Publication: Financial Times

Full Citation

  • Title Economics of Potsdam
  • Publication Title Financial Times
  • Collection The Financial Times
  • Date Saturday,  Aug. 4, 1945
  • Issue Number 17,572
  • Page Number 2
  • Place of Publication London, England
  • Language English
  • Document Type Editorial
  • Publication Section Opinion and Editorial
  • Source Library The Financial Times Limited
  • Copyright Statement © The Financial Times Limited. All rights reserved.
ECONOMICS OF POTSDAM The primary aim of the Potsam Conference has been to place Germany in a position which will preclude further outbreaks of aggression. To that end the economic as well as the political sections of the Agreement reached are directed. The reparations clauses are drastic, and deservedly so, since they are part of the penalty to be paid by the German nation. As transfers are to consist of existing industrial equipment or raw materials to a great extent, specifically described as "re- movhls " from the zones. concerned, the industrial. activities of the country, and especially the war- making potential, will be closely circumscribed. The basis of the plan is that German productivity shall be no more than sufficient to meet the peace-time requirements of the country, including occupying forces and displaced persons. For the Germans themselves, needs are to be fixed on no*unduly generous plane. The permitted standard of living is not to exceed that of sur- rounding countries, and execution of the agreement will certainly mean that there will be no oppor- tunity for the aggressor to benefit from his wrong-doing. The plan needs to be considered for both its internal and its ex- vernal consequences. As a punitive measure, it cannot be thought un- necessarily harsh. Germany is rightly called upon to make good some of the destruction caused else- where. To what extent this will be possible has yet to be determined by "the Control Council, whose responsibility it will be to say how much equipment in Germany is un- necessary on the postulated peace- ful basis. This will determine, furthermore, how the population is LO be employed. A lagger propor- tion than for a long t:me past will of necessity be engaged on primary production, and the whole balanice of the country's economic relation- ships will be altered. It is a wise decision to regard the country as a single economic unit, for the separation of industrial from agri- cultural areas which otherwise would result' might introduce intolerable strains. A greater measure of self-sufficiency for Germany will be inevitable, as the plan unfolds, and the subjection of external trade to rigid control, ii woul4seem, must greatly diminish for a long time to come Germai competition in world markets, hitherto fostered by Mhany dubious methods. It is impossible at this stage to evaluate the gains to members of the United Nations which will result from the plan, whether by way of trade or reparations. Germany has suffered Seavily from bombing, and this must affect the amount of equip- ment which can be considered surplus. Claims will be* met primarily from th'e eastern zone of occupation (Russia) and the western (other copntries), but Russia in addition-evidently on account of the damage suffered in the German invasion-will receive 25 per-cent. of the surplus from the western zone, although of this amount 15 per cent. lill be against corresponding supplies of food and raw materials. German external assets also ,will be brought into account, but it is to be noted thdt Russia makes no claim to gold captared in Germany. On the whole, the reparations policy follows a severely practical line. Not the least of its merits is that its operation-thie removals of capital equipment are to be completed in two years from the date of their fixation, which means withfn two and a-half years at most-will be rapid.' The"re is no attempt this time to fix an astronomical sum, justifiable maybe on grounds of equity, but without regard to its economic effects. The reparations section should justify its name, while giving the German nation the task and the opportunity, through hard work and peaceful progreae, of re-establishing itself in the confidence of the world. VAN DEN BERGHS