London Debt Accords

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Hermann Josef Abs signs the London Debt Accord on February 27, 1953

With the London Debt Agreement (also: Agreement on German External Debts ) that after lengthy negotiations on 27. February 1953 in London was signed and ratified by the law of 24 August 1953 for the federal territory ( BGBl. 1953 II 331, 556) were the German foreign debts regulated. The states that had acceded to the agreement by 1956 represented more than ninety percent of the claims against Germany .

Most of the debts came from economic aid in the post-war period, especially aid from the Marshall Plan . A large part came from the time before the founding of the Federal Republic of Germany and consisted of the pre-war debts of the German Reich and loans granted by American banks from the interwar period. A small part consisted of outstanding foreign debts, which were based on reparation claims under the Versailles Treaty . This agreement also dealt with private bonds, claims from the movement of goods, services and capital as well as standstill debts . The post-war debt was eventually settled in bilateral treaties between the creditor states and the Federal Republic of Germany, while the London Debt Accords contained multilateral agreements on pre-war debt.

Under the leadership of Hermann Josef Abs , the German delegation was able to obtain a high debt reduction. The initially calculated debts of 29.3 billion marks were reduced to 14.8 billion, with the USA in particular generously foregoing repayments. This sum formed the basis for annual principal and interest payments. The maturity dates of bonds were postponed, in some cases until 1994. However, the last installment was made in 1966. The London Debt Agreement incorporated the demands of 70 states, 21 of which were directly involved as negotiators and contract signatories.

In September 1950, the Western powers made the transfer of further sovereign rights to the West German state conditional on these issues being settled. The Federal Republic had to recognize the accumulated foreign debts in principle in order to assert its international right to identity with the German Reich under constitutional law. At the same time, the Luxembourg Agreement was being negotiated, which agreed to cover the integration costs of Jews who had survived the Holocaust and the restitution of Jewish assets. The ratification of the London Debt Agreement and the Luxembourg Agreement were political preconditions for lifting the occupation status. Countries of the Eastern bloc were not involved; The GDR did not make payments, nor were the claims of the Eastern bloc states taken into account at all.

The question of German reparations for losses and damage in World War II was not an official issue in the London negotiations. All outstanding claims for reparations were postponed in the London Agreement until a final settlement was reached (Article 5 (2) LSA); they were to be postponed until a formal peace treaty was concluded - although there is no verbatim reference to this - which, however, was never concluded: in 1990 the two plus four treaty was signed “instead of a peace treaty”. From this it follows that the reparations question should no longer be settled according to the will of the contracting parties - the four victorious powers as well as the two German states.

Pre-war debt and debt relief

A considerable part of the pre-war debts went back indirectly to the German reparation obligations from the First World War set out in the Versailles Treaty . The payment obligations had been adjusted to economic performance in 1924 with the Dawes Plan , and in 1924 the German Reich had been able to take out an international loan ( Dawes loan ) of 800 million gold marks , which had opened up the American capital market for it. The bonds and credits pouring into Germany from 1925 had made a significant contribution to the economy in the supposedly Roaring Twenties . By 1930 American banks alone had subscribed to German bonds worth US $ 1.43 billion .

Since the Dawes Plan left the final amount of the German reparation obligations open and thus did not bring about a final settlement of the reparation question, a new reparation plan was negotiated in 1929. The Young Plan , which came into force in 1930, set the German reparation obligations at a capital sum of 36 billion Reichsmarks , payable in annual installments of up to 2.1 billion marks. France and Great Britain needed this money to pay interest on and pay off their war debts to the United States. In order to interest Germany in the punctual payment of reparations, the Young bond was issued: Germany owed around 1.2 billion Reichsmarks in it, of which two thirds went immediately to the reparations creditors, one third went to the Deutsche Reichspost and the Reichsbahn .

When the German banks came to the brink of insolvency in the spring of 1931 due to the withdrawal of short-term foreign loans, US President Herbert Hoover proposed, as a confidence-building measure, that all political debts, i.e. reparations and inter-allied war debts from the First World War, be suspended for one year. The hoped-for psychological effect of the Hoover moratorium fizzled out, however, and in the banking crisis of July 1931 , German banks lost so much more foreign currency that Germany actually became insolvent (see standstill agreement ). In 1932, at the Lausanne conference, it was agreed that the reparations would be canceled in exchange for a final payment of three billion gold marks, which the creditors never claimed. The inter-allied war debts were also no longer serviced from 1932 onwards.

