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        A claim in need of ‘special treatment’: compensating for Greek tobacco seized by the German occupation authorities during World War II
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        A claim in need of ‘special treatment’: compensating for Greek tobacco seized by the German occupation authorities during World War II
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        A claim in need of ‘special treatment’: compensating for Greek tobacco seized by the German occupation authorities during World War II
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Abstract

Before World War II, tobacco was the most important Greek export, but just days after the German invasion in April 1941, the occupation authorities rushed to seize the tobacco production. While this article will document the seizure, most importantly, it will take a deeper look at how Greek tobacco producers and traders sought compensation for losses incurred as the result of the confiscation of their tobacco. It will also present how the German and the Greek postwar authorities handled these claims, taking into consideration Greek and German archival sources, which have hitherto been relatively neglected.

Introduction

Tobacco cultivation began to develop in Greece in 1913 after Eastern Macedonia and Thrace were annexed from the Ottoman Empire, and it expanded even further following the Asia Minor disaster in 1922, which led a large number of refugees, who specialized in tobacco production, to settle and work in Greek tobacco-producing regions. Due to its excellent quality, Greek tobacco quickly made its presence known in the international market, thereby becoming a ‘crucial commodity’ in the Greek economy. 1 However, the growth was curbed by the 1929 economic crisis. 2 Reduced demand resulted in large unsold stock, even forcing the Greek government to buy up and destroy more than 7,000,000 kilos of tobacco in the early 1930s. 3

The need for a more efficient export agricultural policy became evident. Having lost its share in the international markets, Athens turned to the German Reich, which, at the time, was ‘determined [. . .] to build a new trading system compatible with autarky’ by developing a network of bilateral clearing accounts with the countries of eastern and south-east Europe 4 whereby Germany's purchases were credited against offset purchases from German markets. 5 In practice, ‘Germany's exports to a recipient could only be paid for by Germany imports from that state’. 6 In 1934, the German tobacco company Reemtsma, one of the largest tobacco companies in Europe, authorized Dresdner Bank to notify the Bank of Greece of its intention to purchase Greek tobacco, albeit with a basic prerequisite for concluding the deal: low purchase prices. Athens accepted, fearing that ‘any greed in tobacco prices’ could turn the Germans away. 7

In reality, however, the Reich only wanted ‘[the] goods, not [the] custom’ of the countries it concluded clearing agreements with and eventually ‘got [its] way by running large trade deficits’. 8 Nevertheless, Greece's financial dependency on Germany continued due to its lack of competitiveness, ‘as no-one else would take Greek exports anyway’. 9 This was intensified even further by the need to finance Greece's industrialization and rearmament through export revenues and primarily by the sale of tobacco to Germany, 10 as tobacco was the main product of the Greek-German clearing. In the period 1935–9, tobacco exports reached 45,000 tons, with their value amounting to 47.1% of the total value of Greek exports. 11 The invasion of Greece in 1941 offered the German authorities the opportunity to continue ‘securing Greek tobacco for the German tobacco industry’, 12 this time completely on their own terms, by seizing the country's tobacco production.

The end of World War II left both tobacco producers and tobacco traders in a dire financial position due to losses they had suffered from the confiscation procedure, as well as the reduction in production; while in 1939 tobacco production amounted to 57,000 tons, during the period 1940–4 it plummeted to just 22,000 tons. 13 At the same time, the prospects of resuming tobacco exports were far from promising, as the international market now preferred American blends. The Greek state was in no position to compensate the tobacco producers and traders, any other professional group or the victims of the four-year occupation due to the country's anaemic state budget. 14 It acknowledged that the only assistance available, if indeed the war damages were going to be covered, were the reparations that Germany, as a defeated country, was obliged to pay.

The 1946 Paris Agreement on German Reparations awarded Greece only 25,000,000 dollars in reparations, which were paid in kind, mainly in the form of industrial equipment. These payments were intended to rectify the damage suffered by the Greek state, its infrastructure and its economy and not to compensate individuals affected by the war. Then the signing of the London Agreement on German External Debts in 1953 officially ended any possibility of raising war claims against the Federal Republic of Germany (FRG); from this point onwards, Bonn would proceed only with voluntary bilateral compensation agreements with other states. The Federal Republic concluded only two such agreements with Greece. The first one was signed in March 1960, as part of a larger European initiative, with Germany agreeing to pay 115,000,000 deutschmarks in compensation for the Greek victims of National Socialism. The following year saw a further agreement for 4,800,000 deutschmarks in compensation for Greek nationals for financial losses suffered as a result of tobacco seizures by the German occupation forces. This proved to be the last compensation agreement between the two states. Germany would never enter into further negotiations with Greece with regard to the payment of additional reparations to the state or compensation to other professional groups or broader categories of victims. 15

The tobacco seizure

Only days after Greece was invaded in April 1941, the German occupation authorities rushed to set up a meeting between representatives from the Reich's Finance Ministry, the German military command and German tobacco companies in order to determine how Greek tobacco would be used for the benefit of the German market. At this time, Greece had a 30,000-ton surplus of tobacco, from the 1939 crop or earlier, of which Germany had already bought approximately 17,000 tons before the outbreak of the Greek-Italian war. 1940 saw approximately 50,000 tons of tobacco produced and German officials expected the 1941 harvest to be on a par or even better, given that the occupation authorities were ready to take ‘all necessary measures’ in order to ensure unobstructed production. Taking into consideration ‘the expected changes in state or military domination’, which could lead to ‘the risk of complications and failures of German interests’ it was decided that the Greek tobacco should be seized directly. 16

An order signed on 18 April 1941 forced ‘all Greek tobacco producers and tobacco traders’, that is to say all tobacco holders, to surrender their tobacco to the German military command for sale. The purchase price would be the same as that paid by the German tobacco industry for the 1939 crop. 17 Tobacco holders would supposedly receive the same face-value sum, but in reality they were paid in deeply devalued drachmas. As the seizure process was inevitably delayed by the war, those who delivered their crops last were actually paid in money that had lost almost its entire value, resulting in even greater economic losses.

