Germany to Lend Israel 140 Million Marks for Projects Agreed on by Both Nations Despite Arab Pressur

The West German government has signed an agreement to lend Israel 140 million Marks in fiscal year 1982-83 for infrastructure projects agreed on by the two governments.

Although the same loan has been granted yearly to Israel since diplomatic relations were established between Bonn and Jerusalem in 1965, the agreement this year was signed without ceremony and without any official announcement, a clear deviation from the practice of the past 15 years.

This reflected intense pressure applied by the pro-Arab lobby in Bonn and by powerful elements within Chancellor Helmut Kohl’s coalition government to deny financial aid to Israel.

Juergen Moellemann, one of the two Deputy Foreign Ministers, only recently urged the government to exert massive pressure on Israel and “the immediate withdrawal by the Western world of all financial and military aid for Israel until Israel becomes more reasonable.” He specifically urged the government to withhold the yearly 140 million Mark loan.

The decision to grant the loan was taken by Kohl personally. Since he took office, Kohl, leader of the Christian Democratic Union, has sought to demonstrate good will toward Israel and improve bilateral relations which had deteriorated during the tenure of Chancellor Helmut Schmidt of the Social Democratic Party. Kohl has announced he will visit Israel next year.

Because of the political pressure, the loan agreement, which normally is signed in October, was delayed until this week. The loan carries a relatively low rate of interest and is repayable in 20 annual installments. It comes from government funds allocated for developing countries.

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