Germany was thus waived a sum of 110 billion marks including interest; however, the above-mentioned international bond debts were outstanding. In June 1933 , the National Socialist Reich government suspended the interest payments due for these loans , which increased these outstanding debts.

Debt claims in 1952

When calculating the value of the outstanding debt amount by the creditor states, all interest and compound interest claims accrued since 1934 (more than 14 billion DM ) were waived. The debtors estimated the total pre-war debts at DM 13.5 billion.

Added to this were the post-war debts that the three western occupying powers were able to assert. These were payments from the Marshall Plan and Allied loans for economic aid that had been granted immediately after the war. These debts were initially put at over DM 15 billion.

At the beginning of the negotiations, despite favorable calculations and generous debt relief, there was a total claim of around DM 29.3 billion.

Foreign assets dispute

Domestically, the demand was made several times to include the confiscated German foreign assets to offset debts, although some information from the private sector and the Bremen study society for private foreign interests went beyond a realistic level. The foreign assets were confiscated by a decision of the Control Council of October 5, 1945 and distributed in the Paris reparations agreement of January 14, 1946. The US, for example, used the proceeds to compensate soldiers who had been taken prisoner of war.

It was not only the valuation of the seized foreign assets that was controversial. Calculations by the Inter-Allied Reparations Agency (IARA) and German estimates differed by sixteen times. A figure from 1958 put the value at around 400 million US dollars and found that the debt relief of two billion dollars granted by the United States under the Marshall Plan alone exceeded the value of the confiscated foreign assets by five times.

The occupying powers refused any offsetting of foreign debts with the confiscated foreign assets. The latter are in the nature of reparations, and the Germans are well advised to let this question rest. The USA stated that "[...] the amounts previously raised for reparations from foreign assets or other sources [were] only 'a drop in a bucket when compared with the losses which had been sustained during the war' '[...]".

Negotiation success

In the course of the negotiations, the German side succeeded in reducing the creditor claims far-reaching. First of all, the evaluation according to the gold standard was abandoned. The total of pre-war debts fell from DM 13.5 billion to DM 9.6 billion. Finally, an agreement was reached on lower interest rates and the elimination of compound interest, which resulted in a total of DM 7.3 billion for pre-war debts, which are in annual installments of initially 340 million DM should be repaid.

The post-war debt, which had been estimated at over DM 15 billion at the beginning of the negotiations, was reduced to less than DM 7 billion. For the repayment of post-war debts, an annual payment of DM 223 million was planned.

The total claims of the creditors thus amounted to only around 14 billion DM. In view of the economic strength of the Federal Republic (the budget volume of the Federal Republic was 23 billion DM in 1952), some claims had to be paid within twenty years, others by 1988.

From adversary in the world wars to ally in the cold war

This negotiation result, which was excellent from a German point of view, was not only due to Hermann Abs, who always warned not to overstrain the economic strength of the young Federal Republic. The favorable result had been brought about by the United States: it reduced its claims and waived the priority servicing of the claims for post-war loans, but in return demanded extensive debt relief, particularly from the pre-war creditors. The western creditor states, above all the United States, had good reasons to stabilize the Federal Republic economically as a border state to the Eastern bloc and to restore its international creditworthiness. The Americans at war in Korea hoped for a Germany that was firmly bound to the West and that could take over part of the defense burden after rearming .

