Greek men murdered by German paratroopers in Kondomari, Crete in 1941.
In early April of 1941, the German army defeated Greek forces along the country’s northern front. Where Greece had spent the previous winter in jubilation after successfully fending off the Italians, they now experienced existential horror at the inevitability of occupation by the Axis powers. The terror was so strong, in fact, that the prime minister shot himself just days before the Germans marched into Athens.
And the three-year occupation of Greece did indeed prove to be hell on Earth, most notably for the famine that wiped out more than 300,000 citizens, but also because it hosted some of the worst atrocities committed by German troops during the war. This included the raping and pillaging of villages, and the systematic execution of able-bodied men, and, in some cases, women and children.
The occupation of Greece tore the nation apart so much that when Axis powers left in 1944, the country soon broke out into a three-year civil war over the ensuing power vacuum.
Today, more than 70 years since the beginning of the occupation, Greeks and historians are pointing out that, aside from the question of unpaid reparations, Germany still owes Greece on two other counts: debt owed on a forced loan Germany took from Greece, and the returning of ancient artifacts stolen during the occupation.
Last April, Syriza, Greece’s second largest party, raised the issue with Greek Minister of Foreign Affairs Dimitris Avramopoulos. Avramopoulos agreed that the matter must be decided once and for all by an international court. It was the first time a Greek official had publicly made such an announcement.
Experts are estimating that, all told, Germany owes approximately €162 billion ($211.5 billion), including interest. However, the general accounting office in Greece refuses to make the number they’ve come up with public.
As of right now, Germany is remaining tightlipped. Their minister of finance, Wolfgang Schauble, is brushing the issue off, simply telling reporters that the debt was settled years ago. He said that Greece should stay focused on the path to reform, which includes the €240 billion bailout—accompanied by several waves of admittedly ineffective and crippling austerity measures—Greece took to pull itself out of debt.
Manolis Glezos, Syriza MP and journalist, during an interview at his home office.
Schauble’s comments were news to Manolis Glezos, an MP for Syriza who has been fighting for reparations and the repayment of debts since 1946. Glezos became an international hero when, in 1941—a month into the occupation—he and a friend snuck up to the Parthenon and stole the Nazi flag. He was later captured, tortured, and sentenced to death—not for the last time.
In response to Schauble’s statement, Glezos made some official comments of his own: “When was it over? How was it over? And why?” Schauble didn’t respond to Glezos, who I sat down with at his home for a two-hour interview. “Actually, for Schauble to make this statement means that he is cornered,” Glezos told me. “And of course he tries to escape this issue by using different tricks.”
Schauble may or may not have been alluding to the Two Plus Four Treaty of 1990, which, according to a representative at the German Embassy in London, brought about “a final regulation of legal and international issues concerning Germany and WWII. It was made clear that there will be no further peace treaty or reparations issued after that treaty. The treaty was accepted in the Charter of Paris on November 21, 1990 by all CSCE [Conference on Security and Co-operation of Europe] countries, including Greece.”
I read over both documents and neither, to the best of my understanding, mention anything about World War II or reparations. When I pointed this out to the embassy contact, his reply was rhetorically disappointing.
“I’m not sure it’s actually in the treaty, Gregory,” he emailed me. “But it was a general understanding of all the parties involved that this treaty should be the final word on all legal and political matters connected with WWII. That’s why it was put to the approval and endorsement of the CSCE conference in Paris two months later.”
The rounding up of Jews in Thessaloniki in July of 1942.
If this were the case, you would think that the treaty or the charter would mention such understandings specifically. The closest thing I can find in the actual charter in which any connection to forgetting all about WWII might be construed comes in the opening lines: “Europe is liberating itself from the legacy of the past.” Equivocal at best. Although the charter also mentions this: “Economic liberty, social justice, and environmental responsibility are indispensable for prosperity.”
If history and legal records show that Greece is indeed the only country yet to be fully compensated by Germany after WWII, then the notion of social justice certainly does come to mind.
Schauble, in his comments, might have also been alluding to a 1960 payment made to Greece in the spirit of reparation for 115 million deutsche marks (about $77 million). But, as German historian Hagen Fleischer pointed out in an interview with Deustch Welle, “The Netherlands, which suffered much fewer losses, received a larger amount of money.”
Fleischer, among other legal experts, believes the forced loan should be Greece’s sole focus at this stage. Early on in the war, Germany and Italy actually forced the Greek government to help finance the occupation. The loan was legally drawn up, and Greece forked over billions of drachmas on a monthly basis. In fact, as evidence of the loan’s legitimacy, Germany made a few payments before the war was even over, and now—if you tack on interest to all those years—the remaining balance is staggering.
Yiannis Stathas, Syriza MP.
“It’s not about the money; it’s about humanity,” said Yiannis Stathas, an MP for Syriza who presents himself as a representative of the working class. “It’s like if I were going to kill someone and not be punished for it.”
Stathas is from Distomo, one of the worst sites of German brutality. On June 10, 1944, Axis troops, frustrated at the resistance from nearby guerrilla factions, invaded the village and murdered 218 people, including pregnant women, babies, and the village priest. The bloodbath still haunts the village today. Stathas remembers his grandmother and the rest of the women in her generation always wearing black clothes, and has stories about a lot of people who suffered psychological fallout, losing their minds in the years after the massacre.
None of the soldiers involved in the massacre ever faced any sort of punitive action.
“This isn’t just a matter for Greece, but a global issue,” Stathas told me.
During our sit-down in his office, Stathas explained that this is a separate issue from the economic crisis and the austerity measures Greece has been struggling with the past few years. To connect the two would send the wrong message, he said. “The people who have committed these crimes must pay so that justice can be served. In this way, people who are planning to do such crimes again must know they will be punished.”
