After World War II, both the Federal Republic and the Democratic Republic of Germany were obliged to pay war reparations to the Allied governments, according to the Potsdam Conference. Italian, Romanian, Hungarian, Bulgarian and Finnish reparations were determined in the Paris Peace Treaties. Austria was not included in any of these treaties. Japan's reparations were determined in the Treaty of San Francisco.
Payments According to the Yalta Conference, no reparations to Allied countries would be paid in money (though that rule was not followed in later agreements). Instead, much of the value transferred consisted of German industrial assets as well as forced labour to the Allies.Pavel Polian-Against Their Will: The History and Geography of Forced Migrations in the USSR Central European University Press 2003 P.244-249 The Allied demands were further outlined during the Potsdam Conference. Reparations were to be directly paid to the four victor powers (France, United Kingdom, United States, and the Soviet Union); for the countries in the Soviet sphere of influence, the Soviet Union would determine its distribution. To coordinate the distribution of the reparations between the victor powers, the Allied Control Council was established.Cook (2013), pp. 461-462.Rumpf (1973), p. 346.
The Allies finally agreed for German reparations to be paid in the following forms: Dismantling of the German industry Transferring all manufacturing equipment, machinery and machine tools to the Allies Transferring all railroad cars, locomotives and ships to the Allies Confiscation of all German investments abroad All gold, silver and platinum in bullion or coin form held by any person/institution in Germany All foreign currency All patents and research data relevant to military application and processes Requisition of current German industrial production and resource extraction Forced labour provided by the German population
To oversee the extraction and distribution of the German reparations in their control zone, the Western Allies established the Inter-Allied Reparations Agency (IARA). The distribution of the reparations from Germany was to be allotted by a pre-determined percentage to which the victor powers agreed to. German reparations were to be classified into two categories: A (all forms of German reparations except those included in Category B) and B (industrial and capital equipment, merchant ships, and inland water transports).
The following nations received reparations as part of the proceedings of the IARA:
+ Allotment of German reparations by the Western AlliesCook (2013), p. 462.Country% of Category A reparations% of Category B reparations0.050.350.700.952.704.503.004.303.501.500.250.35 Egypt0.050.2016.0022.802.703.35 India2.002.900.150.401.301.900.400.603.905.60 South Africa0.700.1028.0027.8028.0011.806.609.60
was to be excluded from the proceedings of the IARA by demand from the Soviet Union. The Allies agreed as part of the Potsdam Agreement, that the Soviet Union collects and distributes the Polish share of reparations. Furthermore, the Soviet Union would extract its share of reparations mostly from the territory in its own occupation zone. The Provisional Polish Government concluded the Polish-Soviet Reparation Treaty on 16 August 1945. The treaty allocated Poland's share of confiscated German machinery, goods and raw materials. Furthermore Poland received 15% of the German merchant fleet acquired by the Soviet Union. Deliveries were overseen by a joint Polish-Soviet commission and lasted until 1953.Roth (2022), pp. 149-150; 158-160.Hinrichsen (2023), p. 133
Territorial changes
The Soviet Union annexed the German territories east of the Oder-Neisse, leading to the expulsion of 12 million Germans (from East Prussia, Pomerania and Silesia). These territories were incorporated into communist Poland and the Soviet Union respectively and resettled with citizens of these countries, pending a final peace conference with Germany. Since a peace conference never took place, the areas were effectively ceded by Germany.; ; In the case of Poland, the acquired territory was a compensation for the Polish Eastern Borderlands (Kresy), which were annexed by the Soviet Union.
France occupied the Saar protectorate from 1947 to 1956, with the intention of using its coal and steel industrial output to boost the French economy as reparations for the war. France sought to ultimately annex the Saar as well as the entire Ruhr region into France proper, but was denied so by the rest of the Allies. Following the results of a plebiscite, France had to relinquish its control of the Saar region on 1 January 1957.Dieter-Mueller et al. (2008), pp. 366; 370ff.
The Netherlands sought to annex large parts of Western Germany as reparations for WWII. These efforts were mostly thwarted by the Western Allies and ultimately only approximately of German territory was annexed in 1949. Nearly all of these territories were returned to the Federal Republic of Germany in 1957. Under the Dutch-German treaty made in The Hague on 8 April 1960, West Germany agreed to pay to The Netherlands the sum of 280 million German marks in compensation for the return.
Belgium and Luxembourg also sought to annex German territory as reparations for WWII. However, only small areas were occupied and then returned after German compensation payments.
