Germany Pledges $5.2 Billion for Slave Laborers

Professing shame and remorse for the crimes of the Nazis, German Chancellor Gerhard Schroeder on Friday heralded a $5.2-billion compensation pact for World War II slave laborers as long-awaited closure on an era “that left an undying mark on the hearts and minds and souls of mankind.”

The agreement settling class-action lawsuits more than 60 years after the Third Reich first enslaved workers “will take U.S.-German relations to new heights in the new millennium,” said Secretary of State Madeleine Albright, who was in the German capital for a foreign policy meeting. She assured German officials that “they have done the right thing.”

Estimates of the number of survivors eligible for compensation range as high as 2.3 million, but many details of how the payments will be distributed remain unresolved.

A breakthrough in the nearly yearlong negotiations conducted by U.S. Deputy Treasury Secretary Stuart E. Eizenstat and former German Economics Minister Otto Lambsdorff came earlier this week when President Clinton intervened to press Schroeder to settle the issue before the end of the year.

The average age of former slave and forced laborers is nearly 80, and 10% of the survivors die each year, Eizenstat said. He argued that a swift settlement had become more important than a potentially more lucrative one later for which “there would be no beneficiaries left to receive payments.”

Creating more pressure for the German negotiators, the American Jewish Committee recently published the names of 255 German companies known to have used slave labor during World War II but which have yet to promise any contribution to the compensation fund.

By establishing the fund as the “exclusive remedy” for those with claims against German industry, German firms have effectively shielded themselves from further lawsuits in the United States as well as in the Eastern European countries where most of the surviving victims live.

The compensation fund, known as the Initiative for Responsibility, Remembrance and the Future, was established by Volkswagen and 11 other leading German businesses and banks earlier this year.

The number of firms pledging to contribute has risen to 65 or 70, said the German industry representative to the talks, Manfred Gentz of Daimler-Chrysler. He appealed to the other German companies that used slave labor and are still doing business to live up to their “moral responsibility” to shoulder a share of the costs.

An array of news conferences and ceremonies marked Friday as a day for both reflection on Germany’s dark past and expressions of hope that the nation will continue to confront the Nazi legacy despite the lifting of its legal burden.

In a moving moment of remembrance, German President Johannes Rau paid tribute to those who died at the hands of their Nazi captors and said he wished to “beg forgiveness in the name of the German people.”

Schroeder said Germany’s World War II atrocities “left a scar that we cannot heal, but perhaps we can ease the pain a little.”

The payments, expected to begin late next year, should provide elderly victims with a measure of financial and moral comfort in their last years, he said.

Neither industry nor the government has yet amassed anything near the 5 billion marks, or $2.6 billion, each has pledged to contribute to the fund. But Schroeder suggested that the state’s share might be raised by selling public assets, saying it would be fitting to use wealth accumulated by previous generations to pay the moral debt rather than levying taxes on today’s working Germans.

Former slave laborers--those the Nazi regime expected to work to death--are thought to number about 240,000, and they will be paid more than those who were considered forced labor. Forced laborers were regarded as valuable assets by the Third Reich and often were accorded better treatment.

Negotiators have talked of lump-sum payments to slave laborers as high as 15,000 marks, or nearly $8,000, but the amounts and their relation to forced-labor payments have yet to be decided.

Previously, Germany paid about $60 billion to Holocaust victims, but this is the first time that compensation will go to forced and slave laborers.

Negotiators will resume talks on the payment details early next year, in time for the German Parliament to enact enabling legislation and solicit claimants. Eizenstat said he doubted that payments would begin within a year, but Lambsdorff insisted that the bureaucratic obstacles could be removed quickly.

Lawyers for the victims were far from euphoric over the amount of the settlement, which will effectively shield German industry from future lawsuits over slave labor as well as resolve issues of unpaid insurance premiums and confiscated property and bank accounts.

“It is a limited amount of money for an array of evils this is supposed to cover,” said Barry Fisher of the Los Angeles firm Fleishman & Fisher, who represents European Roma and other non-Jewish victims of the Third Reich. But in view of the advancing age of the claimants, he said he had to give “a guarded yes” on the question of whether most would be satisfied.

The U.S. government has agreed to contribute $10 million to the fund to educate future generations of Germans about their country’s past, said Eizenstat, noting that “such a gesture will ensure that money is not the last issue.”