Federal Republic of Germany debtor of the debts of the German Reich

In the London Debt Agreement , the Federal Republic of Germany had asserted its claim to sole representation and made appropriate agreements. For example, the parties to the London Agreement assumed that the Federal Republic owed the liabilities of Germany , i.e. the German Reich (cf. numerous considerations in the preamble). No assumption of guilt or even mere assumption of liability for the liabilities of a lost debtor was agreed, since the Federal Republic had expressly not appeared as the legal successor to the German Reich, but had declared itself to be identical to the German Reich (→  legal situation in Germany after 1945 ). In this regard, the Federal Government had already confirmed on March 6, 1951 in the debt declaration largely formulated by the Allied High Commission on the Petersberg in Bonn , “that it [the Federal Republic of Germany] is liable for the external pre-war debts of the German Reich, including the Reich’s later liabilities debts of other corporations to be declared, as well as for the interest and other costs for bonds of the Austrian government, insofar as such interest and costs became due after March 12, 1938 and before May 8, 1945. ”In addition, the Federal Government brought“ their request to express to resume the payment service for the German external debt ”.

A “territorial division” was agreed for the pre-war debts that had accrued until the reunification of Germany, so that the portion to be credited and repaid for the Federal Republic decreased, while the remaining claim was suspended until German reunification (Article 25). In fact, this demand, known as the “shadow quota”, of 239.4 million D-Marks was revived in 1990 and from 1991 onwards led to further payments to the creditor states. In 2002 the Federal Republic paid an installment of 4.1 million euros ; further payments totaling 95 million euros should be made by 2010.

Debt settlement

The first repayment installment in 1953 was 563 million DM and corresponded to less than 4% of the export revenues, which in 1952 were just under 17.0 billion DM. In accordance with the contract, the rate rose in 1957 to DM 765 million. With the current payments, almost all foreign debts had been settled by 1983; By 1973, the post-war loans from France and Great Britain had been repaid. A final payment was made in 1988 to settle the post-war debt to the United States.

The last debt payment of 69.9 million euros was made on October 3, 2010. It is seen as the end of all known financial demands of the former allies from the two world wars.

Services to Eastern Bloc countries

After the end of the Cold War , bilateral compensation agreements - similar to those in the 1960s with Western countries - were concluded with Poland , Russia , Ukraine , Belarus , Estonia , Latvia and Lithuania between 1991 and 1998 . Germany thus made up for the necessary compensation for the victims of National Socialism in the states of the former Warsaw Pact , with which it also wanted to do justice to the unresolved question of compensation for former forced laborers . In the Czech Republic , the “German-Czech Future Fund” administered by both countries was set up for this purpose (cf. Foundation “Remembrance, Responsibility and Future” ).

Judgments and Inferences

Jayati Ghosh and the Turkish economist Sabri Öncü suggest that the London Agreement of 1953 should be used as a guide for the urgently needed clean-up and restructuring of global national debt, because:

“In today's connected world, this type of forward-looking, coordinated debt settlement strategy is imperative. If we all want to survive not only the normal devastation of global markets, but also the existential threats of pandemics and climate change, there is no alternative. "

See also

literature

  • Written report of the Committee for the Occupation Statute and Foreign Affairs ... regarding the investigation of German foreign assets (= negotiations of the German Bundestag, 1st electoral period 1949, volume 17, printed matter 3389 of May 16, 1952; reparations agreement of 1946 / German estimates / IARA estimates) . BT-Drs. 1/3389 (PDF).
  • Christoph Buchheim : The London Debt Agreement. In: Ludolf Herbst (Ed.): West Germany 1945–1955. Submission, control, integration. Oldenbourg, Munich 1986, ISBN 3-486-53111-5 , pp. 219-229.
  • Hermann Josef Abs : decisions 1949–1953. The Origin of the London Debt Accord. Verlag v. Hase & Koehler, Mainz 1991, ISBN 3-7758-1245-8 .
  • Jörg Fisch : Reparations after the Second World War. CH Beck, Munich 1992, ISBN 3-406-35984-1 .
  • Ursula Rombeck-Jaschinski: The London Debt Agreement . The settlement of German foreign debts after the Second World War. Oldenbourg, Munich 2005, ISBN 3-486-57580-5 .
  • Dieter Blumenwitz : The questions of German reparations . In: Hans-Joachim Cremer, Thomas Giegerich, Dagmar Richter, Andreas Zimmermann (eds.): Tradition and cosmopolitanism of law. Festschrift for Helmut Steinberger (=  contributions to foreign public law and international law , volume 152), Springer, Berlin / Heidelberg / New York 2002, pp. 63–81.
  • Christoph Buchheim (University of Mannheim): Review of Rombeck-Jaschinski, H-Soz-u-Kult, April 11, 2005 .
  • Lothar Gall : The banker Hermann Josef Abs. A biography. Beck, Munich 2004, ISBN 3-406-52195-9 , pp. 164-206.
  • Kordula Kühlem: How the Federal Republic got creditworthy. The London Debt Agreement 1953. In: The Political Opinion 520/2013, pp. 61–68 ( PDF ).

