(This is the first of a two part article.)
The German reparations agreement signed with the State of
Israel almost fifty years ago in the wake of the Holocaust
was a better deal for the State than for individual Jews. In
retrospect, it seems that even the State could have gotten a
After the terrible destruction in Europe, the State of
Israel assumed the mantle of the heir of the Jewish people,
especially with regard to receiving monetary reparations
payments from Germany. At the time, the matter was extremely
controversial in Israel.
In the agreement eventually reached between Israel and
Germany, in the early 1950s, the Germans undertook to
transfer $833 million over a 12-year period and in the form
of goods only. With the help of this sum, the State of
Israel took huge steps in the development of its
infrastructure -- railway tracks and coaches, a merchant
fleet, equipment for industry and the electricity economy,
Germany, for its part, made significant inroads on its way
to rehabilitation and acceptance as a legitimate nation.
However the individual Jews who suffered were given short
shrift, and even the State got a short-term windfall but
According to Yair Sheleg writing in Ha'aretz, from a
financial point of view the agreement was a complete Israeli
Together with the collective agreement with the state,
Israel signed a personal compensation agreement for
Holocaust survivors around the world at the same time. In
it, the Germans insisted that Israel be responsible for
paying out compensation to Holocaust survivors who came to
the country "up until January 1953."
Raul Teitelbaum, a former journalist and a member of the
umbrella organization of Holocaust survivors in Israel who
is currently writing a book on the reparation affair, notes
that Israel consented to such a condition both because it
feared losing the agreement in its entirety, and due to the
fact that officials at the treasury estimated that it
pertained to only a small group of people, around 3,000 in
In practice, however, just in 2000, the state paid monthly
allowances based on this clause to some 50,000 individuals,
at a total cost of $400 million. In plain terms: Over the
past two years alone, the State of Israel has paid out
compensation to Holocaust survivors in an amount almost
equal to the full sum it received in the reparation
agreement in nominal terms.
In retrospect, Teitelbaum says, "It is still difficult to
understand how the Israeli and Jewish representatives agreed
to some of the things; they can only be explained by a fear
of letting an `opportunity' slip by."
Another way of putting it, is that such behavior is typical
of extreme greed.
The most astounding detail, Teitelbaum notes, is the fact
that German legislation, enacted in the wake of the
agreements, makes no mention at all of the Jews, as a group
which is entitled to such reparation; it only speaks of
individuals "who were persecuted by the Nazi regime on the
grounds of race, religion or political viewpoint," he
"This fits in with the fact that for a long time, there was
no international recognition for the unique Jewish aspect of
"In the Nuremberg trials, the issue of the extermination of
the Jews was sidelined. Even Adenauer himself, in 1949, in
his first speech in which he recognized German
responsibility for the crimes of the Nazis, failed to
mention the extermination of the Jews. What isn't clear is
why did the Jews themselves agree to this?" Teitelbaum
Furthermore, he says, the Germans haggled over every detail,
usually ending in total capitulation on the Israeli side.
For example, Israel initially demanded reparation of $1.5
billion, based on a calculation of 500,000 Holocaust
survivors at a rate of $3,000 per immigrant.
Both estimations fell short; yet the Germans still rejected
them. They immediately cut the numbers by a third, arguing
that that was the responsibility of East Germany, which
constituted one-third of the German people.
Thereafter, they requested more reductions, bringing the
compensation down to its eventual sum of $833 million.
Other details of the agreements are no less problematic, not
merely the fact that Israel took it upon itself to
compensate people who had come to the country prior to
Even more humiliating was the agreement by Israel that the
monthly allowances (as opposed to the lump sum) would be
afforded only to "people of German culture."
Teitelbaum: "This clause distorted the entire significance
of the reparation and gave rise to an absurd situation in
which the ones who had suffered the most received the least.
The dead got nothing; survivors from Eastern Europe, who had
suffered the harshest conditions for the longest period of
time, only received a small one-off payment; while the
German Jews, many of whom had fled Germany before the
Holocaust and were spared the threat of extermination, were
the only ones who were afforded monthly allowances."
The one-off payment given to the remaining survivors was
also determined in humiliating fashion, based on a
"compensation rate" of DM 5 (slightly more than a dollar in
1951 terms) for each day spent in a concentration camp or
Noah Flug, secretary-general of the umbrella organization of
Holocaust survivors in Israel, says he once heard from one
of the Jewish participants in the negotiations how such a
rate was determined.
"He told me that his initial demand was for compensation of
DM 150 a day, equal to the wage of a German laborer at the
time. He says that Adenauer went pale and started to
tremble, explaining that the German economy could not afford
such a sum and that he could only agree to symbolic
compensation. Then he mentioned the amount of DM 5 a day.
Nahum Goldman [then chairman of the Jewish Agency who led
the negotiations on behalf of the Jews - Y.S.] didn't
consult with anyone and hurriedly agreed, and so the sum was
born," Flug relates.
Officially, the grounds for the reparations were given as
"the denying of freedom" to the Jews. The agreements also
explicitly released Germany of any responsibility for
compensating for forced labor during the Holocaust.
This oversight was the result of the determination by the
Allied forces (excluding the former Soviet Union) that
Germany would be exempt from paying such compensation prior
to the signing of permanent peace agreements.
The Western Allies wanted West Germany to join the anti-
Soviet bloc and hence looked to ease the pressure on the
already unstable German economy in the wake of the war.
Permanent peace treaties were never signed, and Germany has
held onto this clause to ward off claims for compensation
for forced labor both in the reparation agreements it has
signed and in its courts of law, which have dealt with
private claims over the years.
Today, Teitelbaum is convinced that the Germans' eagerness
for atonement could have led to far better agreements had
the Israeli and Jewish representatives been less eager to
get their hands on the money.
Historian Dvora Hacohen's book, The One Million Plan,
which deals with the far-reaching plans of former prime
minister David Ben-Gurion to bring one million Jews to
Israel after the war, exposes some of the circumstances
surrounding this eagerness.
Apparently, already in 1944, Ben-Gurion had planned to
finance this grandiose plan with, among other sources, the
reparations that Germany would be forced to pay after the
The opportunity to realize his plan arose when Goldman
informed him of Adenauer's willingness to pay compensation.
Ben-Gurion had no intentions of letting the chance slip
"The Israeli government, which held numerous debates on the
collective reparation agreement that the state should
accept, never once discussed the particulars of the personal
compensation for the survivors. Apparently, the matter was
of so little concern to them that one may suspect that
perhaps they feared that raising claims in this area would
come at the expense of the reparation to the state."
Teitelbaum also points out that the negotiating team did not
include a single Holocaust survivor. The standard excuse for
this was that they were not a formally organized group, with
many even opposing the very idea of reparations.
One can safely assume that had they been included in the
negotiations, they would have been far more insistent in