The seizure's commercial processing was assigned to Reemtsma, with the Austrian company Austria Tabakwerke AG and the Berlin-based Martin Brinkmann GmbH also participating in the process. 18 These companies acted under the command of the Reich as the tobacco's trustees and were responsible for evaluating it, paying producers and supervising its loading, export and delivery to Germany. 19 Reemtsma continued to collect Greek tobacco until March 1944, when Hermann Neubacher, the Special Representative of the Reich for the Southeast Area, assigned the completion of the seizure to the Wehrmacht. 20 The army's involvement was deemed absolutely necessary at this point, since ‘a small number of Greek tobacco holders had repeatedly escaped the obligation of surrendering their tobacco’. Moreover, even though the ‘German side had tried to avoid coercive measures’, this was no longer possible due to the dramatically increased need to supply the troops with cigarettes, a need that could be covered ‘only at the expense of Greek civil consumption’. 21

Claims and settlement

The first compensation claims made by Greek tobacco holders had already reached Reemtsma in 1945. 22 In 1946–7 the Greek government approached the American, British and French authorities occupying Germany and initially requested compensation for almost 2,000 tons of tobacco 23 but never received a definitive answer. 24 Even after the Federal Republic of Germany (FRG) was established in 1949, claims continued to be rejected on the grounds that relevant German legislation was lacking. It was only in 1954 that the Governments of the Federal Republic of Germany, the USA, Great Britain and France signed the Convention on the Settlement of Matters Arising out of the War and the Occupation (Vertrag zur Regelung aus Krieg und Besatzung entstandener Fragen) or, as it is more widely known, the Transition Agreement (Überleitungsvertrag). According to the Überleitungsvertrag, in order to recover property which was ‘removed [. . .] by the forces or authorities of Germany or its Allies or their individual members’, all interested parties had to file a claim to the Federal Agency for External Restitution (Bundesamt für äußere Restitutionen). A basic prerequisite for filing a restitution claim was that the seized goods in Germany be identified and that a request be lodged with any of the three allied authorities prior to the entry of the Überleitungsvertrag into operation. In cases where the claimed property had been destroyed or consumed, thereby rendering the recovery of the original property impossible, the holder was entitled to receive compensation. Decisions made by the Federal Agency could be appealed at the Arbitral Commission on Property, Rights and Interests in Germany (Schiedskommission für Güter, Rechte und Interessen). 25

Greek citizens whose property had been confiscated were quick to raise their claims. The majority of Greek cases were handled by the Greek-German lawyer George Constant[opoulos], who in November 1955 filed several claims to the Federal Agency for External Restitution requesting compensation for various goods seized by the German occupation authorities. These included the claims of almost a hundred and thirty Greek tobacco traders, 26 who demanded compensation for a total of 43,000 tons of seized tobacco. 27 However, the complexity and the high cost of the submission process 28 proved to be prohibitive for the tobacco producers, who lacked the means, connections and information to enable them to file their claims. The Agency made it clear that ‘the Greek tobacco traders’ applications had little chance of success’, 29 as none met the specific conditions set by the Überleitungsvertrag. These estimates had also reached the authorities in Athens, who were unable to hide their concern at the possibility of a massive rejection of the traders’ claims. Their fear was not unfounded, as almost all Greek applications submitted to the Federal Agency, up to this point, had been rejected on the same grounds. In order to prevent a negative outcome, the Greek Foreign Ministry turned to the German authorities asking for a comprehensive settlement of the tobacco traders’ claims. 30 The request was viewed favourably, with the federal ministries expressing the opinion that those particular claims could be the object of a ‘special treatment’, while even the possibility of a settlement was not out of the question. 31

In the years following the war, multiple Greek professional groups and individuals had turned to the Federal Republic asking for compensation for property losses, but all approaches had been rejected. This was therefore the first time that officials in Bonn actually considered the possibility of granting a claim. This change in attitude was due to political and financial motives. In 1951, a Greek-German commercial agreement was signed, following direct pressure exerting on Bonn by the United States. A particular emphasis was placed on Greek tobacco exports, the federal economics minister Ludwig Erhard assuring that the German cigarette industry would conclude firm purchase agreements with Greek tobacco traders, in return for which Athens would place several orders with various German industries. With the Federal Republic regaining its position as the largest importer of Greek tobacco in the 1950s, German officials feared that a rejection of the claim might have severe adverse effects on the Greek-German tobacco trade, while the risk of Greece cancelling large reconstruction equipment orders was also not to be ignored by the German side. 32 In fact, the federal authorities would soon realize that the implications might be even wider. During a meeting in June 1957 with the German ambassador to Greece, the Greek foreign minister, Evangelos Averoff, expressed his ‘bitterness [. . .] about the unfair treatment that the Greek desires and claims’ had faced in contrast to the treatment that Turkey, which he described as ‘the favorite child of the Germans’, had received through ‘extremely satisfactory private reparations amounting to half a billion deutschmarks’. 33 Combined with the fact that for the conclusion of the 1951 commercial agreement, the FRG had successfully demanded that Athens legally end any prosecution against all Germans accused as war criminals for fraudulent requisitions of tobacco during the occupation, 34 the Germans were able to envisage all the different ways a rejection might harm bilateral relations.

In a last effort to bypass the issue, the Federal Ministry of Finance asked the Greek authorities ‘whether there could be a legal regulation to prevent Greek citizens from filing lawsuits against German companies and individuals on issues that occurred during the German occupation of Greece’. 35 Apart from the applications that had reached the Federal Agency, a significant number of lawsuits against the FRG had also been filed at the Court of First Instance in Bonn, 36 while some tobacco traders had even resorted to legal action against Reemtsma in the Greek courts. 37 The Greek government expressed its ‘regret’ regarding the lawsuits, assuring the Ministry that if the matter ‘was in its hands, it would gladly have averted them in the interest of the progress of Greek-German economic relations’. ‘Unfortunately’, however, ‘there was no legal framework’ 38 that could ‘prevent Greek individuals from pursuing their claims in court’. 39 This reply sealed Bonn's decision to proceed to a settlement that, among its other advantages, would also resolve the issue in a controlled environment and under German terms, thereby eliminating the rather alarming prospect of leaving the handling of the claims to a random German judge, let alone a Greek judge.

