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Officials brief MPs on German forced wartime loan

Estimate expected by year's end

A special finance ministry working group has amassed 50,000 documents as part of its effort to calculate the present-dauy value of a loan Greece was forced to pay to its German occupiers during the second world war

The German occupation authorities, pictured here atop the Acropolis in 1941, forced the Greek collaborationist government to pay for the costs of occupation (Photo: German Federal Archive, 101I-165-0412-14A) The German occupation authorities, pictured here atop the Acropolis in 1941, forced the Greek collaborationist government to pay for the costs of occupation (Photo: German Federal Archive, 101I-165-0412-14A) An official estimate of the present-day value of a loan that Greece was forced to pay to its German occupiers during the second world war should be ready by the end of the year, a special finance ministry working group told MPs on Thursday.

The forced occupation loan was imposed by the occupying German and Italian forces on Greece under the terms of a unilateral decision which they took in Rome on 14 March 1942, and which was subsequently presented to the collaborationist government in Athens.

Under the agreement, the Germans and Italians forced the collaborationist government to pay them 1.5bn drachmas per month in occupation costs. About nine months later, the amount of the forced loan was raised to 8bn drachmas on a monthly basis, which was supposed to be repaid at a later stage to Greece with a zero interest rate.

Addressing parliament's interparty committee on German reparations, Panagiotis Karakousis and Vassilios Manesiotis from the working group briefed MPs on the method they are using to collect information on how to evaluate the extent of the loan.

They said they converted the total amount the German troops received from the Bank of Greece during the Nazi occupation into 1941-value US dollars because the dollar was the only relatively stable currency at the time.

They said they will begin calculating the interest on the originally disbursed amount from 1 January 1945, with an interest rate based on the average return of ten-year US treasury bills. 

According to some reports, Karakousis told the MPs that a realistic estimate of the present value of the loan would be $12–13bn or €10bn, considerably less than the €54bn figure mentioned in a leaked finance ministry report from April 2013. 

The two officials said the group had collected 45,000 documents from the foreign ministry, 761 files from the General Accounting Office and 5,000 documents from the State Legal Council. They estimated the final report will be ready by 31 December 2014 and will include an assessment of all the types of German reparations.

In response, the parliamentary committee members said they would not issue their report until they have the working group's report, which will look only at the forced loan and not the seperate issue of reparations.

The German government has repeatedly said it has no more wartime obligations to Greece, arguing that a 1960 agreement settled all claims for reparations definitively. How, observers point out that German officials usually refer to reparations, and not the forced loan, when commenting on the issue.

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