Germany Agrees to Pay $5 Billion to Nazi-Era Slave Laborers

By DANIEL J. WAKIN 

Germany signed an agreement today to provide $5 billion in compensation to former slave and forced laborers of the Third Reich, an act intended to bring to closure, at least financially, more than 50 years of expiating Nazi wrongs. 

The establishment of the compensation fund ends more than a year of difficult negotiations between representatives of the United States, the German government and German industry, which had been faced with a raft of class-action lawsuits by victims. The settlement opens the door for payments before the end of the year. 

The creation of the fund is "above all a gesture of moral responsibility," said Germany's foreign minister, Joschka Fischer. "It can't undo the suffering that the victims went through, and unfortunately it also comes too late for many," he said in Berlin. "In the end, it's an acceptable compromise for all, and that's what's important." 

Some of the biggest names in German industry have agreed to contribute to the fund. They include DaimlerChrysler, Deutsche Bank, Siemens, Volkswagen and the German subsidiaries of General Motors and Ford. All told, some 3,000 companies are contributing. 

But many smaller companies have refused to pay, arguing that they did not use forced labor or were bankrupt in the war, and German industry has fallen far short of its goal. 

Under the agreement, the government will supply half the fund, and industry the other half. But companies have pledged only about $1.5 billion, about $1 billion off the mark. 

Former slave laborers and concentration camp prisoners forced to work in torturous conditions will be entitled to one-time payments of 15,000 marks, or slightly less than $7,500. Former forced workers -- those pressed into labor in factories for paltry wages -- will receive up to 5,000 marks, or $2,500. Funds also will be presented to the victims of Nazi medical experiments and those whose property was seized. 

Most of the former forced and slave laborers live in central and eastern Europe and Russia. Along with American and German government officials, representatives of Poland, Russia, Ukraine, Belarus, the Czech Republic and the Jewish Claims Conference signed the agreement. 

The fund would provide large-scale compensation to the former workers for the first time. Over the past half-century, the German government has paid more than $50 billion in compensation to various other groups and Israel. 

German corporations had long resisted payments. But a new wave of class-action suits in the United States and the election of Gerhard Schroder in late 1998 as German chancellor led to the agreement. The companies saw the prospect of billions of dollars in damages, and Mr. Schroder reversed the policy of his predecessor, Helmut Kohl, by immediately pushing for compensation. 

"Germany learned many things about itself and its past during the negotiating process, and openly discussed what had been suppressed all too willingly and successfully for a long time," Mr. Fischer said. 
 

Along with signing off on the fund, officials today agreed on a legal declaration devised by the Clinton administration urging courts to dismiss any future class-action claims on the grounds that the compensation from the fund is the best recourse.