However, the Greek government's interest in the claims proved short-lived. Despite the German side's readiness to enter into negotiations, Athens showed no similar interest, which did not go unnoticed by the Germans, who on their part, were trying to make it clear to everyone involved that their intention was to proceed to negotiations so as to reach a settlement. They also made it clear that the settlement only applied to the governments of the two countries and not to citizens. At this point, however, Bonn openly questioned Athens’ ‘willingness’ to reach a settlement. As German officials stated: ‘The fact that the Greek government [. . .] accepted the involvement of individuals in a case that was solely its issue, allows us to assume that there is only limited interest in a comprehensive settlement’. 40 These assumptions were soon officially confirmed. In a private meeting with Spiros Tetenes, the Greek commercial attaché in Bonn, the German Ministry of Foreign Affairs raised the issue of the settlement of the tobacco traders’ claims once again, to which Tetenes replied that ‘he had not received relevant instructions’ from his government. 41 It was therefore clear to the German authorities that they had to turn to the traders’ lawyers, particularly Constant, who for that matter ‘always appeared as the representative of both the Greek Embassy and the traders’. In fact, whenever the Federal Finance Ministry ‘had to settle various issues or negotiate with the Greek side, the Restitution Agency contacted Dr Constant first and subsequently informed the Greek embassy in Bonn of the results’. 42

Negotiations between the Greek tobacco traders’ representatives and the German authorities lasted for nearly three and a half years. German officials insisted on the withdrawal of all lawsuits filed against the Federal Republic in German courts as well as an explicit declaration from both the Greek government and the tobacco traders that no further compensation claims regarding Greek tobacco would be raised in the future. The Greeks, on the other hand, repeated that their objective was reaching a mutual agreement, as they ‘feared, quite rightly, [. . .] that an attempt to impose their compensation demands, which would probably also harm German tobacco companies, might have an extremely negative effect on commercial relations’. 43 The tobacco traders could not hide their anxiety, particularly over the reaction of Reemtsma, which remained one of the main importers of Greek tobacco.

Indeed, Reemtsma made no secret of the fact that the actions filed against it in the Greek courts were ‘a permanent burden, mainly for the purchase of tobacco from Greece, but also an unprecedented serious risk to the company itself’, 44 and demanded they be withdrawn on the grounds that the lawsuits were unfounded: the Paris Reparations Agreement of 1946, which Greece had ratified, determined that no claims for damages could be raised against ‘German governmental organizations’, 45 an attribute that Reemtsma was trying to appropriate on the basis of the argument that it had seized Greek tobacco while acting under the orders of the Reich. 46 Realizing, of course, that it was highly unlikely that the lawsuits would be withdrawn voluntarily, Reemtsma asked the German authorities that the settlement include a resolution for Greek individuals’ claims against the company. Officials in Bonn were not impressed by the request, emphasizing that the Greek claims were based on the Überleitungsvertrag and were therefore directed only against the Federal Republic. During the negotiations, there had been no discussion as to whether the settlement would also handle compensation claims raised by Greek citizens against German companies. The possibility could eventually be discussed, but the federal ministries were clear that they ‘would not allow the failure of the settlement’ so as to serve Reemtsma's interests. 47

In order to persuade Bonn to view its request more favourably, Reemtsma proposed that it ‘contribute to an increase of the settlement amount, if the Greek government exempted German individuals from Greek nationals’ claims and if a potential payment remained absolutely confidential’ 48 . Open to the proposal, the Federal Foreign Ministry asked the company to determine the specific amount it was prepared to allocate towards the settlement of the Greek claims. However, Reemtsma avoided providing a clear answer. After a long delay, the company finally responded that it no longer wished to offer any money in this respect and requested that the German government attempt to expand the settlement in such a way as to put an end to legal proceedings instigated by Greek individuals. This change in attitude was actually a change in tactics; Reemtsma had already sent a letter to the Greek prime minister, Konstantinos Karamanlis, underlining the important role the company played in the Greek tobacco market and the difficulties caused by the claims concerning bilateral commercial relations, but mostly to warn of possible ‘further damage to commercial activity’, which ‘would not be to the benefit of Greek commerce’. This strategy of direct pressure, along with the fact that all damage claims heard by Greek courts up to this point had been rejected, made the company confident that it could put an end to this irritating issue. Given the company's attitude and the fact that it had not bothered to inform the Federal authorities about its direct contact with the Greek prime minister, the German Finance Ministry proclaimed that there was not even the slightest ‘hope that the settlement could have a wording that would take Reentsma's interests into account’. 49

In the summer of 1961, Bonn presented the Greek side with a draft of the economic settlement. According to this, the Federal Republic would pay 4,800,000 deutschmarks as compensation for tobacco seized during the Occupation, 50 thereby settling all of the Greek tobacco traders’ claims. However, not all parties accepted the German proposal. The tobacco traders, who had submitted their claims to the Federal Agency for External Restitution in 1955, had formed two associations, one based in Athens and one in Thessaloniki. Unlike the Thessaloniki association, which accepted both the amount and the terms of the settlement, the Athens association ‘not only refused to accept the 4,800,000 as the final amount, but also demanded that the settlement specify that the amount be distributed exclusively to the members of the two associations, who were not responsible for claims raised by third non-member parties’. Furthermore, the association insisted that the distribution of the compensation ‘take place on the basis of the association's Articles’. 51 The fact that further tobacco traders had appeared, who had missed the deadline for filing a claim to the Federal Restitution Agency, but nevertheless asked to be included in the compensation, was also undoubtedly an important underlying factor behind the Athenian association's demands. The Greek ambassador to Bonn, Thomas Ypsilantis, who was monitoring the negotiations and keeping the Greek government informed of developments, noted that the conditions raised by the Athenian association would never be met by Bonn, while also warning that ‘the offer of 4,800,000 deutschmarks was final’ and that its potential ‘rejection would be equivalent to a cancellation of the settlement and the referral of the case to the long process of the Arbitral Commission of Koblenz and an uncertain outcome’. 52 In any case, by now, the Germans were already extremely annoyed by the Greek side's reluctance to accept the proposal, which was considered more than generous, especially in view of the fact that the Restitution Agency, whose operation was ‘extended solely because of the Greek tobacco case, the only case still pending’, would ‘undoubtedly adopt a negative decision’. 53

