The Bonn government has confirmed that it is considering Israel’s request for billions of dollars in financial assistance to aid in the absorption of new immigrants.
The announcement said that talks between the two countries are continuing but did not disclose what amounts were being discussed.
A government spokesman refused to comment on reports that Washington has asked Bonn not to grant Israel credits as long as the issue of U.S. loan guarantees for Israel remains unresolved. The U.S. State Department has denied making such a request.
Israel has asked the United States to underwrite $10 billion in private loans to help it absorb 1 million immigrants expected in the next five years.
The Bush administration has refused the guarantees unless Israel freezes settlement activity in the administered territories, a condition the Israeli government rejects.
Israel reportedly has asked the Germans for about $6.2 billion in aid. Bonn has offered $1.2 billion in long-term loans, an amount Israel rejected as insufficient, diplomats here said.
Israel also rejected an offer of $2 billion in credit guarantees, German television said Sunday. But negotiations with the Finance Ministry continue.
Israel’s request for German financial assistance dates from Foreign Minister David Levy’s visit to Bonn in March 1991, shortly after the Persian Gulf War ended.
Levy argued that former East Germany, unlike West Germany, never paid reparations to Nazi persecutees or to Israel.
When the two Germanys were united in 1990, the Bonn government was supposed to assume that obligation.
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