Hitler's Beneficiaries: Plunder, Racial War, and the Nazi Welfare State (38 page)

The main importance of Greece was strategic, since it could be used as a base for launching attacks on the Royal Navy. German paratroopers had taken Crete in the final days of May 1941, and they had designs on Malta and Cyprus, whose capture would have spelled the end of Britain’s naval and air presence in the eastern Mediterranean. The Germans failed in their attempts to gain those two strongholds, but they were able to retain possession of Crete. As the tide of war began to turn against Germany in 1942, enormous sums of Greek drachmas were spent on fortifying the island.

Greek tobacco became more and more important economically and as a means of boosting morale on the home front. By the spring of 1942, 270,000 tons of Greek tobacco had been sent to Germany, and administrators in the Foreign Office announced that they had acquired an additional 600,000 tons. The total amount dramatically exceeded the annual demands of German smokers and promised to yield almost 2.5 billion reichsmarks in tobacco taxes for the Reich treasury.
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Other major import products included chromium and other metallic ores, olive oil, currants, and silk for the production of parachutes. Transport was organized by the Schenker company, which enjoyed a monopoly in Greece. Schenker’s representative in Salonika also served as a spy for the Security Service.
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Even during peacetime, Greece had been required to import food, but the war cut off all the country’s trade routes. The domestic market was immediately shaken when Bulgaria was given control over fertile regions in the north, while German troops also took whatever they could from the land.
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In the first few months of the occupation, the Greek currency began to lose its value—a fact that the Reich Finance Ministry registered with alarm in 1942.

In a ten-page letter to his ministerial colleagues responsible for matters of war, von Krosigk cited Greece as an example of the potential economic perils of military occupation. Von Krosigk entitled his missive “More Efficient Organization of Financial Relations with Non-German Territories in the Interest of Securing an Optimal Wartime Economy.” In it, he described the dangerous consequences of rejoicing too long in the success of the blitzkrieg and failing to develop sensible financial and occupation policies. “Inflation,” he argued, “means the total disintegration of the economic system. On the one hand, it leads to drastic reductions in productivity. It also leads the populace to hold goods and merchandise off the market, as the Romanian peasants did their grain. It completely undermines any sort of economic planning for the country in question.”
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In July 1942, Hitler expressed his concern to Mussolini that Greece was “on the verge of a financial—and with it an economic and political—catastrophe.”
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In September, the Finance Ministry repeatedly drew attention to the imminent collapse of the Greek currency. If the situation was allowed to continue, a ministry official warned, “it would not only cause the ruin of the Greek economy” but also deny the occupying powers any “normal opportunity for purchasing goods or utilizing services” in Greece. It had already become “significantly more difficult to carry out tasks essential to the war effort there.”
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A series of strikes by blue-collar workers and white-collar civil servants in Greece led government officials in both Rome and Berlin to conclude that drastic action had to be taken. In light of the “intolerable consequences of the decline in purchasing power” in Greece, Hitler ordered in the first half of September that “efforts be made to combat all mjor causes of the problem.”
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Hitler’s decree left the concrete measures up to the discretion of his economists.

