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Poland and Germany: Reparations - Stanisław Żerko

Of all the European countries, Poland was the most devastated by the Germans during World War II. No other country suffered proportionally as many human losses either. What is more, one of the consequences of the war—planned, prepared, and launched by Germany—was that Poland became part of the Soviet zone of influence for nearly 50 years. Through its subjection to Moscow, it forfeited not only the advantages of the Marshall Plan but also German war reparations accorded to it at Yalta and Potsdam. Exploited economically by the Soviet Union (USSR), Poland was left to rise from ruin on its own, and under an ineffective socialist economy at that. Resulting economic retardation is felt to this day.

It is surprising how little is known about the history of German war reparations to Poland. While the matter is fascinating not just to professional historians, the participants in the debate underway in Poland in recent weeks appear to be missing even the basic facts. Hence it seems worthwhile to recall these facts, put them in order and supplement them with other relevant pieces of information.

Reparations are part of war indemnification and meant to compensate (usually only partially) for damage to property suffered by a state that has been attacked. Civil law damages, i.e., all individual claims by citizens, are a different matter and this distinction is relevant to the argument laid out here, even if the addressee— the party that started the war and lost it—is the same. In this case, the addressee is Germany, not the Soviet Union (later Russia), which appears from time to time as a potential addressee of Polish claims. Far from losing the war, the Soviet Union took part in deciding the scope of reparations imposed on the defeated Germany.

The starting point of the reparations issue is a declaration by the anti-Nazi coalition of 5 January 1943. The matter was further discussed by leaders of the Big Three (U.S., UK, USSR) in February 1945 in Yalta. They agreed that Germany must pay compensation in three forms: in confiscated goods, in manufactured goods, and via the provision of German labour. Bearing in mind that the reparations imposed on the German Reich after World War I \had been so huge as to become uncollectible, a relatively moderate amount was taken as the basis for further consideration: $20 billion, with one-half accruing to the USSR alone.

At the Potsdam conference in the summer of 1945, the subject of reparations was one of the chief contentious issues. No mention was made of the $20 billion and no total amount of reparations was set, despite Soviet insistence. In the Potsdam Conference Resolution (2 August 1945), a new border between Poland and Germany was drawn up, with Poland’s territorial acquisitions in the west treated by the Big Three as compensation for the eastern provinces lost to the USSR. This provision stated explicitly that the lands placed under Polish administration should not be regarded as part of the Soviet occupation zone in Germany. In addition, Poland was separately granted the right to reparations—a crucial factor given the false allegations made not only in Germany but, regrettably, also in Poland that the so-called recovered territories in the west and north were in fact part of the reparations.

The reparations were to come to Poland via the USSR. It soon became clear that this arrangement effectively deprived Poland of due indemnification.

Exactly two weeks after the conclusion of the Potsdam Conference, on 16 August 1945, the USSR and the Polish communist-dominated Provisional Government of National Unity signed an agreement, enabling legislation as it were, to the Potsdam reparation provisions. It was agreed that the Soviet government would cede to Poland 15% of its reparation deliveries, but at the same time the Soviets forced Poland to accept an unprecedented clause: the Moscow-dominated Polish government undertook in a treaty to deliver to the USSR huge amounts of coal, between 8 million and 13 million tonnes a year, over many years, at “agreed special prices”. These special prices were set in a secret annex at $1.22 per tonne of coal and $1.44 per tonne of coke, on average far (even ten-fold) below the global prices at the time. These prices probably barely covered the cost of mining and transport. Poland’s losses were all the heavier because, with the global coal market booming at the time, foreign currency profits from the sale of coal would have been very useful to the ruined economy. Subsequently, by October 1956, losses arising from the coal clause were estimated at $863 million at then-current prices.

Less known is another agreement. signed on 7 September 1945. As part of the reparation settlements, the USSR was to turn over to Poland  about 2,000 steam locomotives that once belonged to Germany. Even though the locomotives were still on the Polish territory, about a third of them was damaged and others already rather antiquated, Poland had to pay for them. It was a clear breach of the Potsdam agreement, as these assets should have been relinquished to Poland free of charge, especially since the USSR would have had no use for them anyway because of the axle-base difference.