It was therefore deemed urgent that the Athens association accept the proposal as soon as possible, which its members seemed unwilling to do. In view of the deadlock, the Greek government finally decided to intervene, demanding, ‘completely out of the blue’, 54 that Constant not appear anywhere as the signatory of the agreement. The official pretext for this motion was the fact that ‘the Greek government wanted to distribute the settlement money at its discretion’, 55 thereby precluding the lawyer's interventions, as he did not enjoy ‘the Greek government's trust’, a piece of information that interestingly Athens asked the Federal authorities to handle as strictly ‘confidential’. 56 In reality, however, the Greek authorities considered this measure necessary if they were to avoid the definitive failure of the negotiations. The removal of Constant and the Greek associations signified the removal of friction between the beneficiaries, which threatened to jeopardize the payment of the 4,800,000 deutschmarks. The sudden Greek request caught the Germans by surprise, as Constant had been their main interlocutor throughout this period. Even though the federal authorities expressed their reservations, 57 in the end they decided to accept the Greek request, as the negotiations were almost in their final stage and the authorities in Bonn wanted to be finished with the Greek claims. 58 The only condition was that there would be no changes in what the two sides had agreed so far. 59

Without further ado, the Federal Ministry of Finance sent a draft of the settlement to the competent Greek authorities. A few days later, the Germans received a Greek counterproposal and were unpleasantly surprised to ascertain that Athens had ‘accepted only the settlement amount and ignored all the essential points that constituted the basis of the negotiations’. The biggest issue was that the Greeks were trying to reserve the right to raise further claims against the Federal Republic, thereby rejecting the most important condition set by the German side, that of the final settlement of all tobacco traders’ claims. German officials, infuriated by the Greek stance, which was leading to ‘three and a half years of efforts down the drain’, harshly criticized the Greek government for its indifferent attitude over the years and for ‘always remaining in the background’, thereby forcing Bonn to negotiate with the traders’ representatives instead of the Greek authorities. The prevailing perception among the Federal ministries was that the Greeks had deliberately followed this tactic in order ‘to force the FRG to pay the highest amount possible whilst reserving the right to raise further claims’. 60

The federal ministries’ response to the Greek counter-proposal came in the form of an ultimatum: either the Greeks accept the settlement in its current form, or the negotiations would be considered as having failed. Bonn was certain that once the Greek officials realized that the offer of 4,800,000 deutschmarks was final, they would accept it immediately, as they were well aware ‘that their counter-proposal was not consistent with the factual and legal situation and that it could not be accepted by the federal government’. The Germans were right. The counter-proposal was in fact an effort on the part of the Greek side to achieve a more advantageous settlement. Once it became clear that there was no such possibility, Athens hastened to accept the offer, claiming that ‘its counterproposal was misunderstood’. The Greek government was ‘ready to settle’ with the proposed amount 61 and expressed its ‘surprise regarding the FRG's attitude towards a friendly country’. 62

The settlement was eventually signed on 8 December 1961, by the Greek ambassador in Bonn, Themistokles Tsatsos, and Germany's representative to the Arbitral Commission on Property, Rights and Interests, Hans-Georg Fricke, who had conducted the negotiations, first with the traders’ representatives and later with the Greek authorities. The tobacco traders – or Constant, in his capacity as their representative – were not included as signatories. The Federal Republic of Germany would pay 4,800,000 deutschmarks in order to compensate ‘Greek citizens for raw tobacco directly or indirectly confiscated by the German authorities during the last war’. The Greek government assumed the obligation to waive ‘all claims’ filed with ‘the Federal Agency for External Restitution, the First Instant Court in Bonn or the Arbitral Commission on Property, Rights and Interests on the grounds of the Überleitungsvertrag’ and withdraw them ‘within a period of 20 days after the signing of the settlement’. Furthermore, Athens made the explicit ‘promise and obligation to exempt the Federal Republic from all tobacco restitution claims that, contrary to expectations, might be pursued on the grounds of the Überleitungsvertrag’. The ‘distribution of the settlement amount among Greek natural or legal persons or companies’ was left ‘exclusively’ to the Greek Government. 63 A week later, the Federal government transferred the money to the Greek Embassy's Dresdner Bank account. 64

The distribution

After almost four years of negotiations, the much-anticipated settlement was finally concluded. The question now remained how the amount was to be distributed amongst the beneficiaries, a process that proved much more complex than expected. Aside from the tobacco traders, producers who had been informed about the settlement were also making their claims known and were requesting that they too be included. However, the Greek authorities were well aware that, ‘according to the letter of the Überleitungsvertrag, there were no persons or companies entitled to compensation’ for tobacco seized in Greece. This knowledge might explain why the Greek authorities appeared to be absent, why they never dealt with the claims seriously, and why they only stepped in when it was certain that an agreement between the tobacco traders and the Federal Republic had, contrary to all expectations, been achieved.

