Progress in Jewish-German Talks
Jewish leaders and top German officials said Monday they had made progress toward setting up a fund that would compensate victims of Nazi labor camps and lift the threat of Holocaust-era claims against German firms.
The talks appeared to remove key obstacles to Deutsche Bank's planned $10.1 billion acquisition of Bankers Trust, the eighth biggest U.S. bank.
The takeover had been jeopardized by last week's revelations that Deutsche Bank helped finance construction of the Auschwitz death camp during World War II.
"If things continue the way they are presently going, we hope that we will have found a constructive route... to reach reconciliation,'' said Israel Singer, secretary-general of the World Jewish Congress. His comments came after a meeting with German Chancellery Minister Bodo Hombach and Deutsche Bank Chairman Rolf Breuer.
At the heart of the negotiations is the establishment of a so-called umbrella fund, which would be paid for by German industry and settle any potential liabilities from various Holocaust-related lawsuits pending in the United States.
Both Singer and Hombach declined to comment on the possible size of such a fund. "We really didn't discuss any money today, we discussed the process," Singer told reporters.
Hombach said his government's aim was to seek "material closure" but not "moral closure" to corporate Germany's role in Nazi-era atrocities against Jews and other groups.
The delicate talks aimed at making a clean break with the Nazi past represent a major diplomatic challenge for German Chancellor Gerhard Schroeder, who was expected to discuss the issue with President Clinton in Washington Thursday.
The negotiations appeared to have convinced the World Jewish Congress not to follow through with threats of a boycott against Deutsche Bank and its plans to buy Bankers Trust. The deal would be the biggest-ever foreign takeover of a U.S. bank.
Despite the apparent progress, New York City Comptroller Alan Hevesi reiterated that U.S. regulators should not sign off on the blockbuster merger until Deutsche settles claims that it used slave laborers in the industrial companies it ran and made money by buying and brokering Jewish assets at fire-sale prices.
Hevesi has no power to block or approve the deal, but he leads a network of state and local officials who last year helped persuade Swiss banks to reach a $1.25 billion settlement on outstanding Nazi-era claims by threatening to boycott them.
Along with other German and Austrian banks, Deutsche faces claims for some $18 billion in class-action suits brought by lawyers on behalf of Holocaust victims and their heirs. The banks are accused of profiting from slave labor or the expropriation of Jewish assets.