Apart from the huge losses suffered by Poland under the coal clause, the value of goods received by way of reparations was illusory at times. If we look at the list of goods delivered in 1949, books of classic Marxism-Leninism (6 million copies) accounted for an estimated 10% of the goods by value, including as many as 1 million copies of the famous propaganda brochure History of the Communist Party of the Soviet Union (Bolsheviks): Short Course. Other items on the list included machinery and production plants, locomotives, rolling stock, ships, fuel, chemicals, and other useful materials, but also goods such as tableware, watches, hunting weapons, gardening tools, and furniture. Most of these had been sent from the Soviet occupation zone in Germany, and, later, from East Germany (GDR), although dismantled machinery and equipment also came from the Western occupation zones. Crucial here was the fact that Poland’s communist government had no idea how to calculate the 15% of goods collected from Germany by the USSR and due Poland. All that came on top of the painful losses incurred as a result of the almost-gratuitous deliveries of coal to the USSR.

Poland’s Kremlin-dependent authorities went along with the reduction of reparations from Germany whenever the Soviet Union expressed such a wish. By 1947, Poland’s share of reparation deliveries through the USSR had been reduced from 15% to 7.5% (the volume of coal deliveries to the USSR was also reduced by half), and in May 1950, when the USSR decided to cut by one half the outstanding reparation amount, the government of the People’s Republic of Poland (PRL) had to follow suit. 
In August 1953, Moscow decided that the GDR should be freed of this burden altogether. This happened two months after the Soviets had bloodily suppressed an anti-communist uprising in East Germany and after the toppling of the notorious Lavrentiy Beria. Against this backdrop, the USSR modified its German policy and resolved to extend economic support to East Germany. All this was preceded by the London agreement of 27 February 1953, in which Western states agreed to defer all their World War II-related claims against West Germany (FRG) until a peace treaty was signed.

And so, on 19 August 1953, the Polish government adopted a resolution accepting the USSR’s “proposal” to waive, as of 1 January 1954, “all outstanding reparations under the agreement between the PRL and the USSR”. At the same time, the Bolesław Bierut government (at the time the PRL president was also prime minister) welcomed “with gratitude” the USSR’s decision to release Poland “from obligations under the coal agreement”. On 22 August, the USSR and the GDR concluded an agreement “discontinuing in full, as of 1 January 1954, the collection of reparations from the German Democratic Republic”. A day later, the Bierut government held a half-hour meeting, accepting without further discussion “proposals of the Soviet government to the PRL government”; also endorsed unanimously (with 35 people present) was a “Statement of the Government of the People’s Republic of Poland”, submitted by the minister of foreign affairs, which “waived, as of 1 January 1954, the indemnification payable to Poland”. The waiver—as the document reiterated—was meant to benefit not only the GDR but the “German nation” in general, with a view not only “to helping strengthen its economy, but also to creating necessary conditions for rebuilding its unity.” In addition, it reflected the PRL’s desire “for the emergence of a united, peaceful and democratic German state—a prospect of vital interest to the Polish nation”.

This decision was no doubt entirely against Poland’s interests. It was made at the peak of Poland’s subjection to the eastern hegemon. Bierut’s team would have never considered rejecting the Soviet “proposals”, particularly as they were accompanied by economic pressure—the prospect of having to continue fulfilling the provisions of the August 1945 coal clause. Some lawyers, notably Prof. Jan Sandorski of Adam Mickiewicz University in Poznań, insisted years later that Bierut’s consent to the waiving of reparations had been given under economic pressure, and for this reason it can be considered invalid from the beginning (ab initio).

