In Out of Hitler’s Shadow, Tobias Strautmann, professor of economic history at the University of Zürich, tackles two important but too often overlooked aspects of post-war (West) German history, the Compensation Agreement with Israel and the settlement of German pre- and post-war debts to the Allies. In twelve concise chapters. he explains events which led to the two treaties in Luxembourg (Compensation Agreement) and London (debt settlement) as part of which the Federal republic paid DM 3.4 billion to Israel and the Jewish Claims Conference and DM 14.45 billion to its pre- and post-war creditors. Strautmann begins his analysis against the backdrop of the Marshall Plan and the significance of the Schuman Plan and West Germany’s near bankruptcy in early 1951 and then tackles the various stages of the two negotiations, which at times came close to collapse before they reached their eventual conclusions. The book is written for a nonspecialized readership; numerous anecdotes and concise short biographies of the main protagonists break up the more complex aspects of the book and make it an interesting and easy read for the uninitiated. Strautmann's inclusion of contemporary public opinion polls from both Israel and West Germany help to highlight, respectively, the scale of public opposition to the Compensation Agreement in Israel and in Germany the inability or unwillingness to face up to and respond to the crimes the Nazis had committed. He argues convincingly that it had been the leading men who deserve credit for their determination to get the Compensation Agreement passed, David Ben Gurion for Israeli and Nahum Goldmann for the Jewish Claims Conference and Chancellor Konrad Adenauer and Franz Böhm, his chief negotiator, in Germany. Aware of the hostile public opinion, the leaders of both countries did not even inform their respective cabinets about the early stages of the negotiations.

The strength of the book, which will make it a very good starting point for history or political science undergraduate students who are interested in debt negotiations and compensation agreements is threefold: First, Strautmann is very good in explaining how the Luxembourg and London negotiations were intertwined with the negotiations over the Schuman Plan and the subsequent 1952 General Treaty and the question of a German military contribution to the “defense of the West” after the outbreak of the Korean War. Second, he does an outstanding job in summarizing complex economic matters and making them comprehensible to someone without expert knowledge, for example the gold clause in the London negotiations, and the scale of German payments and their potential impact on the country’s reconstruction. Third, he explains the motives of the opposition to the settlements quite well. In Israel, these reached their climax in an incendiary statement by the leader of the Israeli opposition, Menachim Begin, when the Compensation Agreement was discussed in the Knesset (128–130) and two parcel bombs sent to Germany by an extremist group (140). In Germany, the Agreement was opposed for fiscal reasons by Finance Minister Fritz Schäffer. Only 11 percent of the German population backed it without qualification, 24 percent of people polled at the time regarding it as too high, but 44 percent rejected the compensation altogether as “not necessary” (177).

While the stages of the negotiations and the economic factors of the two treaties are well explained, the book unfortunately has some weaknesses as well. These range from minor factual issues (e.g., Adenauer was reinstalled as mayor of Cologne in 1945 by the Americans, not the British (47) or seeing the 1950s as the decade when the British economy began to go wrong (207)), to an overly positive depiction of Ludwig Erhard, the German Economics Minister. Strautmann fails to mention Erhard's role in and responsibility for the 1950/51 balance of payments crisis, something that had been highlighted by Werner Bührer (Westdeutschland in der OEEC, 1997). In sharp contrast to the existing literature (Christoph Buchheim [“Das Londoner Schuldenabkommen”, in: Ludolf Herbst (Hrsg.), Westdeutschland 1945–1955: Unterwerfung, Kontrolle, Integration, 1986, 229–239]; Lothar Gall [Der Bankier Hermann Josef Abs, 2004]), Strautmann sees Hermann Josef Abs rather as a handicap to the German London Debt negotiations than as its shaper. Similarly, too little is said about the immediate impact of the London settlement which restored Germany’s credit worthiness on the international markets and allowed the inflow of foreign investments on a large scale, financing the economic recovery. Most importantly, however, Strautmann fails to answer the question he has asked in the book's blurb, “Why were the United States and its western Allies so lenient …” to the Germans. Although he provides very good comparative figures from previous reparation settlements and puts Germany’s transfers in perspective to its GDP at the time, which do indeed show significant leniency, the question is not really answered. Strautmann fails to take full account of the Cold War, which is treated as less than a sideshow. This omission is a major handicap for readers unfamiliar with the political details of the time. Only the Cold War and the resulting American concerns about Soviet intention can explain the American shift in their policy on Germany. The country was to be rebuilt as soon as possible both economically and militarily to become an anti-communist bulwark. Both aims would have been much more difficult to achieve had the Federal Republic of Germany been saddled with higher compensation payments or recompenses for the debts. The Cold War situation opened up opportunities for Adenauer, too: he could demonstrate his loyalty to his western overlords by showing his willingness to settle the debt question, and he could show to the world that—regardless of the domestic opposition—it was the Federal Republic and not communist East Germany which was willing to acknowledge responsibility for the Nazi atrocities, thus supporting his claim for the sole representation of Germany. The Cold War context also has to be seen as the reason why no German compensation has been provided at the time to countries such as Poland, which was on the wrong side of the Iron Curtain, an aspect barely touched upon in the book.

Despite this criticism, the book will be a welcomed reading for undergraduate students and interested nonspecialists. Strautmann’s ability to explain complex economic issues such as the gold clause in the London settlement and, perhaps more importantly, his ability to weave together the different political and economic negotiations at the time and show how they were interconnected makes the book a good starting point for anyone who wants to learn more about the complexities of the settlement of debt, be it financial or moral.