Germany Agrees to Give Israel Flexibility on Reparations Orders

Israel and West Germany have concluded a new agreement which provides for greater flexibility in the types of goods Israel may order from Germany as reparations payments under the terms of the Luxembourg Agreement and which will permit Israel to obtain a greater quantity of basic machinery and equipment needed for the long range development of the Jewish State.

Announcement of the signing of the agreement was made here today by the Israel Purchasing Mission. It was signed in the new Mission headquarters in this city, becoming the first such agreement ever signed on Israel extra-territorial soil.

The pact provides that orders for goods in “category one”–heavy machinery and equipment–may exceed the total assigned to this category in any year and the difference between the prescribed maximum and the amount ordered may be deducted from “category two”–ferrous and nonferrous metals. Israel would also be allowed to order such goods instead of the foreign currency which Germany sets aside for the payment of Israel purchases of British petroleum. This provision, however, is not likely to be used by Israel.

The significance of the pact was underlined by a spokesman for the Mission who pointed out that during the next four to six years Israel’s development plans call for German reparations to provide goods worth $67,000,000 or 40 percent of all such development machinery and equipment. Included in such orders would be ocean freighters, mining machinery, equipment to set up a factory to produce electric light bulbs, equipment to set up a sugar refinery, machinery for textile mills, railroad signal equipment and parts for the massive pumps which operate the country’s wide spread irrigation system.