A supplementary annual agreement for the type and quantities of German goods to be supplied to Israel in the next fiscal year under the terms of the Luxembourg Reparations Treaty was signed here yesterday. That pact provided for the Federal Government to pay Israel the equivalent of $715,000,000 directly as reparations and another $107,000,000 for the account of the Conference on Jewish Material Claims.
As in previous years, the Germans took advantage of an escape clause to pay the minimum annual amount–250,000,000 deutschemarks (approx, $62,500,000). Again as in previous years, the Germans will pay Britain 75,000,000 marks in sterling equivalent for Israeli purchases, chiefly oil, from the British Commonwealth. Capital goods will make up about 55 percent of the products and raw materials and semi-finished items the remainder.
By the end of the current fiscal year, on March 31, Germany will have fulfilled half of its total commitments under the reparations pact. Among the capital projects shipped to Israel was the machinery and equipment needed to put the Timna copper mines–King Solomon’s fabled mines–back into operation. Production will start this year. The first stage of Germany’s shipbuilding program for Israel has already been completed.
Deliveries of German reparations goods last year amounted to 15 percent of Israel’s imports. Goods purchased outside the framework of the pact amounted to another five percent of Israel’s total 1957 imports. In the past two years Israel bought 120,000,000 marks worth of goods in this fashion, paying 75 percent of the purchases in foreign currency and the remainder in citrus products.
The Israel purchasing mission in Cologne sees this development as the gradual establishment of normal commercial relations between the two countries. When the reparations agreement is fulfilled, Israeli officials in Germany feel, Israel will still need to buy German products, especially replacement parts for technical installations being delivered under the reparations agreement.
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