Bonn seeks to settle Holocaust claims

Germany will today try to persuade the United States government and Jewish organisations to back a plan to settle all outstanding claims by Holocaust survivors who were forced into slave labour.

Mr Bodo Hombach, a senior aide to Chancellor Gerhard Schroder, arrived in Washington yesterday to meet survivors' groups and the US Under-Secretary of State, Mr Stuart Eizenstat.

Mr Hombach was accompanied by Mr Rolf Breuer, the chairman of Deutsche Bank, one of more than 100 German companies facing class action lawsuits accusing them of profiting from slave labour or from the Nazi appropriation of Jewish assets.

Deutsche Bank admitted last week that it helped to finance the death camp at Auschwitz, where 1.5 million people were murdered during the second World War. Disquiet over the bank's Nazi past could prevent Deutsche Bank's planned $10 billion (€8.85 billion) takeover of the US bank, Bankers Trust.

Bonn hopes to persuade the US government and organisations such as the World Jewish Congress and the Jewish Claims Conference to agree to a one-off settlement from a newly-created compensation fund. The fund would be financed mainly by German companies, including Volkswagen, AEG and Siemens, that employed millions of slave labourers during the Nazi era.

Mr Israel Singer, secretary-general of the World Jewish Congress, told a German newspaper yesterday that he was confident a resolution could be found.

"I have confidence in Chancellor Gerhard Schroder, who told me he would resolve our problems very quickly. That was a very hopeful message for us," he said.

A reparations law passed in 1953 compensated Nazi concentration camp survivors to the tune of five deutschmarks for each day of their imprisonment. But the awards could not be inherited and survivors' pensions were paid only to German victims or those who lived in Germany after the end of the war.

The new fund would mainly benefit victims from central and eastern Europe as well as gypsies who were used as slave labourers by German companies.

The German government hopes that the fund will satisfy survivors and neutralise future claims against German companies. But the firms, many of which depend on exports for survival, are more worried about bad publicity than legal claims.

New York's city comptroller, Mr Alan Hevesi, has asked regulators to block Deutsche Bank's acquisition of Bankers Trust unless the German bank compensates Auschwitz victims. Mr Hevesi was a key figure in the campaign to persuade Swiss banks to make payments to Holocaust victims who were swindled during and after the second World War.

Another German bank, Dresdner Bank, is under investigation by historians following allegations that it benefited from "Aryanisation" deals whereby Jewish assets were acquired by non-Jews at knock-down prices.

German officials are predicting that this week's talks will be delicate and difficult, but Mr Singer is confident that the issue of compensation to Nazi victims will finally be settled before the end of the year.

"I cannot imagine the Germans want to go into the next millennium without having solved this problem. We must make a clean break," he said.