On Sept. 20, 1945, three months after the end of World War ii, Chaim *Weizmann, on behalf of the *Jewish Agency, submitted to the governments of the U.S., the U.S.S.R., Britain, and France, a memorandum demanding reparations, restitution, and indemnification due to the Jewish people from Germany. He appealed to the Allied Powers to include this claim in their negotiations for reparations with Germany, in view of the "mass murder, the human suffering, the annihilation of spiritual, intellectual, and creative forces, which are without parallel in the history of mankind." Due to the deadlock and later interruption of the Allies' negotiations for reparations, no further development took place until March 12, 1951, when the Israel foreign minister, Moshe *Sharett, submitted a note to the four Allied governments which claimed global recompense to the State of Israel of $1,500,000,000 from the German Federal Republic (frg, i.e., West Germany). This claim was based on the financial cost involved in the rehabilitation in Israel of those who escaped or survived the Nazi regime. The financial expense incurred by Israel in the absorption of 500,000 Nazi victims could be covered at $3,000 per capita. As a result of unofficial preliminary contacts, Chancellor Konrad *Adenauer declared on Sept. 27, 1951, the frg's readiness to compensate Israel for material damage and losses and to negotiate with her and with representatives of Diaspora Jewry. The latter established a *Conference on Jewish Material Claims against Germany (Claims Conference) in New York (October 1951) presided over by Nahum *Goldmann.
After a resolution to enter into direct negotiations with the frg was passed in the Knesset by a small majority after stormy street demonstrations staged by the *Ḥerut opposition and a heated three-day debate (Jan. 7–9, 1952), the frg delegation, headed by Prof. Franz Boehm (d. 1977), first met with the Israel delegation, headed jointly by Giora *Josephthal and Felix Eliezer Shinnar (d. 1985), at The Hague on March 21, 1952. The delegation of the Claims Conference, headed by Moses *Leavitt, was in charge of the negotiations on individual claims for indemnification. Israel reduced her claim of $1,500,000,000 against the whole of Germany to $1,000,000,000 against the frg alone. She reserved her right to claim the balance from East Germany (German Democratic Republic), which did not respond. On Sept. 10, 1952, after six months of negotiations, an agreement between Israel and the frg was signed at Luxembourg by Moshe Sharett and Konrad Adenauer. The agreement was ratified and came into effect on March 21, 1953, after a delay caused by the Arab states' efforts to prevent ratification.
The frg undertook to pay an amount of dm3,450,000,000 ($845,000,000) in goods, of which dm450,000,000 ($110,000,000) was earmarked for allocation by the Claims Conference. This $845,000,000 was to be paid in annual installments over a period of 14 years (between April 1, 1953, and March 31, 1966). Thirty percent was to pay for Israel's crude oil purchases in the United Kingdom. With the balance of 70%, Israel was to buy ferrous and nonferrous metals, steel, chemical, industrial, and agricultural products. The agreement was carried out by the frg both in letter and in spirit. The reparations agreement was implemented by the government-owned Shilumim Corporation in Tel Aviv – Shilumim refers to recompense for material damage ("For the Lord hath a day of vengeance, a year of recompense for the controversy of Zion" (Isa. 34:8)) – which accepted orders from prospective buyers under the agreement, and by the Israel Purchasing Mission in Cologne, to place these orders with the German suppliers. Goods bought and imported under the agreement represented 12–14% of Israel's annual imports and thus made an important contribution to Israel's economy.
In 1988, the German government allocated another $125 million, enabling remaining Holocaust survivors to receive monthly payments of $290 for the rest of their lives. In February 1990, before its unification with West Germany, East Germany admitted for the first time that it was also responsible for war crimes committed by the German people during World War ii and agreed to pay reparations.
In 1999, German government and German industry agreed, in response to the filing of numerous class action lawsuits in American courts, to compensate Jews and non-Jews specifically for slave and forced labor they performed for German industry during the war. In return for the dismissal of all such lawsuits and guaranteeing Germany and its industry "legal peace" from any such further litigation, the German government and German industry created a foundation, "Remembrance, Responsibility and the Future," with assets of 10 billion German marks (approximately us $5 billion). Slave and forced laborers still alive at the time of the settlement could apply to receive a lump sum payment of between $2,500–$7,500 from the German foundation. Over 140,000 Jewish survivors in over 25 countries received such payments, and the compensation program to the Jewish survivors was administered by the Claims Conference. Final payments from the Foundation were to be made by September 2006.
Israel Ministry of Foreign Affairs, Documents Relating to the Agreement between the Government of Israel and the Federal Republic of Germany, Signed on 10 September 1952 at Luxembourg (1953); N. Robinson, Ten Years Indemnification (1964); F.E. Shinnar, Be-Ol Koraḥu-Regashot bi-Sheliḥut ha-Medinah: Yaḥasei Yisrael-Germanyah 1951 – 1966 (1967); Bank of Israel, Ha-Shillumim ve-Hashpa'atam al ha-Meshek ha-Yisre'eli (1965); The Autobiography of Nahum Goldmann (1969), 249–82; I. Deutschkron, Bonn and Jerusalem (1970).
[Felix Eliezer Shinnar /
Michael Bazyler (2nd ed.)]