After a while, even government advisers realised that the Bierut government’s declaration had gone further than the Soviet one. First, the USSR had made it very clear that the declaration concerned the GDR rather than Germany as a whole. Second, the USSR-GDR treaty had provided for “the discontinuance of the collection of reparations in whole” rather than a waiver thereof. Third, while the USSR had used the term “reparations”, the Bierut government applied a broader term—“indemnification”. In a confidential memorandum of 24 May 1971, its authors emphasised that the 1953 declaration had contained errors “with adverse legal and economic consequences for Poland’s further claims against the Federal Republic of Germany”.

A change of guard in the PRL in October 1956 could not, for political reasons, lead to challenging of the validity of the Bierut government’s declaration. Still, the new governmentraised the matter of compensation for individuals who had suffered at the hands of the German occupying forces. This claim encountered serious difficulties, starting from the fact that no diplomatic relations existed between Poland and the FRG. The Polish government raised this issue with the UN (formal notes were submitted in 1960 and 1969), but Bonn’s position was unyielding. In a confidential report for the Political Bureau of the Central Committee of the Polish United Workers’ Party (PZPR) of 27 April 1968, the Ministry of Foreign Affairs explained that the FRG “basically took a position that the indemnification issue could be resolved only in a peace treaty with a united Germany”. Although the Bonn government started paying out compensations to various categories of people who had been subject to repressions by the Third Reich, any claims arising from ethnic persecution—which applied to a solid majority of the Polish victims of German terror—could not be pursued. Furthermore, to make compensation even less obtainable for Poles, a regulation was adopted that the disbursement of damages outside the FRG was conditional upon the existence of diplomatic relations with the country of the beneficiary. Besides this regulation, the FRG authorities took the position that compensating for damages was an act of humanitarian relief rather than fulfilment of a legal obligation.

During negotiations on the normalisation of relations between the PRL and the FRG, the West German negotiators cited the Bierut government’s statement, emphasising persistently that the problem of “claims arising from World War II” should not be raised any longer. Władysław Gomułka’s team had no intention of addressing the issue at the time anyway, their absolute priority being the recognition by West Germany of the Oder-Neisse border. On May 6 1968 the Political Bureau of the PZPR Central Committee decided that the issue of compensations should be kept off the agenda.

Yet, this decision was not final. A new impulse came on 26 November 1968, when the UN General Assembly adopted the Convention on the Non-Applicability of Statutory Limitations to War Crimes and Crimes Against Humanity. The Polish MFA recommended that “a clear distinction be made at all times between war reparations and civil-law claims”. On May 1970, a Commission for the Study of the Problem of War Damages was set up under the auspices of the Ministry of Finance. The Commission was tasked with “determining Poland’s losses and damage which had arisen in connection with World War II and which can constitute a basis for Poland’s claim for indemnification against the Federal Republic of Germany”.

During the Poland-West Germany negotiations of the bilateral treaty (eventually signed on 7 December 1970), FRG representatives sought a confirmation of the 23 August 1953 declaration, but failed to push through the inclusion of a provision about the waiver of reparations by Poland. In addition, Warsaw was considering the possibility of challenging that statement on the grounds of its interim character (pending the adoption of a peace treaty) and its vagueness. To this day, the Germans quote the words of Vice Minister of Foreign Affairs Józef Winiewicz, who said during treaty negotiations on 5 October 1970: “We do not see [...] the need to discuss the reparations problem. The 1953 statement of the Polish government remains in force and it contains a waiver of reparations. That declaration is known and from its content it can be deduced what position the Polish government will take and what impact this will have on the future”. The snag is that this verbal confirmation, not having been made in public, carried limited weight. Besides, towards the end of that round of negotiations, Winiewicz said: “We do not know today how the reparations issue would turn out at a peace conference. We have said that today, 25 years after the end of the war, we are moving away from the concept that was binding then. The interpretation presented in the report is correct, but the matter may look differently if there is a peace treaty”.

Meanwhile, the “Preliminary Report for the Chairman of the Council of Ministers on the Matter of German Damages” submitted by the Commission for the Study of the Problem of War Damages on 1 December 1970, included arguments that could be used to undermine the validity of the Bierut government’s declaration.