As previously outlined, the Überleitungsvertrag set a basic condition giving a party the right to restitution or compensation: the identification of the seized goods or property in Germany. However, the Greek Foreign Ministry acknowledged that ‘such Greek tobacco cases do not exist anywhere in Germany, as it had been impossible to establish the existence of Greek tobacco on German soil belonging to specific persons, in order for those persons to be entitled to compensation’. All that was found in Germany was ‘a tobacco quantity of Greek origin whose owners were unknown’. The identification of the Greek origin of the specific tobacco ‘was used to establish the general claim’ for the tobacco holders’ compensation. However, these tobacco holders no longer owned the specific tobacco as they had sold it to the German occupation authorities or companies acting as their agents and had received a fee for this transaction, regardless of the fact that the fee was much less than the real value of the product and had been paid in inflationary drachmas. For this reason, the Greek Government, having received consent from the Athens and Thessaloniki traders’ associations, made the decision to ‘distribute the 4,800,00 deutschmarks not amongst the tobacco producers, as they had received a fee for the tobacco delivered to the German occupation authorities’ but among ‘those traders who held commercial tobacco after the Germans had entered in April 1941 and who had had their tobacco requisitioned by the occupying authorities without receiving a fee’. In other words, the Greek government,

unable to find beneficiaries as stipulated in the Überleitungsvertrag's letter, was forced to change the basis of determining the status of the beneficiaries, considering that these parties were no longer persons whose tobacco had been identified in Germany, as was clearly required by the Überleitungsvertrag, but generally every trader whose tobacco was removed through requisition by the Germans in 1941. 65

This decision provoked a strong reaction from the tobacco producers, who demanded that they be included in the compensation process. Their complaints even reached the Prime Minister's office, which instructed the Ministry of Foreign Affairs to examine whether the producers were indeed entitled to compensation. 66 Particular emphasis was given to the fact that the April 1941 order for the tobacco seizure clearly stated the obligation of ‘all Greek tobacco producers and tobacco traders’ to surrender their tobacco to the German military command for sale. As a result, whatever measures were applied to tobacco traders should also be applied to producers, who would have to be granted the same compensation rights. However, the Foreign Affairs Ministry insisted the producers be excluded, referring to ‘the preamble of the agreement’, which stated ‘that the compensation would only be paid for “raw” tobacco removed by the German occupation authorities’. Once again using information supplied by the Greek tobacco traders’ association, a move that suggests that the Greek officials were in league with the traders, the Foreign Ministry stressed that ‘the term “raw” applied to tobacco held by traders for export, contrary to the so-called “producer” tobacco, which was the tobacco sold by producers to traders’. Therefore, ‘the settlement itself clearly excluded producers from the compensation’. 67

The Greek government also had to deal with Constant, who had concluded individual contracts with the two traders’ associations, setting his fee, in the event that the negotiations had a positive outcome, at 11% of the total compensation, or 528,000 deutschmarks. Obviously embittered at the way the Greek authorities had removed him from the negotiations, he demanded the immediate payment of this amount. Although initially the ministries in Athens seemed unwilling to grant this demand, ‘following the persistent recommendations of the Ambassador in Bonn, Mr Tsatsos, who [. . .] noted that without Constant's contribution the settlement would probably not have been reached’, they decided to advance him 400,000 deutschmarks. 68 In reality, however, the decision behind the down payment derived from the ‘necessity to avoid the settlement's cancellation, for the signing of which the German government had set, as a condition, the explicit waiver of all claims that applicants had filed before the competent German authorities. Still, the said attorney persistently refused to make such a waiver.’ 69

The German authorities also faced problems, as the signing of the settlement did not prevent Greek tobacco companies from extending their claims directly to Reemtsma. 70 The company, having lost its previous sense of confidence, expressed its panic that ‘in the event of a conviction, a flood of similar claims would follow’. 71 The ministries in Bonn were initially inclined to avoid any involvement with the issue at all costs. 72 After all, the Greek companies’ claims were ‘not ruled out’ by the settlement, which resolved ‘only claims filed against the Federal Republic of Germany under the Überleitungsvertrag’. However, the Greek companies’ claims were directly filed in Greek courts without following the framework provided by the Überleitungsvertrag and did not concern the Federal Republic but a German company. Therefore, they were not covered by the Überleitungsvertrag and, by extension, were not resolved by the settlement. 73 Soon enough, the federal authorities changed their approach as they realized that Reemtsma's possible conviction would create a precedent, which might risk exposing ‘all companies that maintained trade relations with Greece during the war’ 74 to similar lawsuits. The Ministry of Finance suggested an intervention to the Greek authorities in order to put a definite end to the individual claims. 75 At that time, Bonn was considering granting a loan of 200,000,000 deutschmarks to Athens for the construction of a lignite plant in Megalopolis. One of the proposals circulating among German officials was ‘to make it clear to the Greek government [. . .] that a key requirement for the payment of the loan will be Athens’ readiness’ to put an end to all pending claims. 76 However, the Ministries of Foreign Affairs and Justice appeared more hesitant to adopt such measures, which might have had the opposite effect to what was intended, and insisted that decisions made by the Greek courts be heard before proceeding with any further action. 77

Bonn was so wrapped up in trying to figure out how to deal with the pending lawsuits that it failed to pay attention to the fact that the Greek parliament had not ratified the settlement almost four years after it was signed. By January 1966, the bill had already been submitted to the vote four times. Its enactment was blocked by ‘the frequent political changes’ that had taken place during this very turbulent political period, especially by the immense objections raised by almost all political parties, who demanded that tobacco producers also be included. 78 The only party with no objections proved to be the conservative ERE, the party in power during the signing of the settlement, which accused the dissenting MPs of ‘demagoguery’ and ‘distortion of the truth’ in their attempt to exploit the tobacco producers’ demands. However, the Centre Union and especially the left-wing EDA insisted on their position, emphasizing the fact that was widely known that ‘tobacco producers do not receive payment for their products at delivery but usually after a long time, sometimes six months or a year later’. The question that arose therefore ‘was whether the tobacco, which the Germans seized from the tobacco traders’ warehouses, was actually producers’ tobacco which the traders had not yet paid for’. In fact, two Centre Union MPs, Anastasios Papadopoulos and Theofylaktos Papapanagiotou, stated that in their constituency (Drama in northern Greece), there were many cases of producers who had handed over their tobacco without being paid for it. Papadopoulos referred to his own personal experience, as he was a tobacco producer himself, while Papapanagiotou submitted, as evidence, telegrams from many producers in Drama, protesting the fact that they had been left unpaid. 79 In addition, tobacco traders’ affidavits, submitted to the Greek courts, claimed that they too had been paid for the tobacco they had surrendered to the German authorities. 80 These testimonials, which clearly disputed the argument made by the 1962 ERE government, that the tobacco producers were excluded from compensation as they had already received payment for their tobacco, were not enough to trigger a revision in the distribution criteria. Moreover, in light of the disagreements and speculation, parliament failed, once again, to ratify the settlement.

