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Germany: Industry Fulfills Obligation To Nazi Slave Fund

A German industry foundation has announced that businesses have finally contributed their share of 10 billion marks -- or about $4.8 billion -- to compensate more than one million slave laborers forced to work during the Nazi regime. German government and industry first agreed last year to set up the compensation fund. In return, U.S. courts were to drop any current and future lawsuits seeking compensation. RFE/RL Munich correspondent Roland Eggleston reports that this most recent move was welcomed, but that hurdles remain.

Munich, 14 March 2001 (RFE/RL) -- German industry has now agreed to pay its share of a fund to compensate about a million men and women who were forced to work as slave labor in German factories during the Nazi era.

The German government and negotiators for the victims reached agreement on the compensation fund in March last year. It provides a total sum of about 10 billion German marks, or almost $5 billion. Half of the money was to have been paid by the government and half by German companies.

The government fulfilled its commitment several months ago. Industry had already paid about two-thirds of its share into the fund, but had been slow to provide the rest because it wanted guarantees it would be protected from separate lawsuits in U.S. courts.

More than 6,000 companies are involved in the initiative, but the problem lies with 17 companies that are facing possible class-action suits in the U.S. from former slave laborers. They have declined to pay their share without guarantees that these suits will be dropped.

The U.S. had said it would not provide those guarantees until the money had been paid. The deadlock continued for almost a year and has meant that payments have yet to be made to the elderly slave laborers.

The breakthrough came yesterday as the result of a personal initiative by German Chancellor Gerhard Schroeder at a meeting with leading industrial representatives.

The talks were private but those who took part said Schroeder used two arguments. He said industry's failure to honor its promise was damaging the country's image. Schroeder also argued that the longer industry delayed, the greater the likelihood that individual claims would be presented in U.S. courts.

This was a powerful argument. Only last week a New York judge provisionally accepted a class-action suit filed by victims of the Nazis against German banks. The decision shocked Germany. Commentators were unanimous in warning business and industry that time was running out for them to pay their share of the compensation fund.

In the wake of yesterday's meeting, when industry representatives agreed to pay their remaining one-third owed to the fund, Schroeder says he is satisfied that industry has finally taken action.

"Naturally, I am happy that we can now satisfy the conditions for making payments. The German business community has accepted its moral responsibility -- and that is good. Certainly one factor was the damage which industry's image would otherwise have suffered on the international markets."

However, not all problems have been solved. Some companies are still demanding stronger guarantees that they will not be the target of legal action in the United States in the future. Schroeder is meeting with their representatives in Berlin tonight. Lawyers say that until these concerns are settled, no payments can be made to the surviving slave laborers.

The government's commissioner for the forced labor fund, Otto Lambsdorff, told journalists today that there are about one million survivors and that many of them are in poor health.

His comments were backed up last week by the Czech commissioner on the slave labor issue, Jiri Sitler. He told journalists his office receives 15 death notices a day from former slave workers.

The agreement reached in March last year stipulates that each victim will receive around $2,500 -- although some who worked under especially inhumane conditions may receive up to $8,000.

The agreement allocates about $906 million to Poland and the same amount to the main Jewish claimant among the negotiators, the Jewish Claims conference. Some $862 million will go to Ukraine, $418 million to Russia, $347 million to Belarus and $212 million to the Czech Republic. Another $400 million will be divided among other countries.

Around $25 million has been set aside for those who suffered particular health damage from Nazi medical experiments. Other sums cover possible claims against German insurance companies for the seizure of Jewish assets and for what are called "humanitarian claims."