Dismantling of industries
At the beginning of the occupation, the Allies dismantled the remnants of German industries. Plants and machinery were dismantled, the railroad system deconstructed and everything was transported to the Allies. The German merchant fleet and all other ships were handed over. Foreign stocks of about 2.5 billion dollars were confiscated. The remaining German industries had to give up a share of their production to the Allies. Large shipments of steel, coal, but also other industrial products were seized and transported out of the country. Later the Western Allies softened their stance in favour of the Marshall Plan, while Eastern Germany continued to deliver industrial goods and raw materials to the Soviet Union until 1953.
Dismantling of rail infrastructure
In the Soviet Zone of Occupation (later the German Democratic Republic) virtually all double tracked rail lines were reduced to a single track with the material being taken to the Soviet Union. Similarly the (relatively limited) railway electrification was also dismantled with the notable exception of most of the Berlin S-Bahn which retained its third rail infrastructure for the most part.
Similarly, in the French Occupation Zone, key rail lines were dismantled to single track.
Intellectual property
The Allies confiscated large amounts of German patents, copyrights and trademarks worth about 10 billion (1948) dollars.Hinrichsen (2023), p. 141
Forced labour
Millions of Germans were pressed into forced labour for several years to work for the Allies in camps, mining, harvesting or industry.
Occupation costs After World War II ended, the main four Allied powers – Great Britain, The United States, France, and the Soviet Union – jointly occupied Germany, with the Allied occupation officially ending in the 1950s. During this time, Germany was held accountable for the Allied occupation's expenses, amounting to over several billion dollars.
Holocaust victims Germany concluded a variety of treaties with Western and Eastern countries as well as the Jewish Claims Conference and the World Jewish Congress to compensate the victims of the Holocaust. Until 2005 about 63 billion euros (equivalent to approximately 87.9 billion euros in 2022) have been paid to individuals. Additional payments by German companies which exploited forced workers have been made.
Recipients
Poland Payments From 1949 to 1953, East Germany shipped goods and industrial resources to Poland as part of the Soviet Union's reparations share, under the Polish-Soviet reparations agreement of 16 August 1945.Roth (2022), pp. 147-150; 344-345. Poland also received its share of the German merchant fleet, amounting to 14 seagoing ships totalling about 52,000 GRT as well as a few auxiliary and unfinished vessels. These included SS Olsztyn, ORP Gryf, SS Jagiełło and SS Kolno. The total value of reparations paid by East Germany to Poland amounted to US$10.2 billion in 1938 dollars, equivalent to US$180.54 billion in inflation-adjusted 2018 dollars.
Beginning in 1972, West Germany concluded several bilateral treaties with Poland aimed at directly compensating victims of Nazi Germany. Victims of pseudo-medical experiments received 100 million Deutsche Mark in compensation.Roth (2022), p. 216.Rumpf (1973), p. 355. In 1975, as a result of the Helsinki Accords negotiations, West Germany paid 700 million Deutsche Mark to Poles who had paid into the German social security system during the Nazi occupation but received no pension. An additional 600 million Deutsche Mark was paid to Poland as "political compensation". Furthermore, Poland received a long-term loan of 1 billion Deutsche Mark on favourable interest terms. Payments to Polish Holocaust victims as part of the 1980 "Hardship Fund" of the Claims Conference amounted to about 500 million Deutsche Mark.Roth (2022), p. 345.
Unified Germany established several foundations to provide additional compensation. The Foundation for Polish-German Reconciliation paid 500 million Deutsche Mark to victims of Nazism. An additional €42.7 million was provided by the Austrian "Reconciliation, Peace and Cooperation" fund. Roth (2022), pp. 270-271. The Foundation Remembrance, Responsibility and Future paid a total of €1.232 billion in compensation to former concentration camp inmates and civilian forced labourers.Roth (2022), pp. 276-278; 345.
History and political developments On 23 August 1953, the People's Republic of Poland, under pressure from the Soviet Union which wanted to free East Germany from any liabilities, announced it would waive its right to further war reparations from East Germany on 1 January 1954. In a United Nations note, dated 24 November 1969, the communist government of Poland demanded action from the organization not only to punish war criminals and those who have committed crimes against humanity but also to establish procedures and divisibility of compensation for war crimes and damages committed by Germany during World War II. In 1970, the 1953 renunciation of reparation rights was confirmed by the Polish Deputy Minister of Foreign Affairs Józef Winiewicz during the course of the negotiations leading to the normalization treaty of November 1970, in which West Germany recognized the Oder-Neisse as the final border between Poland and East Germany.