Germany signs historic accord setting up slave labor fund

BERLIN - Germany signed off Monday on a $5 billion foundation to compensate people forced to work for Hitler's war machine, sealing months of arduous negotiations on one of the last Nazi evils not redressed after World War II.

Representatives of the United States, Russia, Israel, four eastern European states, the Jewish Claims Conference and lawyers for the victims signed documents along with German officials establishing the compensation fund.

''This closes one of the last open chapters of the Nazi past,'' German Chancellor Gerhard Schroeder said. ''We are setting down a durable marker of historic and moral responsibility.''

More than 1 million former laborers are expected to be eligible for payments, mostly central and eastern Europeans. The fund also will compensate people subjected to Nazi medical experiments and some with other Holocaust-related claims.

Officials said they expect the foundation, funded in equal parts by German industry and the government, will start payouts this year.

''It can't undo the suffering that the victims went through, and unfortunately it also comes too late for many,'' Foreign Minister Joschka Fischer said.

Still, he added, the agreement marked a ''historic day'' not only for the survivors, but for Germans because they were forced to confront this aspect of the Nazi past.

President Clinton issued a statement praising the German government and companies.

''This important and generous act will bring comfort and some measure of justice to surviving victims of the Nazi era,'' the president said.

''It is a fitting capstone to the 20th century, and a cornerstone for a 21st century of peace and tolerance.''

Schroeder said foundation trustees would meet to draw up application procedures immediately, and said the government would transfer its entire $2.5 billion contribution to the fund's coffers this year so that payments can begin quickly.

Several former forced and slave laborers attended the signing ceremony at the Foreign Ministry in Berlin - a building that once housed Nazi Germany's central bank.

''Finally we have a victory, not only morally but also in a material sense,'' said Karel Horak, a 79-year-old Czech survivor of a Nazi-era forced labor camp who attended.

Israel Miller, head of the Jewish Claims Conference, praised Germany for launching the fund.

''A great challenge faces us now,'' he added. ''We must reach potential beneficiaries as quickly as possible. Survivors are dying each day.''

Germany has paid some $60 billion in restitution to survivors for suffering at the hands of the Nazis, but slave labor had always fallen between the cracks. German companies long denied responsibility for using slave labor, arguing they had been pressured by the Nazis.

U.S. class-action lawsuits filed by survivors brought German industry and Schroeder to the bargaining table last year. As the theme spilled into the open in Germany, it became clear that the use of Nazi-era labor extended far beyond industry to farms, city administrations, private households and even churches.

Among the documents signed Monday were guarantees from Washington intended to protect German companies from class-action lawsuits in the United States. German industry will only free its share of the fund once the lawsuits are dropped.