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Germany, Greece and Franco’s Blue Division

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COMMENT: Over the years, we have been priv­i­leged to fea­ture Lucy Komis­ar as an expert com­men­ta­tor on mat­ters eco­nom­ic, “off­shore” busi­ness mat­ters, in par­tic­u­lar. At a recent address by Ger­man Finance Min­is­ter Wolf­gang Schauble (giv­en to the Coun­cil on For­eign Rela­tions) Lucy braced the vet­er­an politi­cian over Ger­many’s hypocrisy con­cern­ing Greek debt. Schauble’s equiv­o­ca­tion on the issue did not shake Lucy’s efforts to pin him down. In the arti­cle below, do note the obser­va­tions of Albrecht Ritschl, pro­fes­sor of eco­nom­ic his­to­ry at the Lon­don School of Eco­nom­ics.” . . . .  Ritschl said, “If we accept that Germany’s nation­al prod­uct is some­where to the tune of over 2 tril­lion euros, which is beyond 2.5 tril­lion U.S. dol­lars, we would be talk­ing about a default and debt for­give­ness of some­where in the range of 10 tril­lion dol­lars. I would tend to think that this is prob­a­bly unri­valed in 20th cen­tu­ry his­to­ry. . . . .”

Some back­ground infor­ma­tion to flesh out lis­ten­ers’ under­stand­ing of these issues can be found in an intro­duc­tion to the anti-fas­cist books avail­able for down­load on this web­site. Oth­er posts and pro­grams have dealt with the issue of Ger­many, the EMU, Greece’s debt and the Third Reich’s eco­nom­ic exploita­tion of “the cra­dle of democ­ra­cy.” The polit­i­cal, his­tor­i­cal and eco­nom­ic dynam­ics under­ly­ing Greece’s per­ils exem­pli­fy why we so often cite the pri­ma­ry impor­tance of the Bor­mann cap­i­tal net­work. Be sure to click on the link below to hear Lucy’s ques­tion at the CFR talk, as well as links to an impor­tant inter­view with Albrecht Ritschl.

Note that Schauble does not feel that Ger­many owed Greece many bil­lions of euros, because a gov­ern­ment need­n’t ful­fill oblig­a­tions incurred by pre­vi­ous regimes. His claim is under­mined by Ger­many’s pay­ing of pen­sions to vet­er­ans of the Blue Divi­sion that fought for Ger­many on the East­ern Front.

“Ger­many Is Still Pay­ing Pen­sions for Spain’s For­mer Nazi Vol­un­teers” by Svati Kirsten Naru­la; Quartz; 11/05/2015.

The Ger­man gov­ern­ment pays about €100,000 ($109,000) annu­ally in pen­sions to 50 sur­viv­ing mem­bers and rel­a­tives of Spain’s Blue Divi­sion, the vol­un­teer army that assist­ed Hitler’s inva­sion of Rus­sia dur­ing World War II. Law­mak­ers dis­closed this fact dur­ing recent dis­cus­sions in Bun­destag, Germany’s nation­al par­lia­ment, prompt­ed by ques­tions from left-wing min­is­ter Andrej Hunko.

It is “a scan­dal,” Hunko told the press, “that 70 years after the war, Ger­many is still pay­ing more than €100,000 a year to Nazi col­lab­o­ra­tors.” The exact fig­ure was €107,352 this year, allo­cated to 41 sur­viv­ing sol­diers, eight wid­ows of for­mer sol­diers, and one orphan of a for­mer sol­dier.

“Those peo­ple vol­un­teered to join the Ger­man fas­cists to fight on their side in the war of exter­mi­na­tion in east­ern Europe,” said Hunko. “For me it is incom­pre­hen­si­ble that the Ger­man gov­ern­ment should stick to those pay­ments when so many vic­tims of the war are still wait­ing today for their right­ful com­pen­sa­tion.”


Accord­ing to WWII His­tory Mag­a­zine, the Spaniards who signed up for the Blue Divi­sion (so named for the col­or of Spain’s Fas­cist par­ty) “were prob­a­bly World War II’s most pure­ly ide­o­log­i­cally moti­vated sol­diers.” They were recruit­ed to fight on the East­ern front only, against Sovi­et Com­mu­nism, in what some his­to­ri­ans regard as a shrewd move by Span­ish dic­ta­tor Fran­cisco Fran­coto remain on good terms with Italy and Ger­many, which had assist­ed Fran­codur­ing the Span­ish Civ­il War, while remain­ing “neu­tral” and avoid­ing con­flict with Allied forces. The Blue Divi­sion report­edly con­sisted of 47,000 Span­ish vol­un­teers.

In 1962, Ger­many and Spain agreed that Blue Divi­sion mem­bers who had been injured in com­bat, their wid­ows, and their orphans would receive pen­sions from Ger­many. In exchange, Spain would pay a stipend to wid­ows of Hitler’s Con­dor Legion.

