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West Germany and Israel Agree on 'Reparations' Deal, 1952

On This Day in Jewish History: September 8, 1952..

The Reparations Agreement between Israel and the Federal Republic of Germany was to be signed in two days. This was an agreement where West Germany was to pay Israel for the costs of "resettling so great a number of uprooted and destitute Jewish refugees" after the war, and to compensate individual Jews, via the Conference on Jewish Material Claims Against Germany, for losses in Jewish livelihood and property resulting from Nazi persecution

It is a treaty between two states which do not entertain diplomatic relations and do not even intend to establish such relations to carry- ing into effect their mutual contractual undertakings. Furthermore, it is a treaty between states of which one was not in existence as a state and the other was not yet constituted in its present legal form when the events giving rise to the payment of reparations occurred. These are the somewhat unusual circumstances in which the Agreement was concluded.

It is estimated that the total value of plundered Jewish property amounted to about $6,000 million. The Government of Israel, however, when they first put forward their claim for so-called global recompense, did not rely on this figure, nor base their claim on a title which would imply reparation for the total loss suffered. The title on which reliance was placed and the basic figure which was put forward was the estimated cost of resettling in Israel the 500,000 Jewish immigrants who, until the latter part of 1951, had immigrated from countries formerly controlled by the German Reich. The estimated cost of this resettlement was $1,500 million, and this was the figure originally proposed

On this particular day, Israel and West Germany agreed to this deal. Many protests occurred in Israel. Following the Holocaust, Israel's relations with Germany were very tense. Israel was intent on taking in what remained of European Jewry, and partially into the occupied territory of Palestine. Israel was also recovering from the 1948 Arab-Israeli War and was facing a deep economic crisis which led to a policy of austerity. Unemployment was very high (especially in the ma'abarot camps) and foreign currency reserves were scarce.

David Ben-Gurion and his Mapai party took a practical approach and argued that accepting the agreement was the only way to sustain the nation's economy. "There are two approaches", he told the Mapai central committee. "One is the ghetto Jew's approach and the other is of an independent people. I don't want to run after a German and spit in his face. I don't want to run after anybody. I want to sit here and build here. I'm not going to go to America to take part in a vigil against Adenauer." At this time, Menachem Begin ordered the assassination of Adenauer, which was carried out by Jewish terrorists utilizing a bomb plot killing one person but leaving Adenauer unscathed. Though Adenauer learned that it was a Jewish attempt on his life, he ordered investigations to be put on the back burner.

Despite the protests, the agreement was signed in September 1952, and West Germany paid Israel a sum of 3 billion marks over the next fourteen years; 450 million marks were paid to the World Jewish Congress. The payments were made to the State of Israel as the heir to those victims who had no surviving family.

The money was invested in the country's infrastructure and played an important role in establishing the economy of the new state. Israel at the time faced a deep economic crisis and was heavily dependent on donations by foreign Jews, and the reparations, along with these donations, would help turn Israel into an economically viable country.

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