The Bonn government has signed an agreement to provide Israel with a 140 million Mark development loan which the Israelis are to use for special projects such as road construction, construction of electric power stations and investment in high-tech industry.
The loan, for fiscal 1984, was approved over the strong objections of Deputy Foreign Minister Juergen Moellemann of the Free Democratic Party (FDP), coalition partner of the ruling Christian Democratic Union (CDU). Moellemann has been one of the leading opponents of continuing West German economic aid to Israel for long-range development projects. The loans began in 1965 when Bonn and Israel established formal diplomatic relations.
The opposition Green Party also opposes economic aid to Israel and only a few weeks ago urged the government to make the money available instead for the Palestinians who suffer under “Israeli aggression.”
The Federal Republic is the only country, apart from the United States which regularly grants development aid loans to Israel. But the practice has had a troubled history.
In 1976, the then Israeli Foreign Minister, Yigal Allon, sought to have repayment on the loans extended beyond the annual terms because of the burden on Israel’s economy. His confidential written request to Foreign Minister Hans-Dietrich Genscher was leaked to the press and the extension was denied.
In 1979, then Chancellor Helmut Schmidt agreed to extend the repayment terms despite protests from his finance minister that to do so would establish a precedent for Bonn’s development aid to other countries. Schmidt was not moved but ordered his ministers to keep the matter discreet to avoid pressure from Arab governments.
Last year, in the aftermath of Israel’s invasion of Lebanon, Moellemann urged Chancellor Helmut Kohl publicly to “punish” Jerusalem on grounds that the Arab countries would reward Bonn financially and politically. Kohl rejected these arguments as one-sided and ordered the Foreign Ministry to sign that year’s loan agreement with Israel. Moelleman repeated his demands when the 1984 loan came up, but not publicly.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