“Ger­man Finance Min­is­ter Schauble Spins Why Greeks Have to Pay Back Loans and Ger­many Does­n’t” by Lucy Komis­ar; The Komis­ar Scoop; 4/18/2015.

Ger­man Finance Min­is­ter Wolf­gang Schäu­ble spoke at the Coun­cil on For­eign Rela­tions on Wednes­day. With a politician’s prac­ticed spin, he declared that Ger­many didn’t owe any mon­ey from bil­lions it had extort­ed from Greece dur­ing its World War II occu­pa­tion, because for a peri­od after the war, it had no sov­er­eign gov­ern­ment. WHAT!

Lucy asks Schäu­ble to explain dif­fer­ence in moral­i­ty of Ger­mans and Greeks repay­ing debts.

Accord­ing to Forbes, the amount owed to Greece, with­out inter­est, in today’s mon­ey, would amount to $14 bil­lion. With inter­est at 3% over 66 years, that would come to at least $95 bil­lion.
The Greek debt is $341 bil­lion. The lat­est cliff-hang­er debt repay­ment to the IMF was $486 mil­lion. Done with mon­ey that could have gone to health care, pen­sions, jobs. Do the math.
I asked Schäu­ble: “What is the moral dis­tinc­tion between the oblig­a­tion of Greece to pay back loans that were nego­ti­at­ed by pre­vi­ous cor­rupt gov­ern­ments and Germany’s oblig­a­tion to pay back the loan that the Nazi gov­ern­ment extort­ed from Greece?”


On Greece pay­ing its debts, he said: “The prob­lem of Greece is not the prob­lem of whether for­mer Greek gov­ern­ments have been a bet­ter legit­imiza­tion than the giv­en gov­ern­ment. That is always in democ­ra­cies. The peo­ple elect in a par­lia­ment or a pres­i­dent and then this is a giv­en gov­ern­ment, and the next gov­ern­ment has to take lia­bil­i­ty from the for­mer gov­ern­ment. Oth­er­wise, you can’t—it’s dif­fi­cult to get the world in a—in a civilized—(inaudible).

“Whether Greek gov­ern­ments have been cor­rupt or not, it’s not the sub­ject to be judged by oth­ers. And of course, we know fight­ing cor­rup­tion is not only in Greece a prob­lem, but in a lot of mem­ber states.

“But hav­ing said this, the prob­lem of Greek is not the loans giv­en. The prob­lem of Greece is the lack of com­pet­i­tive­ness. And the prob­lem of Greece is that Greece has enjoyed, since hav­ing joined the Euro­zone, low inter­est rates. And they didn’t use this oppor­tu­ni­ty to increase their com­pet­i­tive­ness, what has been the assump­tion in join­ing the Euro­zone.”

Wolf­gang Schäu­ble answers Lucy’s ques­tion.

But on Ger­many pay­ing its debts, every­thing was reversed. “So what is the Ger­man, you can’t—would you real­ly com­pare a for­mer Greek gov­ern­ment with the Nazi—with the Nazi times? It makes no sense.”

Does he mean that if a gov­ern­ment is real­ly bad, crim­i­nal, mur­der­ous, geno­ci­dal, it doesn’t have to pay its debts?

Schäu­ble: “And hav­ing said, I would like—I have been born in 1942. I have the mem­o­ry that in—since 1945, Ger­many had not any sov­er­eign­ty. We had—it was—in some way it was some­thing like—(chuckles)—the end of Ger­man his­to­ry as a state. And we only regained our full sov­er­eign­ty in 1990—in 1990—on the start of Octo­ber, 1990.

“And what we have to—what we have—how we had to deal with our ongo­ing respon­si­bil­i­ty for our past. And I feel strong­ly respon­si­ble for the her­itage of Ger­man his­to­ry, to be very clear. But you can’t mix it, the one with the oth­er. And we have inter­na­tion­al rules. We have inter­na­tion­al law. We have inter­na­tion­al courts. We accept all deci­sions of inter­na­tion­al courts, even the crim­i­nal court.

“Not any well-admired mem­ber state does accept mem­ber­ship in the Inter­na­tion­al Crim­i­nal Court, by the way. For exam­ple, we do—of course, we do, Ger­man. But hav­ing said this, it’s noth­ing to be com­pared. I’m sor­ry. I have no idea to com­pare this.”

I have been read­ing and reread­ing his answer. And I am dizzy. Are you dizzy yet?