In January 1967, the bill was resubmitted, while the German authorities watched the inability of all Greek governments to ratify the settlement, six whole years after its signing, in a state of disbelief. In view of the upcoming elections, 81 Bonn was fairly certain that the ratification would not take place until ‘the formation of a new government’. 82 In the event, however, following the military coup d’état of 21 April 1967, the elections never took place. Nevertheless, the Junta viewed the settlement as an opportunity to boost its image at no cost. In late July 1967, the Ministry of Finance issued an activity report, declaring the legislative regulation of several issues that had been ‘pending for years’, including ‘the distribution of 4,800,000 deutschmarks that the German government paid to Greece for tobacco seized during the Occupation’. 83

A few weeks later, the ratification of the settlement was published in the Government Gazette. Those entitled to compensation included ‘any natural or legal person of Greek nationality, practising the tobacco trade or in possession of commercial tobacco’, as long as ‘a) they suffered capital damage during the occupation (1941–4), due to the removal or forced sale of tobacco by German occupation authorities or parties authorized by German trade houses or dealers and b) they had not received compensation for this loss from other sources’. All interested parties would have to file their claim applications to a committee based in the General Accounting Office of the Ministry of Finance, which would be in charge of assessing the damage suffered by ‘each of the claimants [. . .] due to the removal of their tobacco’ and allocating the compensation amounts to the beneficiaries. The distribution of the compensation would proceed as follows: applicants proving that they had suffered actual damages up to 50,000 drachmas would be compensated in full, while those showing losses of over 50,000 drachmas would be reimbursed in full for the part of the damages up to 50,000 drachmas and ‘pro rata’ for the rest. 84

Although the committee was established in January 1968 85 and everything pointed to an imminent distribution of the compensation amount, by 1970 the beneficiaries had still not received anything. In an article dated March 1970, the right-wing newspaper Akropolis accused the ‘recalcitrant state’ of obstructing the distribution of ‘even this minute amount of compensation’ that Germany had agreed to pay. In addition, the newspaper lashed out against the government's ‘inconceivable act’ of ‘withholding 30% of the compensation paid as export tax’, thereby making the beneficiaries face an ‘unimaginable ordeal’, and urged the finance minister to intervene in order to put an end to this ‘farce’ and ‘restore reason to those responsible for this baffling claim’. 86 The article also captured the German authorities’ attention, and they initially tried to figure out what compensation the article was referring to. Although they were surprised to realize that it concerned the tobacco settlement, which they had signed with Greece more than a decade before, and that the beneficiaries had yet to receive compensation, 87 they decided to stay out of the matter completely, so as to avoid a direct confrontation with the Junta, in an effort to protect German interests in Greece. The issue ended formally for the Federal Republic in 1972 with the withdrawal or rejection of the last lawsuits pending in Greek courts against Reemtsma. 88

It took an additional four years to distribute the first round of compensation. Tobacco producers also submitted applications for claims, which were all rejected. 89 According to the General Accounting Office, by July 1974 a total of 32,586,079 drachmas were allocated to beneficiaries. Given that the Committee had awarded 241,694,787 drachmas to 213 beneficiaries, we can assume that each beneficiary received only about 15.7% of the compensation that had been awarded. 90 Two years later, after the payment of the compensation to all beneficiaries and the hearing of all appeals had been completed, a total of 5,392,805 drachmas remained available. Through a joint decision, the Ministries of Foreign Affairs and Finance approved an additional payment of 2.15% on the compensation awarded to beneficiaries. 91

Conclusion

Τobacco traders were not the only professional group in Greece to suffer substantial property losses during World War II. However, they were the only parties to receive compensation, albeit symbolic, from the Federal Republic of Germany. Bonn never extended the same courtesy to other groups, even though appeals from various circles, such as the Greek ship-owners, who were also considered pillars of the Greek economy and had an equal if not stronger influence than the tobacco traders, were numerous and continuous. This ‘special treatment’ derived not just from Bonn's desire to handle its wartime past. German officials realized that paying a relatively small sum for the traders’ compensation might lead to greater multiple gains. The Federal Republic would be able to preserve and further promote its economic relations with Greece by eliminating a nuisance capable of jeopardizing bilateral trade, considering that tobacco was the main Greek import into Germany. At the same time, it would also help stabilize Germany's growing political and economic influence in Greece, a move that was essential to Bonn's effort to consolidate its position in the postwar western world. Claims from other victims’ groups were therefore ignored, since compensating them would evidently not have the same advantages.

1 Pelt, M., Tying Greece to the West. US–West German–Greek Relations 1949–74 (Copenhagen 2006) 97.

2 Prontzas, E., Οικονομικός προστατευτισμός και βαλκανική συνεργασία: Τα ανατολικά καπνά στο Μεσοπόλεμο (Thessaloniki 1996) 314 . See also Lampe, J. R. and Jackson, M. R., Balkan Economic History, 1550–1950. From Imperial Borderlands to Developing Nations (Bloomington, IN 1982) 374.

3 Kalafatis, T. (ed.), Οικονομική ιστορία του ελληνικού κράτους, II (Athens 2011) 62.

4 Mazower, M., Dark Continent: Europe's Twentieth Century (London 1998) 131.

5 Neal, L., ‘The economics and finance of bilateral clearing agreements: Germany 1934-8’, The Economic History Review 32 (1979) 391.

6 Carnegie, A., Power Plays: How International Institutions Reshape Coercive Diplomacy (Cambridge 2015) 52.

7 Prontzas, Οικονομικός προστατευτισμός, 421.

8 Mazower, Dark Continent, 132. Mazower comments that this policy resulted in ‘Bulgaria, Yugoslavia and Greece’ helping to ‘pay for the German recovery’ after World War I.

