Prospects dim for accord on paying Nazi-era slave laborers

German-American negotiations on a proposed multibillion dollar compensation package for Nazi-era slave laborers are on the verge of collapse after missing a deadline this week. Lawyers representing the former victims have rejected the latest - and apparently final - 8 billion mark ($4.2 billion) offer from Berlin.

A breakdown of the talks threatens to unleash a flood of class-action lawsuits in the US against German corporations, strain bilateral relations, and leave the long-neglected survivors of Hitler's forced-labor regime empty-handed.

"It is the unanimous opinion of all counsel that the offer at that level is unacceptable," wrote the lawyers representing former slave laborers this week. Attorneys say they will continue to talk only if German negotiators increase their offer by at least $1 billion.

In a letter to President Clinton, Chancellor Gerhard Schrder reportedly reiterated that the German offer, funded by government and industry, is final. But in an interview yesterday on German television, chief German Holocaust negotiator Otto Lambsdorff called on lawyers to produce a concrete counterproposal.

There may be more than 2 million survivors eligible, including 250,000 slave laborers from concentration camps and at least 480,000 others who were deported from Nazi-occupied Eastern Europe to work in German factories and farms. Most are non-Jews living in the former Soviet Union.

As long as there is no official statement from Deputy Treasury Secretary Stuart Eizenstat, the chief US negotiator, a spokesman for the special compensation fund set up by German industry says he doesn't consider the month-long negotiations to have failed. Advocates for Nazi victims express hope for an agreement. "It's too early to say that the negotiations have failed," says Deidre Berger, director-designate of the American Jewish Committee office in Berlin. "I hope they don't break down because they just can't get through that last stretch."

Only $600 per person

The last stretch carries a billion-dollar price tag, which the representatives of slave laborers say makes a crucial difference. "From the 8 billion marks, only two-thirds at the most would go to compensation for forced labor, the rest to property issues, other damages, administrative costs, and a future fund," says Andreas Plake of the Cologne-based Federation for Persons Persecuted by the Nazi Regime. He calculates that each former laborer could end up with less than $600.

The German government envisions sharing a compensation fund with industry that would eliminate all future legal claims against German businesses. So far, only 60 companies have volunteered to take part, although nearly all branches of the Nazi-era economy employed forced labor.

Wolfgang Gibowski, spokesman for the fund, says there is simply no more money. "Where should it come from?" he asks. "There is no legal obligation."

To many in Germany, the emphasis on the missing billions overshadows the suffering of survivors. "I thought the German media focused almost exclusively for many months on the details of the financial negotiations," says Ms. Berger. "I'm very disappointed that there weren't more articles about the forced-labor system ... about the victims and what they suffered."

Some observers have said that dragging out these latest negotiations could have a negative impact on public opinion in Germany, which since World War II has paid some $60 billion in damages for Holocaust-related crimes.

Lawsuits and boycotts

If the negotiations are called off and the compensation fund falls through, German industry could be swamped with a new flood of lawsuits and calls for a boycott of German products. "Parts of German industry still have not grasped how dangerous this will be for German-American relations," says Berger, referring to German industry's strong reliance on exports. She adds that US politicians could turn the matter into a campaign issue.

Many critics of German industry here hint that in the end, it will be more cost-effective for businesses to steer clear of the fund and deal with compensation claims on a case-by-case basis.

Mr. Gibowski of the Germany industry's compensation initiative voices skepticism about the effectiveness of a boycott or legal action in helping victims. "I don't think it's a gigantic threat to German industry. To boycott consumer products is very, very difficult," he says. Gibowski adds that lawsuits could drag on for years and that there are no legal precedents favoring victims.

"So what do you have from that?" he asks. "To haggle about money and to let the people die? Or to give the people the money?"

(c) Copyright 1999. The Christian Science Publishing Society