Stathas mentioned that particular extreme groups—not unlike the Golden Dawn, with its fascist leanings and neo-Nazi links—typically arise during periods of economic strife. “We should send a message to these people,” he said.
Glezos went on to suggest alternative ways in which the German debt might be paid back, such as Germany providing free education to Greek students or covering the contracts of its public works companies in Greece.
German troops raise the Nazi flag on top of the Parthenon in Athens in May of 1941.
“We don’t want to grab Germany by the neck or put them in a noose, only to come and discuss with us how they will repay these loans,” Glezos said. “We don’t hate the German people, but even if they owed one single mark, they must pay it as a guarantee that, in the future, they will not commit such crimes again against humanity.”
Zoe Soteriou, a teacher in Athens, believes that most Greeks are afraid to push the issue, fearing that it could make a bad situation (the recession and austerity measures) even worse. “We want to react in a way, and everyone wishes to do it. However, people are afraid that the worst is coming toward us, that this is just the beginning of something bleaker,” she said. “Germany is at an advantage right now. They cut the pie and give out the pieces, and we are like beggars.”
Her colleague, Christos Kribas, agrees that perhaps to approach the issue now is bad timing. “You must have face value. Right now, unfortunately, we’re not much,” he said, mentioning that Greece currently has a bad reputation. “We have to shake this image. We shouldn’t have unrealistic goals, but to be practical. Politics is a give and take dynamic—not ‘I want this,’ or ‘I want that.'”
Owner’s epilogue: Greek citizens have dealt with the disaster in their country and their lives with remarkable resilience, patience and dignity. For this alone, they deserve the utmost respect.
I have to thank my classmate Yannos for this insightful remark.
ATHENS – A visit to Greece leaves many vivid impressions. There are, of course, the country’s rich history, abundance of archeological sites, azure skies, and crystalline seas. But there is also the intense pressure under which Greek society is now functioning – and the extraordinary courage with which ordinary citizens are coping with economic disaster.
Inevitably, a visit also leaves questions. In particular, what should policymakers have done differently in confronting the country’s financial crisis?
The critical policy mistakes were those committed at the outset of the crisis. It was already clear in the first half of 2010, when Greece lost access to financial markets, that the public debt was unsustainable. The country’s sovereign debt should have been restructured without delay.
Had Greece quickly written down its debt burden by two-thirds, it would have been able to shed its crushing debt overhang. It could have used a portion of the interest savings to recapitalize the banks. It could have cut taxes, rather than raising them. It could have jump-started investment and gotten its economy moving again, if not in a matter of months, then, with luck, in no more than a year.
In its official post-mortem on the crisis, the International Monetary Fund now agrees that debt restructuring should have been undertaken earlier. But this was not its view at the time. Under the leadership of Dominique Strauss-Kahn, the Fund was in thrall to the French and German governments, which adamantly opposed debt relief.
The European Commission, for its part, has rejected the IMF’s mea culpa. Preoccupied by the state of the French and German banks, it continues to argue that delaying debt restructuring was the right thing to do. It has no regrets about throwing Greece to the wolves.
Given this opposition, the Greek government would have had to move unilaterally. Hindsight suggests that the authorities should have done just that. Faced with foreign opposition, the government should have announced its decision to restructure as a fait accompli.
Clearly, there would have been risks. The “troika” – the IMF, the European Commission, and the European Central Bank – might have refused to provide an aid package, forcing Greece to compress imports even more sharply. The ECB might have cut off emergency liquidity assistance, forcing the government to impose capital controls and even consider abandoning the euro.
But, by acting preemptively, Greek leaders could have shaped the dialogue. They could have said to their EU colleagues, “Look, we have no choice but to restructure what is clearly an unsustainable debt. But make no mistake: our preference is to remain in the eurozone. We are committed to reforms. Given this, don’t you agree that we are deserving of your support?”
Making a compelling case would have required Greece to get serious about those reforms. The government could have started by bringing together employers and unions to negotiate an equitable burden-sharing agreement, including an across-the-board reduction in wages and pensions, thereby getting a jump on internal devaluation. This could then have been complemented by a simultaneous agreement to restructure private debts. With everyone accepting sacrifices, it might have been possible to reach an accord on liberalizing closed professions and on comprehensive tax reform.
But, instead of working together with its social partners, the government, heeding the troika’s advice, dismantled the country’s collective-bargaining system, leaving workers unrepresented. Greece thus lacked a mechanism to negotiate a social compact to cut wages, pensions, and other obligations in an equitable way. With every vested interest fighting for itself, closed professions proved impossible to pry open. Doubting that there would be shared sacrifice, those same interest groups were unable to negotiate meaningful tax reform.
With the Greek government thus failing to push through structural reforms, it was unable to earn the trust of its creditors; and, skeptical that the government was committed to reform, the troika demanded a pound of flesh, in the form of front-loaded austerity, as the price of assistance. Those front-loaded tax increases and government-spending cuts plunged the economy deeper into recession, making a farce of claims that the public debt was sustainable – and forcing the inevitable debt restructuring after two more agonizing years.
Greece is now seeking to make the best of a difficult situation. It is attempting to breathe life into the campaign for structural reform. It is lobbying the troika for further debt relief. But the damage will not be easily undone. Past mistakes, committed not just by Greece, but also by its international partners, make a difficult short-term future unavoidable.
It is important that other countries draw the right lessons. If they do, Greece’s brave, beleaguered citizens can at least take comfort in knowing that many people elsewhere will be spared the same unnecessary sacrifices.