9 Ibid .

10 Pelt, M., Tobacco, Arms and Politics: Greece and Germany from World Crisis to World War, 1929–1941 (Copenhagen 1998) 255.

11 Kalafatis (ed.), Οικονομική ιστορία, 63.

12 Dr Schomaker, Head of the Reich's Finance Ministry Tobacco Department, Note, 21 April 1941, Bundesarchiv Koblenz [henceforth BArch], B126/60568.

13 Kalafatis (ed.), Οικονομική ιστορία, 63.

14 Greek Ministry of Foreign Affairs, Confidential Memo to P. Pipinelis, 9 Sept. 1963, Greek Ministry of Foreign Affairs Archives [henceforth ΑΥΕ], West Germany reparations/69.4. All quotations from German and Greek archives have been translated into English by the author of the article.

15 For the general scheme of German reparations and compensations towards Greece, see Konstantinakou, D.-G., Πολεμικές οφειλές και εγκληματίες πολέμου στην Ελλάδα. Ψάχνοντας την ηθική και υλική δικαίωση μετά τον Β’ Παγκόσμιο Πόλεμο (Athens 2015).

16 Memorandum on the meeting regarding the Greek tobacco crop 1939–41, 18 April 1941, BArch, B126/60568.

17 Commander of the 12th Army, Order for the purchase of Greek tobacco, 18 April 1941, BArch, B126/60568.

18 Finance Minister of the Reich to the Commander of the 12th Army, 18 April 1941, BArch, B126/60568.

19 Federal Ministry of Foreign Affairs to the Federal Embassy in Athens, 3 June 1962, Politisches Archiv Auswärtiges Amts [henceforth PAAA], B86/572.

20 Special Representative of the Reich for the Southeast Area to Reemtsma, 8 March 1944, BArch, B126/60568.

21 Special Representative of the Reich for the Southeast Area to Army Group E Commander, 8 March 1944, BArch, B126/60568.

22 See, for example, the RM 900.000 claim by the Greek company T. Papachristopoulos to Reemtsma, 17 May 1945, BArch, B126/60568.

23 Federal Minister of Finance to Federal Ministry of Foreign Affairs, 10 July 1961, PAAA, B86/572.

24 During the 1946 Paris Peace Conference, the Greek delegation emphasized that regaining Greece's prewar position in tobacco exportation in Central Europe was one of the main factors that would play a key role in the country's reconstruction: D. Filaretos’ Memorandum at the Peace Conference, 22 Aug. 1946, ΑΥΕ, Italian reparations/4.7.

25 Legislative Decree 3578, On the Ratification of the Charter of the Arbitral Commission on Property, Rights and Interests in Germany: Εφημερίς της Κυβερνήσεως (Greek Government Gazette) [henceforth FEK], 235/I, 13 Oct. 1956.

26 The claimants were tobacco traders from all over Greece: Greek Embassy in Bonn to Federal Restitution Agency, 4 Nov. 1955, BArch, B177/888.

27 Constant to Federal Restitution Agency, 4 Nov. 1955 and 5 Nov. 1955, ΑΥΕ, West Germany reparations/59.9.

28 Greek Ministry of Foreign Affairs to Federal Ministry of Foreign Affairs, 3 May 1956, PAAA, B86/911.

29 Federal Restitution Agency to Federal Minister of Finance, 4 June 1956, BArch, B126/19141.

30 Greek Foreign Ministry to State Legal Council, 1 June 1962, ΑΥΕ, West Germany reparations/69.4.

31 Federal Restitution Agency to Federal Minister of Finance, 2 Aug. 1957, BArch, B126/19141.

32 Pelt, Tying Greece, 101-27.

33 Federal Embassy in Athens to Federal Ministry of Foreign Affairs, 22 June 1957, PAAA, B86/911. The German ambassador Theodor Kordt could not hide his annoyance, noting that ‘Mr Averof did not miss the chance to repeat for the fourth time [. . .] in fluent Balkan-French “Je sais que l'Allemagne est pauvre mais la Grèce est pauvre aussi”’.

34 Konstantinakou, Πολεμικές οφειλές, 373-8.

35 Federal Ministry of Finance, Memorandum on the Greek claims against Reemtsma, 20 July 1957, BArch, B126/60568.

36 Federal Minister of Finance to Federal Ministry of Foreign Affairs, 10 July 1961, PAAA, B86/572.

37 Reemtsma to Federal Ministry of Finance, 24 Sept. 1958, BArch, B102/58100. A limited number of lawsuits were also filed against Austria Tabakwerke A.G.

38 Federal Ministry of Foreign Affairs to Federal Embassy in Athens, 3 July 1962, PAAA, B86/572.

39 Federal Ministry of Foreign Affairs, Note on settlement of Greek compensation claims, 12 March 1962, PAAA, B86/572.

40 See the German representative's letter to the Arbitral Commission on Property, Rights and Interests, Hans-Georg Fricke to the Greek lawyer Stelios Karakantas, who handled a small number of Greek tobacco traders’ claims 9 Dec. 1957, PAAA, B86/911.

41 Federal Ministry of Foreign Affairs, P. W. Enders to S. Tetenes, 11 Dec. 1957, PAAA, B86/ 911.

42 Federal Minister of Finance to Federal Ministry of Foreign Affairs, 10 July 1961, PAAA, B86/572.

43 Federal Minister of Finance to Federal Ministry of Foreign Affairs, 23 Aug. 1957, PAAA, B86/911.

44 Reemtsma to Federal Ministry of Finance, 24 Sept. 1958, BArch, B102/58100.

45 Law No. 3478, On Ratification of the Paris Agreement of 1946 on German reparations, FEK, 5/I, 5 Jan. 1956.

46 Reemtsma to Federal Ministry of Foreign Affairs, 8 Feb. 1962, BArch, B126/60568.

47 Fricke, Note on Greek tobacco compensation claims, 18 April 1961, PAAA, B86/572.

48 Ibid .

49 Federal Ministry of Finance, Note on German-Greek settlement, 11 July 1961, PAAA, B86/ 572.

50 Bonn's initial intention was to give only 1,500,000 deutschmarks, while Constant demanded an amount between 30,000,000 and 40,000,000 deutschmarks: Federal Restitution Agency to Minister of Finance, 21 Feb. 1958, BArch, B126/19141.