The idea is that because Ger­many was defeat­ed in 1945 and was no longer a state, its debts until 1990 don’t count. So what hap­pened about the part that a gov­ern­ment takes lia­bil­i­ty from the for­mer gov­ern­ment? Except for Ger­many? Remem­ber that the Nazis were elect­ed. Not to men­tion that now the Ger­mans are very rich and one of its vic­tim coun­tries, which suf­fered mas­sive destruc­tion by the Nazis, is very poor.


And there are “inter­na­tion­al law” and “inter­na­tion­al courts” — which have con­ve­nient­ly been used to absolve Ger­many of its debts. The best expla­na­tion of the “get out of debt free” card I’ve seen is by Albrecht Ritschl, pro­fes­sor of eco­nom­ic his­to­ry at the Lon­don School of Eco­nom­ics. He says this in an inter­view with Michael Nevradakis, a U.S. Ful­bright Schol­ar in Athens.

Albrecht Ritschl, pro­fes­sor of eco­nom­ic his­to­ry at the Lon­don School of Eco­nom­ics.

After WWII: “The first thing the occu­pa­tion author­i­ties did was to block all kinds of claims by and against the Ger­man gov­ern­ment, under the legal fic­tion that that the Ger­man gov­ern­ment and the Ger­man state didn’t exist any­more.”

The U.S. blocked claims on the Ger­man war debt “through an inge­nious and slight­ly mali­cious device: Whichev­er coun­try want­ed to receive Mar­shall aid from the Amer­i­cans under the Mar­shall Plan had to sign a waiv­er waiv­ing all kinds of finan­cial claims against Ger­many from World War II against Mar­shall aid.

“This means that it would not be entire­ly blocked, but it would have to [be] put on hold until post­war Ger­many had paid off its Mar­shall aid from the Unit­ed States.

“In tech­ni­cal terms what that did was to make repa­ra­tion and cred­it claims against Ger­many from World War II junior, sec­ond rank, low­er in rank to Mar­shall assis­tance to Ger­many. And since every­body want­ed to get Mar­shall aid from Amer­i­ca, every­body grudg­ing­ly signed these waivers. So the sit­u­a­tion dur­ing the Mar­shall Plan peri­od was that all these debts still exist­ed on paper, but they were worth­less in the sense that the debt was blocked.”

The Lon­don Agree­ment on Ger­man Debt con­tin­ued to block claims. “In the ear­ly 1950s, nego­ti­a­tions were start­ed between West Ger­many and the cred­i­tor coun­tries about what to do with all of this. A solu­tion was found – basi­cal­ly imposed again by the Amer­i­cans and to some extent by the British – that did two things. First, it lumped togeth­er the war debts with the repa­ra­tions – which is not an innocu­ous step to take. Sec­ond, it used slight­ly fuzzy lan­guage, which is open to inter­pre­ta­tions, which said that set­tle­ment of these issues would be post­poned until after future Ger­man reuni­fi­ca­tion.”

Reuni­fi­ca­tion hap­pened in 1990. But still no pay­ment. Cir­cle back to the first point. The Ger­many that incurred the debt no longer exist­ed. And for­get the part about coun­tries being liable for the debts of for­mer gov­ern­ments.

The mon­ey Ger­many would owe is huge. Ritschl said, “If we accept that Germany’s nation­al prod­uct is some­where to the tune of over 2 tril­lion euros, which is beyond 2.5 tril­lion U.S. dol­lars, we would be talk­ing about a default and debt for­give­ness of some­where in the range of 10 tril­lion dol­lars. I would tend to think that this is prob­a­bly unri­valed in 20th cen­tu­ry his­to­ry.”


At reuni­fi­ca­tion, Ger­many got anoth­er “get out of debt free” card. Ritschl says, “In 1990. Ger­many received this kind of bap­tism cer­tifi­cate for a uni­fied Ger­many which is incred­i­bly sub­tly word­ed and whose only pur­pose was, appar­ent­ly, to pre­vent repa­ra­tion or resti­tu­tion claims against uni­fied Ger­many being raised on the grounds of the fact that there is a uni­fied Ger­man state now and that some­thing like arti­cle 5 of the Lon­don debt agree­ment could all of a sud­den be reac­ti­vat­ed.
“The Ger­man point of view is essen­tial­ly that the so-called 2+4 treaty of 1990 is not mak­ing any men­tion of any repa­ra­tions or wartime debts of Nazi Ger­many, and giv­en the fact that this issue is not cov­ered by the treaty, the issue is essen­tial­ly dead. This has con­sis­tent­ly been the posi­tion of the Ger­man gov­ern­ment. The Ger­man posi­tion has so far been quite suc­cess­ful . . . sev­er­al attempts to chal­lenge it in the Euro­pean court have been unsuc­cess­ful, and it seems to me that from a legal stand­point, there is rel­a­tive­ly lit­tle chance that this will be suc­cess­ful­ly chal­lenged.”
Pow­er trumps moral­i­ty every time.


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