During his meeting with Chancellor Willy Brandt on 7 December 1970, Gomułka said: “It is common knowledge that back in 1953 the Polish government waived reparations from Germany as a whole, which included the FRG. We shall not return to this issue regardless of how we might see it today”. These words had limited legal value, however, because as First Secretary of the PZPR Central Committee Gomułka was not a state official, but a rank-and-file MP. Even so, it is worth noting that he told the chancellor he would be prepared to waive claims for individuals in exchange for a large credit facility for Poland with an advantageous interest rate.

The indemnification issue resurfaced during Foreign Minister Stefan Olszowski’s first visit to Bonn on 13-14 September 1972. His counterpart, Minister Walter Scheel, observed that “under the 1953 London convention which the FRG was a party to, the matter of reparations and damages was deferred pending a peaceful settlement of the German issue and it was to be negotiated with a future all-German government”. He added that “Poland waived, of its own free will [sic! – S.Ż.] its reparation claims against Germany”. As for the Federal Republic, “it does not feel authorised to address the indemnification question prior to a peace conference; pending the summoning thereof, these issues should be put aside, for it cannot be ruled out that other East European countries will bring up similar claims”. Chancellor Brandt, for his part, told Minister Olszowski, that he was encountering internal obstacles over the indemnification issue, in particular “from the younger generation, which was not responsible for the damage wrought and as such unwilling to identify with the offences and crimes perpetrated by a part of the older generation”.

Speaking in Poznań in late March 1973, Gomułka’s successor, Edward Gierek, pointed out that “the account had yet to be settled for the damage inflicted upon the Polish nation by the criminal Nazi system, for losses this society would continue to feel for a long time to come”. But with Poland’s room for manoeuvre seriously restricted at the time by attempts to obtain more loans, the government in Warsaw succeeded only in negotiating an agreement (of 16 November 1972) on the payment of DM 100 million to Polish victims of pseudo-medical experiments, followed by the 1975 agreement on the satisfaction of pension claims (a lump sum of DM 0.7 billion, subsequently increased to DM 1.3 billion). At the same time, the FRG government refused to authorise payments to prisoners of German camps.

The problem of individual claims remained open throughout the 1980s. The Polish government repeatedly brought up the matter, but Bonn’s position was unyielding. In an urgent, confidential memorandum of 13 February 1986, Foreign Minister Marian Orzechowski stressed that although on 23 August 1953, the Polish government had “waived war indemnification (reparations) from Germany […], contrary to subsequent interpretations by the FRG, Poland had not surrendered the prosecution of individual claims for war crimes and crimes against humanity”. The minister recommended a resumption of indemnification claims against the FRG government, and a voluminous diplomatic note on the matter was submitted to the German MFA in December 1986, denying in particular the allegations that Poland had waived all indemnification claims in 1975. The German federal government replied that the PRL had waived all kinds of claims in 1953, had confirmed this in 1970, and had made no claims in 1975 (it is interesting to note that the FRG no longer insisted a waiver had been made in 1975 as well). Another argument was that, under the London agreement, the matter of reparations had been deferred pending the conclusion of a peace treaty. What’s more, the Bonn government objected to dividing indemnification into benefits for the state and benefits for citizens. The PRL government submitted another note to Bonn in October 1988, with similar effect.

After Poland’s 1989 political changeover, indemnification remained one of the focal points during negotiations with the FRG. Answering a question from  one of the members of the Sejm (lower house of parliament), Minister of Foreign Affairs Krzysztof Skubiszewski confirmed on 16 October 1989 that “the 1953 disastrous waiver of claims” remained legally binding, but he promised to support attempts to secure payment of individual compensations. In a message to FRG President Richard von Weizsäcker on 7 November 1989, Polish President Wojciech Jaruzelski wrote about the need “to provide material and moral compensation” to the victims of German terror during the occupation.

