Germany Denies It’s Under Pressure from U.S. to Delay Loans to Israel

Echoes of Israel’s angry dispute with the Bush administration over loan guarantees for immigrant resettlement are now resounding in Germany.

German government spokesman Dieter Vogel flatly rejected an Israeli media report Friday that President Bush had persuaded Chancellor Helmut Kohl to delay action on an Israeli request for $5 billion from Germany.

“Stupid, foolish,” was Vogel’s response to the report in the Israeli newspaper Ma’ariv. He confirmed that Israel had applied for credits to build apartments for arriving Soviet Jews but said no sum was mentioned and no decision made.

Germany will decide for itself and there is no need or room for pressure from any source, Vogel added in a statement released here Friday.

The story in Ma’ariv might have gotten little reaction here but for the corroboration it seemed to get from Yossi Ben-Aharon, Prime Minister Yitzhak Shamir’s chief aide.

Ben-Aharon, who is director general of the Prime Minister’s Office, on Friday told an army radio interviewer in Jerusalem that he didn’t “rule out that the United States has requested states to deny us aid at this stage in order to bring pressure. I hope it’s not true.”

Israeli officials have accused the United States, and now Germany, of holding humanitarian requests for immigrant resettlement aid hostage to the political issue of Israel’s settlement-building drive in the West Bank and Gaza Strip.

The Bush administration and all of its predecessors have made clear they consider the settlements an obstacle to peace.

A key member of the Bonn government, Minister for Economic Cooperation Carl-Dieter Spranger, took the same position during a visit to Cairo last week. He said no further aid to Israel should be forthcoming before the peace process gets under way.

Spranger, who said he was expressing his “personal opinion,” called Israel’s settlements policy “illegal” and “the major obstacle to peace in the Middle East.”

LEVY PROMISED FAVORABLE CONSIDERATION

That is the argument of the Bush administration, which urged Congress to postpone discussion of Israel’s loan guarantee request until after a Middle East peace conference convenes under U.S.-Soviet auspices.

Israel’s requests for German credits or loan guarantees for its immigrant absorption program dates back to Israeli Foreign Minister David Levy’s visit to Bonn on March 17.

He was warmly received on that occasion, shortly after the end of the Persian Gulf War, when Israel enjoyed wide support in Europe for its restraint while under missile attacks from Iraq.

Levy reportedly was promised favorable consideration of the request.

Earlier this month, the director general of Israel’s Finance Ministry, Shalom Singer, visited Bonn to discuss the matter further with German officials. An Israeli spokesman said later that negotiations were under way but no conclusions had been reached.

But until two weeks ago, Germany refused to confirm it was even considering such a request.

Officials here pointed out that Germany was extremely generous to Israel during the Gulf war, supplying it with $590 million worth of humanitarian and military aid.

In addition, Bonn had agreed to finance two submarines for the Israeli navy, to be built by a shipyard in the German port of Kiel. Israel ordered the undersea craft several years ago but was forced to cancel the order last year because of budgetary constraints.

NEXT STORY