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The claim for reparations is a sign of financial frustration

24 March 2015 / 12:03:16  GRReporter
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World War I is a very telling example. The huge reparations imposed on Germany, Bulgaria and the other defeated countries could not be paid. Eventually, several international meetings and conferences were held to find a solution to the problem.

In 1923, when the inter-allied commissions became aware that Bulgaria could not pay the reparations they allowed for deferments. In 1924, the German reparations were deferred under the so-called Dawes Plan, which was followed by another deferment of the already alleviated payments. In 1928 and 1930 the reparations were again deferred and actually the reparations due after World War I were officially "buried" because of the outbreak of the so-called Great Depression, which spread all over the world from 1929 to 1933. Then it became absolutely impossible for countries to pay any such debts.

Bulgarian reparations after World War I and the Mollov-Kafantaris Agreement on population exchange

A problem in the Bulgarian-Greek relations emerged again and actually, we have to say that reparations were one of the issues that seriously irritated the interstate contacts between the two countries because they led to significant differences between them. And often the disagreement on this issue was the cause of a poor overall development of bilateral relations.

Bulgarian-Greek relations between the two world wars were complicated by the fact that an agreement on voluntary exchange of populations was added to the Peace Treaty of Neuilly in 1919 at the proposal of the Greek side. Its idea was to replace Greeks from Bulgaria with Bulgarians from Greece while the states should pay them for the properties that they would leave. Ultimately, this convention developed and lasted until the end of the 1920s. It turned out that the number of Greeks who left Bulgaria was considerably lower than the number of Bulgarians who left Greece. The result was a pretty significant balance in favour of Bulgaria that the Greek state had to pay to Bulgaria to compensate the refugees from Western Thrace and Aegean Macedonia.

At one point, this problem was particularly associated with reparations. In 1931, at the height of the financial crisis, when it became clear that the payment of interstate debts was not possible, US President Hoover of the time offered a one-year moratorium on all reparation and war payments.

Bulgaria took advantage of it and suspended payments of repatriations to Greece. In response, however, Greece suspended payments under the exchange of population agreement, known as the Mollov-Kafantaris Agreement. A long dispute began that reached The Hague. Bulgaria argued that it was not an interstate debt but a debt to individuals who had left their properties in Greece and therefore it could not benefit from the Hoover moratorium.

Anyway, many financial problems between Bulgaria and Greece remained pending and unresolved, including the reparations and the Mollov-Kafantaris Agreement on population exchange.

Reparations after World War II

World War II came as a surprise and things became even more complicated. On 1 March 1941, Bulgaria joined the Tripartite Pact and the allies of Germany. Then subsequently, Germany waged war against Yugoslavia and Greece. Bulgaria was not involved in the military campaign. It did not declare war and even concluded an agreement under which the German troops passing through Bulgaria were not entitled to use the Bulgarian railways.

Anyway, Greece would claim that the Germans had carried out the attack through Bulgaria. Having defeated Greece, the same April Germany entitled Bulgaria to administer the so-called "new lands" - Vardar Macedonia in Yugoslavia and the Aegean Sea region in Greece. The Bulgarian troops entered those areas where Bulgarian administration was established. This situation lasted until September 1944, when Bulgaria left the Tripartite Pact, Soviet troops entered its territory and it joined the anti-Hitler coalition. It was even involved in direct military battles against Germany in the last year of the war.

Here the problem of reparations appeared again and once again it was clear that they were estimated absolutely arbitrary, without the presence of sufficiently clear descriptions of what exactly was destroyed - what percentage of the railway network, how many mines, what part of urban space... There were no clear and precise estimates.

Initially, the Greek side had estimated extremely high amounts. It wanted the Bulgarian side to pay $750 million for the so-called Bulgarian occupation. This was a huge amount at that time. I would say that Bulgarian responses were highly grounded, although they were provided by representatives of the communist power. In fact, it used experts from the old ministries. That is, apparently very experienced people who provided highly grounded responses and rebutted all claims for such reparations point by point. Moreover, because Bulgaria considered these lands not as a temporary commitment but as lands that would be integrated into the Bulgarian state in the future, it even claimed that it had actually invested in these areas and millions at that, supporting these arguments with figures. This clearly shows how difficult it was to determine the extent of damage, its cause and the way in which it should be paid.

Ultimately, we must admit that, when estimating the reparations after World War II, the winning countries approached the issue in a more realistic and reasonable manner. They concluded that the failure of World War I reparations should not be repeated, i.e. that estimating huge reparations did not mean that they would be paid and that they would impose tension and create conditions against the economic recovery of Europe.

Tags: HistoryWorld War IIWar reparationsBulgarian-Greek relationsMollov-Kafantaris exchange of populations agreementGermany
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