Web links

German

English

Individual evidence

  1. ^ Peter Graf von Kielmansegg : After the catastrophe. A history of divided Germany , Berlin 2000, ISBN 3-88680-329-5 , p. 148.
  2. ↑ In the Paris reparations agreement of January 14, 1946 , foreign assets were confiscated, but their value only represented a fraction of the war-related compensation claims.
  3. ↑ That paragraph of the London Debt Agreement played a key role for the entire future treatment of the question of compensation in German law-making and jurisprudence : “An examination of the claims from the Second World War of states that were at war with Germany or their territory of Germany was occupied, and bodies or persons acting against the Reich and on behalf of the Reich by citizens of these states [...] will be postponed until the reparation question has been finally settled. " (BGBl. 1953 II p. 333)
  4. ↑ Marcel Kau, in: Graf Vitzthum / Proelß (ed.), Völkerrecht , 6th edition, marginal no. 218 .
  5. ↑ On this in detail Bernhard Kempen , The Distomo case : Greek reparations claims against the Federal Republic of Germany , in: Hans-Joachim Cremer / Thomas Giegerich / Dagmar Richter / Andreas Zimmermann (eds.): Tradition und Weltoffenheit des Rechts. Festschrift for Helmut Steinberger (= contributions to foreign public law and international law; vol. 152), Springer, Berlin [a. a.] 2002, pp. 179-195, here p. 193 f.
  6. ↑ Philipp Heyde: The end of the reparations. Germany, France and the Young Plan 1929–1932. Schöningh, Paderborn 1998, pp. 35-53.
  7. ↑ Bruce Kent: The Spoils of War. The Politics, Economics, and Diplomacy of Reparations 1918–1932. Clarendon, Oxford 1989, pp. 341-372.
  8. ↑ Written report of the Committee for the Occupation Statute and Foreign Affairs ... regarding the investigation into German foreign assets (= negotiations of the German Bundestag, 1st electoral period 1949, volume 17, printed matter 3389 of May 16, 1952); there contradicting values
  9. ↑ Ursula Rombeck-Jaschinski: The London Debt Agreement ... , Munich 2005, p. 165.
  10. ↑ See source: Written report, pp. 2–3.
  11. ↑ Hans W. Baade: The Treatment of German Private Assets in the United States after the First and Second World War. In: Fritz Kränzlin, H. E. A. Müller: The protection of private property abroad (Festschrift for Hermann Janssen on his 60th birthday), Heidelberg 1958, p. 25.
  12. ↑ Ursula Rombeck-Jaschinski: The London Debt Agreement ... , p. 178.
  13. ↑ Ursula Rombeck-Jaschinski: The London Debt Agreement ... , p. 417.
  14. ↑ Ursula Rombeck-Jaschinski: The London Debt Agreement ... , p. 165.
  15. ↑ See Federal Law Gazette II p. 333 ff.
  16. ↑ monthly reports 02.2003 of the Ministry of Finance, p 95; Georg Ismar: The First World War ends for Germany in 2010  ( page no longer available , search in web archives ), Nürnberger Nachrichten of December 6, 2009.@1@ 2Template: Dead Link / www.nn-online.de
  17. ↑ stern.de of October 3, 2010 . Retrieved February 15, 2012.
  18. ^ Bilateral Treaties and the Cold War (1956–1974) , services until 2000 , website of the Federal Archives
  19. ^ Reunification and the two-plus-four contract (1990–1998) , services until 2000 , website of the Federal Archives
  20. ^ "Class actions" and "legal closure" (1998–2000) , services up to 2000 , website of the Federal Archives
  21. ↑ Jayati Ghosh: Debt Epidemic , in: ipg-journal , March 17, 2020.