Ashes of WWII: Germany dismisses Greek demand for €279 bn

08 Apr 2015


India is not the only cash-strapped government seeking retro-taxes from wherever it can. Greece has demanded €278.7 billion from Germany in reparations for World War II – a demand that Germany dismissed on Tuesday.

Chancellor Angela Merkel's deputy, vice-chancellor Sigmar Gabriel who is the economy minister, called the demand a ''stupid'' distraction, even as the German opposition said Berlin should repay a forced loan dating from the Nazi occupation.

Greek deputy finance minister Dimitris Mardas made the demand on Monday, seizing on an emotional issue in a country where many blame Germany, their biggest creditor, for the tough austerity measures and record high unemployment connected with two international bailouts totalling €240 billion.

Gabriel said Greece had a vested interest in squeezing a bit of leeway out of its euro zone partners to help Athens overcome its debt crisis. "And this leeway has absolutely nothing to do with World War II or reparation payments," he added.

Gabriel leads the Social Democrats (SPD), the junior partner in the ruling coalition with Chancellor Angela Merkel's conservatives. Berlin is keen to draw a line under the reparations issue and officials have previously argued that Germany has honoured its obligations, including a 115 million deutsche mark payment made to Greece in 1960.

As Germany looked for a way to aid Prime Minister Alexis Tsipras's government and keep the eurozone intact, reparations demands were unrelated and made it easier for critics to balk at helping Greece, Gabriel said.

"This doesn't advance us one millimetre in terms of stabilising Greece," he said. "Honestly, I think it's dumb."

Long hangover
The number mentioned in parliament by Greece's 'alternate finance minister' Dimitris Mardas, which almost matches this year's German federal budget, extends a dispute that has flared as Greece seeks financing from eurozone partners while pledging to end the fiscal austerity that its leaders largely blame on Germany.

Germany's position, shared by the three parties in Merkel's government, is that the treaty reuniting East and West Germany and the post-Cold War Paris Charter, both signed in 1990, ended war reparations.

The government's view that the case was legally and politically closed had not changed, a Gernam finance ministry spokesman said.

Gabriel said, "If you bring two issues that have nothing to do with one another, both heavily burdened issues politically, into a single context, then you make it damned easy for those from whom you want something simply to exit the debate and say 'You can't do that'."

Greece would deliver a payment to the International Monetary Fund (IMF) this week and try to complete talks on economic changes needed to unlock more funding by a meeting of eurozone finance ministers on 24 April, international economic affairs minister Euclid Tsakalotos said.

"We're doing our best to reach a new deal for what we think is good not just for the average Greek, but for the average European," he added.

Greece, Europe's most-indebted state, is negotiating with eurozone countries and the IMF on the terms of its €240bn rescue. The standoff, which has left Greece dependent on European Central Bank (ECB) loans, risks leading to a default within weeks and its potential exit from the euro area.

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