Germany to settle WWI debts at the weekend
Source: Agencies |
October 1, 2010, Friday
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GERMANY marks 20 years since reunification with pomp and ceremonies on Sunday - and a final payment for outstanding interest due on loans dating back to the end of World War I.
The last installment will be paid on Sunday, as the country makes good on a 1953 international agreement, Germany's Office for Central Services and Unresolved Property Issues (BADV) said yesterday.
Germany issued several series of bonds in the 1920s and 30s to help pay for WWI reparations demanded by the victorious Allies and to bolster its economy. When the Nazis came to power in 1933, they suspended all payments.
Following World War II, Germany worked together with the United States, Britain and other European nations to hammer out an international agreement known as the 1953 London Treaty that stipulated how Germany should repay its outstanding debts, including the old bonds.
The treaty dictated that holders of bonds were to bring them in to be reissued so that they could be reimbursed. It also allowed for payment on the outstanding interest accrued from the end of the war in 1945 to the year the treaty was formalized in 1953 - roughly 150 million euros (US$200 million) - to be suspended until Germany reunified and then paid in installments over 20 years.
"The sum is actually not so large that it couldn't have been paid off directly following reunification," said Axel Hermann of BADV. "But Germany stuck to the London Treaty."
The London Treaty also set up the validation process for the outstanding bonds, most of which were reissued by 1958.
Anyone in possession of an old bond can still have it reissued through a complicated process, including proving they or their relatives held the bond already in 1944 - a step to ensure stolen or forged papers are not recognized.
The last installment will be paid on Sunday, as the country makes good on a 1953 international agreement, Germany's Office for Central Services and Unresolved Property Issues (BADV) said yesterday.
Germany issued several series of bonds in the 1920s and 30s to help pay for WWI reparations demanded by the victorious Allies and to bolster its economy. When the Nazis came to power in 1933, they suspended all payments.
Following World War II, Germany worked together with the United States, Britain and other European nations to hammer out an international agreement known as the 1953 London Treaty that stipulated how Germany should repay its outstanding debts, including the old bonds.
The treaty dictated that holders of bonds were to bring them in to be reissued so that they could be reimbursed. It also allowed for payment on the outstanding interest accrued from the end of the war in 1945 to the year the treaty was formalized in 1953 - roughly 150 million euros (US$200 million) - to be suspended until Germany reunified and then paid in installments over 20 years.
"The sum is actually not so large that it couldn't have been paid off directly following reunification," said Axel Hermann of BADV. "But Germany stuck to the London Treaty."
The London Treaty also set up the validation process for the outstanding bonds, most of which were reissued by 1958.
Anyone in possession of an old bond can still have it reissued through a complicated process, including proving they or their relatives held the bond already in 1944 - a step to ensure stolen or forged papers are not recognized.
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