The November visit of Chancellor Helmut Kohl to Poland was hailed as a new opening in Polish-German relations, yet even then the head of the West German government remained adamant, despite the insistence of Polish Prime Minister Tadeusz Mazowiecki. Kohl stressed that he did not want to create a precedent that would encourage other countries to press their own claims. As a result, the subject of damages was omitted altogether from the voluminous joint declaration of the two prime ministers. Asked about this at the 16 November press conference, Chancellor Kohl replied: “I consider some of the demands for damages, which I have heard here in Poland, unrealistic. We do recognise human tragedy, but the FRG has already paid certain benefits to Poland and, overall, it has borne a huge burden of disbursing to various countries DM 100 billion in damages”.
On 2 February 1990, an adviser to the chancellor, Horst Teltschik, noted in his diary that the chancellor had instructed the government spokesman to make a statement outlining, for the first time, “two demands” addressed to Warsaw: “Poland must waive indemnification and it must create a prospect for the regulation, under a treaty, of the rights of its German minority”. Teltschik added that Kohl “wanted to stave off Polish demands raised by Sejm Speaker Mikołaj Kozakiewicz from the Polish Peasants’ Party (PSL), who had spoken of damages on the order of DM 200 billion”.

But the Mazowiecki government did not address the issue of reparations, so Bonn’s apprehensions were premature. Asked about the indemnification problem by Prime Minister Margaret Thatcher on 12 February 1990, the Polish prime minister explained that he only sought guarantees of the inviolability of the Oder-Neisse border. On the other hand, summing up his visit to Germany (5-8 February), Minister Skubiszewski declared that the Polish “initiative to look for extra-legal, pragmatic ways to resolve the problem of indemnification had not been rejected and was being examined by appropriate ministries in the FRG”. He added that a foundation ought to be established “with the task of providing financial aid to the injured parties”.
On 27 February 1990, an expert opinion was prepared for Chancellor Kohl, recommending that a treaty on cooperation and good partnership be signed with Poland after the unification of Germany. The treaty was to contain, besides the final recognition of the border, a waiver of reparations by Poland, as well as Poland’s commitment to respect the rights of the German minority. Drafters of the opinion argued that a confirmation of the Polish waiver of reparations would be well-received by the German public. Another expert opinion, dated 6 March, held that Poland’s pursuit of individual claims should be seen as a pursuit of reparations which the PRL had waived in 1953, although the document did not rule out some disbursements through a foundation established for the purpose.

On 6 March, the West German ruling coalition parties endorsed a joint resolution, linking the inviolability of the border with Poland with the indemnification issue. This version held no demands, as Kohl had modified his position under the influence of Foreign Minister Hans-Dietrich Genscher. In the Bundestag debate on 8 March, CSU’s Wolfgang Bötsch, speaking for the Christian fraction, insisted that in 1953 the PRL had waived not just reparations, but any and all civil-law claims for damages. The chancellor reiterated in turn that he was setting no additional conditions on the recognition of the Oder-Neisse border—but at the same time, he mentioned the waiver of reparations by Poland and the rights of the German minority. The opposition sharply attacked this informal linkage between the recognition of the border and the other two issues on the grounds that this evidently awkward move was likely to be associated with blackmail, or at best with pressure.

The matter of reparations for Poland continued to trouble Chancellor Kohl. On 12 March, during an off-the-record conversation with selected journalists (including Daniel Luliński of Trybuna Ludu), he denied having created a “iunctim between reparations and the cultural rights of persons of German descent on the one hand, and a border treaty on the other”. He said, however, that he expected “the government of Prime Minister Mazowiecki to publish a unilateral statement” or to send “a letter with assurances to that effect”. He explained this as follows: “I know the Poles, I must be careful and I cannot leave the matter of reparations on the table. It was left there 20 years ago, under different chancellors, and it is still there”. The obvious inference was that he realised Poland could successfully challenge the validity of the Bierut government’s 1953 declaration. “Since a treaty with Poland will be a peace agreement settling the border issue, we cannot leave the matter of reparations open”. Kohl complained that he had been approached in this respect by the Israeli ambassador and “other countries were also waiting for an opportunity”. He pointed out that since 1980, Poland had received from the FRG an estimated DM 8 billion in aid “inclusive of parcels and the present loan guarantees”, stressing that he was “prepared to extend further meaningful economic aid to Poland. I understand the plight of the Mazowiecki government, but the reparations issue must be taken off the table”.