The causes of inflation in Greece included the country’s general economic weakness, the lack of a professional financial administration, and the wartime disruption of the country’s key source of income, commercial seafaring. But the most important cause by far was the unrestrained plundering of Greece by both German and Italian troops. According to estimates from the Wehrmacht’s economics staff in Greece, plundering wiped out “some 40 percent of real Greek income” in 1941. A year later, “occupation costs and state expenditures accounted for around 90 percent of real gross domestic income.”
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With the continuing devaluation of the drachma, agricultural products began to disappear from shops and farmers’ markets, which were subject to price controls, and increasingly popped up on the black market. As a result, agricultural production declined. In the winter of 1941-42, the poorer segments of the Greek population were already suffering from food shortages. Göring commented: “We can’t be overly concerned with starving Greeks. That’s a misfortune that will befall many other peoples.”
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Göring’s flagrant indifference came in the wake of horrific newspaper reports. “Children are dying by the thousands,” wrote one witness. “Roadside ditches are becoming their graves, children search through piles of refuse in the street for scraps to eat, and parents keep the deaths of their children secret from the authorities. Mothers toss the bodies of their dead babies over the walls of cemeteries in order to keep the infants’ food ration cards.”
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German politicians could afford to ignore this side of war. But they couldn’t ignore the “plight” of their own troops. Wages paid in drachmas soon had hardly any purchasing power at all. Soldiers complained, and many began to exchange military supplies on the black market for daily necessities.
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In January 1942, a survey of soldiers’ correspondence revealed that the authors of “60 percent of all letters” were concerned with getting goods and money “in order to achieve profits from the exchange or sale of merchandise at several times the original purchase price.”
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It was to combat such an economic collapse that Hitler appointed Neubacher his special emissary in Greece at the beginning of October 1942. Ever optimistic, the German leadership saw the appointment as a short-term expedient “since in 1943 it is assumed there will be a new [i.e., more advantageous] military and political situation in the Mediterranean sphere.”
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Mussolini, for his part, appointed a special emissary for Italy’s occupation zone: a man named D’Agostino, who was a diplomatic envoy and a bank director with experience in economic restructuring. After a preliminary conference in Rome, D’Agostino met with Neubacher on October 24, 1942, in Athens. They agreed “to curtail purchases made by Axis troops on the Greek market, to temporarily suspend all food exports, and to activate transports of food to the country.” In addition, they promised “to improve supplies of cooking oil for the population as quickly as possible” and—significantly—to institute a temporary hiatus on payments to occupation troops.
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Neubacher pledged to provide the Greek populace “with the basic necessities of life at prices affordable to people of all social classes.”
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To combat inflation, credit was to be restricted, and price controls, which had proved ineffective anyway, were to be lifted in order to bring prices on the free market back to at least a semblance of normality. A Greek law also required joint-stock companies to increase their capitalization by 20 percent (the money that was collected from investors went directly into the state treasury). To stimulate production, a law was also passed requiring all able-bodied Greeks to work.
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Neubacher used a variety of sometimes unconventional methods to fulfill his promises. He had food imported from occupied Serbia, as well as from Bulgaria and Romania. He also enlisted the International Red Cross to deliver aid to Greece. This initiative, which was tolerated by Britain and actively supported by Sweden and Switzerland, was a major coup that stabilized the Axis occupation. Soon Swedish ships full of Canadian wheat were regularly calling at Greek ports.
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Neubacher even arranged for 8 million reichsmarks’ worth of sugar and potatoes to be purchased in Germany for Greece, turning over the proceeds in drachmas from this transaction to the Wehrmacht. A short time later, the Finance Ministry raised the sum of money allotted for such purchases by 3.2 million reichsmarks.
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Schwerin von Krosigk added a further 4.3 million marks for the expansion of economically important roads, breaking with the policy that such construction was to be paid for by the occupied country itself.
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Neubacher did not cut soldiers’ pay, but he forbade them from receiving money from home. Eventually, soldiers were paid half in drachmas and half in so-called canteen money, vouchers that were valid only in German military commissaries.
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Neubacher’s resolution to supply German troops in Greece “wherever possible from Germany, Italy, or third-party countries” would ultimately become linked to the deportation of Jews from Salonika. In the early phase of the occupation, packed freight trains traveled to Greece and returned empty, except for occasional loads of ore and tobacco. It was these empty freight cars that would transport Greek Jews to death camps in Central Europe.
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Neubacher’s interventions helped bring relative stability to the drachma, but his package of measures accelerated the ghettoization, dispossession, and deportation of Jews. Discriminatory policies began immediately after the special emissary’s arrival in Greece. Few administrative documents from the German occupation of Greece have been preserved, but the connection between the deportation of Jews and the fight against inflation can be persuasively demonstrated.
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The travel expenses submitted by legation counselor Eberhard von Thadden, the Foreign Office official responsible for “Jewish questions,” provide one piece of corroborating evidence. Immediately after Hitler charged Neubacher with the “special mission of stabilizing economic conditions in Greece,” von Thadden visited Athens for “several weeks.” The Reichsbank also made it known that a “legation counselor” would be “accompanying emissary Neubacher.”
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In the following months, von Thadden made frequent flights from Berlin to Athens, Bucharest, Rome, and Vienna. “In the places named,” he wrote in claiming his travel expenses, “negotiations were held in conjunction with the operation of the Reich special emissary for Greece, to whom I was assigned.”
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From the start, then, the activities of the special emissary and the officials responsible for policy toward Greek Jews were conceptually linked.

Even more significant were the dates of von Thadden’s trips. He left Berlin for Rome on October 18, 1942, and stayed in the city for talks with the Italian foreign minister until October 21. On October 23, he arrived in Athens, where he made his first public announcement the following day. With the exception of a short visit to Rome, he remained in Greece until November 30. On December 11, von Thadden flew from Berlin to Bucharest, where Neubacher was normally located, traveling on to Athens before returning to Berlin on December 22. On February 4, 1943, he made a train trip to “headquarters,” Hitler’s Wolfsschanze command center, staying until February 8.

The writer Felix Hartlaub was present and made a transcript of the conversations in the daily war registry of the Wehrmacht High Command. The topic of the meeting was the Wehrmacht’s need for funds in Greece and the resulting friction between military leaders, on the one hand, and Neubacher and Altenburg, on the other. “To clear up these issues,” Hartlaub wrote, “a conference was held on February 5 in restricted zone 1 [where Hitler resided] between representatives of the Foreign Office and the Wehrmacht. It was determined that 20.3 billion drachmas could be secured monthly and that Wehrmacht debts of 18 billion could be covered. Additionally, it was determined that construction projects could also be carried out with these sums.”
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Neubacher, who also took part in the conference, agreed to pay Wehrmacht expenditures, which he had pressed to be kept at a minimum, in drachmas.
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A few weeks previously, he had assured the government in occupied Greece that occupation costs would be “suspended.” The contradiction between these two positions can be resolved by considering why the Foreign Ministry’s point man for Jewish questions would have taken part in such high-level discussions.

The 20 billion drachmas a month that Neubacher had promised the Wehrmacht were equivalent to approximately 140,000 British gold pounds, or sovereigns. All in all, the twelve tons of gold plundered from the Jews of Salonika had a value of some 1.7 million sovereigns. Immediately after Neubacher’s arrival in Greece in October 1942, the German occupiers began pressing for Salonika’s Jews to be dispossessed. On January 3, 1943, Eichmann’s deputy Rolf Günther flew to Salonika, presumably to help set policy toward Jews there. Meanwhile, Foreign Office undersecretary Martin Luther wrote to Altenburg in Athens that “Günther of course would be available to work with him.” On January 26, Altenburg officially informed Greek prime minister Konstantinos Logothetopoulos about the deportation plans. From Logothetopoulos’s reaction, the veteran diplomat Altenburg judged that “difficulties” were “not to be expected.”
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In early January 1943, Eichmann informed his assistant Dieter Wisliceny about an imminent initiative “to solve the Jewish question inSalonika in cooperation with the German military administration in Macedonia.” One month later, Wisliceny and Alois Brunner arrived in Salonika as Eichmann’s envoys. On February 6, 1943, Wehrmacht officer Max Merten, who was responsible for the local military administration, issued an order requiring all Jews to wear the Star of David and relocate to the city’s ghetto. He also issued curfews and restrictions on communication.
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