, with a dispute over a Nazi-era war tab momentarily overshadowing bailout negotiations.

First, Greek Prime Minister Alexis Tsipras on Tuesday blasted Germany for allegedly refusing to settle on the debt related to the Nazi occupation of Greece during World War II. "Germany has never properly paid reparations for the damage done to Greece by the Nazi occupation,” Tsipras said.

Then on Wednesday, Greek Justice Minister Nikos Paraskevopolous said that he was prepared to follow through on an existing Greek court ruling from 2000 that would allow the government to seize German state-owned property in compensation for a Nazi massacre on a small Greek village more than seven decades ago.

In response to the Greek announcement, a German government spokesman said Wednesday that Greece should focus on its predicament now and that past accounts had been straightened out.

“We should concentrate on current issues and, hopefully, what will be a good future,” said Steffen Seibert, Chancellor Angela Merkel's spokesman. “It is our firm belief that questions of reparations and compensation have been legally and politically resolved.”

Germany considers its 1960 payment of approximately $62 million to Greece for World War II reparations to be sufficient, but many Greeks say the actual war debt is far greater. One 2013 Greek government study tagged the debt due to Nazi property destruction and raiding of state coffers at about $171 billion.

Over the last few decades, Greek politicians and private initiatives have periodically tried to raise the issue of reparations. But it has gained new traction since the Greek financial crisis and, more recently, with the election in January of the Syriza bloc, a coalition of leftist parties that campaigned on a pledge to scrap the eurozone bailout deal.

While the spat over wartime debt may not alter the ongoing talks between Athens and its eurozone partners over a new debt arrangement, it highlights the degree to which Germany and Greece remain at loggerheads.

But whether or not the specific dispute over Nazi crimes is ever resolved, some commentators have pointed out another relevant lesson from just after World War II: Namely, Berlin has itself been the recipient of large-scale debt relief.

“As the Greeks point out, debt relief is normal,” Martin Wolf, chief economics commentator for the Financial Times, said in January.  “Germany, a serial defaulter on its domestic and external debt in the 20th century, has been a beneficiary.”

Writing for Al Jazeera America last month, Paul Hockenos noted that Germany incurred “massive debts stemming from the war and the Holocaust.” The nation then “received aid from the United States under the Marshall Plan in 1948, and West Germany was granted generous relief at the London conference in 1953: Half its debt was forgiven.”

Germany, the eurozone’s largest creditor nation, has hewed tightly to the terms of the more than $240 billion worth of bailouts that put stringent fiscal austerity requirements on Athens, including high taxes and dramatically reduced spending. Many Greeks blame these onerous terms for the country’s economic malaise. Greece’s 26 percent unemployment is the highest among all eurozone nations.

Earlier this month, the Greek government agreed to a four month extension to the bailout arrangement, seemingly walking back some of its election promises. Athens still hopes to change the long-term economic arrangements it has struck with its European creditors.

Some in Germany agree with Greece. Annette Groth of Germany’s Left party said Berlin should honor a multi-billion euro loan Nazi Germany forced the Bank of Greece to make.

"It is Germany's moral duty to pay the money, even if there are different opinions on international law," she told Reuters.

With Reuters