The outcome of last week’s elections in Israel has dramatically improved the chances of the German government giving serious consideration to Israel’s request for German loans and direct financial assistance totaling 10 billion marks, according to officials in Bonn.
But they warned that the process would take at least a few months and would be dependent on a favorable response from the American administration to Israel’s longstanding request for U.S. loan guarantees.
The officials, who spoke on condition of anonymity, confirmed reports that Germany had been approached by Washington on the loan issue.
The reports suggested that the Americans had asked the Germans to refrain from responding to the Israeli request until President Bush makes a decision on the loan guarantees.
The Israeli request for German aid was originally submitted in March 1991 and was partly based on claims against the former East Germany.
Israeli officials have argued that the united Germany has a moral and political obligation to back commitments of the former Communist state. East Germany never compensated the Jewish victims and survivors of the Nazis.
Bonn, in preparing its response to the Israeli request, proposed at one point some financial assistance. But Israeli officials said the sum involved was much too low. The unresolved issue has strained German-Israeli relations and produced recriminations over leaks to the media.
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