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Money from German Loan to Fund Arab-israeli Projects

January 23, 1996
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Israel and Germany have decided that a long-term development loan dating back to 1966 will instead be used as aid for Arab-Israeli projects.

The move came when representatives of the two countries met here Monday.

Until the beginning of this year, Israel received money – a total of about $95 million is involved – from Germany as an annual development loan.

The Germans recently said that they could no longer make the loan because Israel no longer is a “developing country.”

The two sides then agreed to use the funds for joint Arab-Israeli projects. Industry parks, an airport between Aqaba and Eilat and a waste water purification plant in Jerusalem were among the projects discussed.

However, if there is not enough time to agree on specific projects for 1996, the rest of the money will go to Israel in the form of a loan.

Also, the question of who will decide how to use the annual aid in the future remains open. The Israelis want to have a say, arguing that the money came from a fund originally set up for political reasons.

That problem was to be resolved Thursday, when Israeli Prime Minister Shimon Peres of Israel meets with German Chancellor Helmut Kohl.

In Munich, Kohl will receive the B’nai B’rith President’s Medal for Humanitarianism.

Peres will also meet with Finance Minister Theodor Waigel and Defense Minister Volker Ruhe.

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