And so, even though the Polish government was not raising the matter of reparations, Chancellor Kohl was seeking additional formal assurances from Warsaw. In talks with his allies in 1990, he complained that now, so many years after the war, Poland was claiming the very same reparations it had waived back in 1953. He argued that if this matter were allowed to come under discussion, other states would also make financial demands. In this respect, he secured the support of U.S. President George H.W. Bush as early as late February 1990, during Camp David talks. In contrast, the president of France was critical of the iunctim between border recognition and reparations, and Kohl had to explain to President François Mitterrand (in a phone conversation on 14 March 1990) that he was not setting any conditions on Poland but merely “expressing a wish” that Warsaw “re-affirm its 1953 and 1989 statements on reparations and on the German minority”. Talking to Hungarian Prime Minister József Antall on 21 June, Kohl complained that the Poles had not withdrawn publicly their reparation demands: “It’s absurd to speak of reparations when at the same time they are demanding that we ultimately give up one-fourth of the former area of the Reich, excluding the lands captured by Hitler.”

The legal position of the Federal Republic rested from the very outset on pointing to an absence of a conference ending World War II and the need for a peace treaty. Kohl brought up the latter issue during a Bundestag debate on 8 November 1989, , as well as during his November visit to Poland. Several weeks later, it became clear that the West German government was firmly against signing a peace treaty. On 25 February 2015, the weekly Der Spiegel published fragments of documents dated February-April 1990—the time of Kohl and Genscher’s most energetic efforts in this respect. It turned out that the diplomatic mini-offensive had in fact been prompted by apprehension that the problem of war reparations might crop up, especially bearing in mind that under the London agreement reparations were to be regulated in a peace treaty. By 30 April, a decision was taken that the instrument under negotiation was “a treaty on the final regulation in respect of Germany”. The document signed in Moscow on 12 September made no mention whatsoever about reparations. Recalling this, Michael Stürmer wrote recently in Die Welt (14 September 2017) that the side-tracking of this matter was a “masterpiece of diplomacy”.

Nevertheless, the view that the 2+4 treaty closed all World War II-related issues with respect to Germany has since been challenged precisely because of different indemnification claims (France, the Netherlands, Russia, and other countries). Neither were indemnity-related matters addressed in the Polish-German Treaty on Good Neighbourhood and Friendly Cooperation signed on 17 June 1991, although a Polish-German Reconciliation Foundation was set up and endowed with a relatively small amount of DM 500 million for “victims of Nazi persecution” (an agreement of 16 October 1991). Meeting with Prime Minister Mazowiecki on 8 November 1990, Chancellor Kohl reiterated that these funds were not to be construed as compensation but “just as support, as aid”, the “former Polish government having waived indemnification”. It was not until 2000, after years of difficult negotiations, that Germany agreed to make a one-off payment for partial damages to surviving former Polish victims of forced and slave labour. However, all this was “done voluntarily” (ex gratia).

The matter of reparations was resurrected briefly in 2004, when on 10 September the Sejm adopted (with just one abstention) a resolution declaring that “Poland had not yet received adequate financial compensation and war reparations for the immense devastation and tangible and intangible losses caused by the German aggression”. MPs called on the government to “take appropriate steps” addressed to the German government, but this recommendation was rejected by the then-government of the Republic of Poland, which considered reparation claims as legally unfounded. It was only in 2017 that the debate on indemnification claims resurfaced with a vengeance.

It appears that the legal path to obtaining compensation for the losses and damage wreaked by the German aggression and subsequent occupation is closed for Poland. This is not to say, however, that the matter is closed—surely not politically and definitely not morally. 

The Royal Castle in Warsaw - burning 17.09.1939
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