A dispute between Germany and Greece over World War Two reparation claims has added to tensions between the two countries over Athens’ bailout repayments and the pace of its economic reforms.

Greece’s deputy finance minister claimed that Germany owed Greece nearly 279 billion euros (400 billion Australian dollars) in reparations for the Nazi occupation of the country in the 1940s.

Germany was quick to dismiss the claims – its economy minister called them “stupid” – and stressed it had already settled its reparations to Greece in a post-war agreement.

Bavaria’s Conservative state finance minister chimed in, calling Greece’s demands “inappropriate” and “not very clever”.

“This issue should not be exploited to explain possible budget deficits in Greece. Also, it comes across as inappropriate and is in my view entirely wrong as a strategy. The German government has said that it views the issue as closed,” said Markus Soeder, a member of the Christian Social Union (CSU), the sister party of Chancellor Angela Merkel’s Christian Democrats Union (CDU).

Tens of thousands of civilians were killed by German troops when they conquered Greece during World War Two.

The massacre of Distomo, a central Greek village where more than 200 civilians were killed in 1944, is a particularly painful memory. Greece’s justice minister has threatened to seize German state-owned property in compensation for the war crimes.