51 Greek Embassy in Bonn to Greek Ministry of Foreign Affairs, 10 March 1961, ΑΥΕ, Κ.Υ. 1966/4.4.

52 Ibid .

53 Greek Embassy in Bonn to Greek Ministry of Foreign Affairs, 18 April 1961, ΑΥΕ, Κ.Υ. 1966/4.4.

54 Fricke to Federal Ministry of Foreign Affairs, 12 Oct. 1961, PAAA, B86/572.

55 Federal Ministry of Foreign Affairs, Notes on Greek claims’ settlement, 7 Oct. 1961, PAAA, B86/572.

56 Federal Embassy in Athens to Federal Ministry of Foreign Affairs, 11 Aug. 1961, PAAA, B86/572.

57 Fricke to Federal Ministry of Foreign Affairs, 12 Oct. 1961, PAAA, B86/572.

58 Federal Embassy in Athens, Note Verbale, 31 July 1961, PAAA, B86/572. The note verbale in which the FRG accepted Constant's exemption was sent upon special request of the Greek Ministry of Foreign Affairs: Federal Embassy in Athens to Federal Ministry of Foreign Affairs, 11 Aug. 1961, PAAA, B86/572.

59 Federal Minister of Finance to Federal Ministry of Foreign Affairs, 10 July 1961, PAAA, B86/572.

60 Fricke to Federal Ministry of Foreign Affairs, 12 Oct. 1961, PAAA, B86/572.

61 Federal Ministry of Foreign Affairs, 2 Nov. 1961, PAAA, B86/572.

62 Federal Embassy in Athens to Federal Ministry of Foreign Affairs, 22 Sept. 1961, PAAA, B86/572.

63 Greek Draft of Settlement, PAAA, B86/572.

64 Fricke to Greek Embassy in Bonn, 15 Dec. 1961, PAAA, B86/572.

65 Greek Ministry of Foreign Affairs to State Legal Council, 1 June 1962, ΑΥΕ, West Germany reparations/69.4.

66 Prime Minister's Office to Ministry of Foreign Affairs, 28 March 1963: ΑΥΕ, West Germany reparations/69.4.

67 Greek Ministry of Foreign Affairs to State General Accounting Office, 10 April 1963, ΑΥΕ, West Germany reparations/69.4.

68 Greek Ministry of Foreign Affairs to State General Accounting Office, 13 March 1963, ΑΥΕ, West Germany reparations/69.4.

69 Greek Ministry of Foreign Affairs to State General Accounting Office, 12 July 1962, ΑΥΕ, West Germany reparations/69.4.

70 See, for example, G. Sakellariadis to Reemtsma, 12 Dec. 1961 and T. Papachristopoulos imports-exports to Reemtsma, 8 July 1963, BArch, B126/60568.

71 Reemtsma to Federal Minister of Finance, 18 July 1963, BArch, B126/60568.

72 Federal Ministry of Foreign Affairs, Note on settlement of Greek claims, 12 March 1962, PAAA, B86/572.

73 Fricke, Note on Greek traders’ claims against Reemtsma, 10 Feb. 1965, BArch, B126/60568.

74 Federal Ministry of Foreign Affairs, Note on Greek claims, 9 Oct. 1962, PAAA, B86/572.

75 Federal Ministry of Finance to Ministries of Foreign Affairs and Justice, 2 Aug. 1963, BArch, B126/60568.

76 Federal Ministry of Foreign Affairs, 15 Oct. 1962, PAAA, B86/572.

77 Fricke, Note on Greek claims against Reemtsma, 21 Oct. 1963, BArch, B126/60568.

78 Greek Ministry of Foreign Affairs, Note, 18 May 1967, AYE, West Germany reparations/72.5.

79 See the speeches of K. Venetis (ERE) and V. Efraimidis (EDA), Greek Parliament Minutes, 2 Mar. 1966.

80 Lawsuit by the tobacco trader E.M. against the Company Reemtsma, First Instance Court, Athens, 7 June 1955, BArch, B126/60568.

81 In December 1966, P. Kanellopoulos and G. Papandreou agreed to form a transitional government headed by I. Paraskevopoulos, with the purpose of leading the country to elections no later than the end of May 1967.

82 Federal Embassy in Athens to Federal Ministry of Foreign Affairs, 2 March 1967, PAAA, B86/911.

83 Newspaper Macedonia, 30 July 1967.

84 Law No. 56, On ratification of the Agreement between Greece and the Federal Republic of Germany for the settlement of claims of the Greek Government or of Greek nationals for removed tobacco: FEK, 146/I, 25 Aug. 1967.

85 FEK, 18/II, 13 Jan. 1968. The compensation would be paid to beneficiaries only after the assessment of all cases and appeals, which the claimants had to submit to the Council of State.

86 Newspaper Acropolis, 18 March 1970. The withheld tax was eventually refunded in 1972: General Accounting Office to Bank of Greece, 4 Aug. 1972, AYE, West Germany reparations/73.3.

87 Federal Ministry of Foreign Affairs to Minister of Finance, 13 Apr. 1970, BArch, B126/60568.

88 Reemtsma to Federal Ministry of Finance, 14 Feb. 1972, BArch, B126/60568.

89 Greek authorities had even prepared a standard rejection form for the tobacco producers' claims: State General Accounting Office, Committee of Article 3, Law 56/1967, Rejection Form, AYE, West Germany reparations/57.4.

90 Newspaper Macedonia, 4 July 1974.

91 Joint Decision of the Ministers of Foreign Affairs and Finance, FEK, 592/II, 30 April 1976.