TEHRAN - Israel's relationship with Germany is arguably one of the most complex and most historical diplomatic relations of the 20th century. Rising from the ashes of the Holocaust, this relationship evolved from profound enmity and trauma to a cautious, pragmatic engagement, culminating in the landmark Luxembourg Agreement of 1952.

It referred to reparations to survivors of the Holocaust and was one among many historical events that would turn around bilateral ties between Israel as a newly established regime and the Federal Republic of Germany (West Germany).

The establishment of Israel in 1948 on the Palestinian lands, just three years after the end of World War II, was partly influenced by the Holocaust. Israel was designed to be a vault for Jews, a response to centuries-old persecutions that found their peak and most horrendous manifestation at the hands of their Nazi executioners.

By the immediate post-war period, it was most unimaginable for any Jew, including the otherwise young preliminary leadership of the Israeli regime, to be reconciled with or have any form of engagement with Germany. The wounds were too fresh, the pain too raw.

But the high demands of the young regime and the harsh realities of geopolitical conditions soon compelled Israeli leaders to close the gap and consider the unthinkable relationship with West Germany.

The early years: Reluctance and pragmatism

During the late 1940s and early 1950s, the global landscape was characterized by the Cold War. The chancellor of West Germany, Konrad Adenauer, sought to rehabilitate the German image and reintegrate the country into the Western bloc. Adenauer recognized that addressing the crimes of the Nazi regime were unavoidable for Germany's moral and political rehabilitation.

On the other hand, Israel was struggling to absorb millions of Jews from Europe and West Asia, while its economy faced numerous challenges. Being under heavy financial strain, the regime spent almost all of its budget on building infrastructure and providing housing for its citizens. 

In spite of urgent needs, accepting reparations from Germany was deeply controversial within many circles in Israel. Most Holocaust survivors and citizens did feel that any engagement with Germany was to betray the victims. The Israeli public was divided, with fierce debates erupting over the moral implications of accepting "blood money." Menachem Begin, head of the Herut party, was one opponent of the idea, arguing passionately that it would absolve Germans of their moral responsibility. 

However, Israeli Prime Minister David Ben-Gurion and his government took a pragmatic approach. Ben-Gurion did not see reparations as forgiveness, but as justice and restitution. He argued that Germany had a moral obligation to compensate the Jewish people for the immense suffering and loss inflicted upon them. Furthermore, the financial support from Germany could play a crucial role in Israel's development and survival.

The path to the Luxembourg Agreement 

The relations between Israel and West Germany during the negotiations were tense and complex. They were indirect negotiations mediated principally by the Claims Conference, an organization that represented Jewish Holocaust survivors.

The geopolitical context, especially the Cold War, also influenced the negotiations. The United States was aiding the reparations process so as to further consolidate West Germany as a bulwark against any Soviet expansion. 

In 1951, Israeli Foreign Minister Moshe Sharett presented to the four Allied powers in Germany, formally, the claim of reparations. The claim demanded compensation for the material losses suffered by the Jews during the Holocaust, as well as the expenses incurred in resettling the Holocaust survivors in occupied Palestine.

The government of West Germany, under the leadership of Adenauer, subsequently acknowledged its responsibility and was willing to negotiate. 

The culmination of the negotiations was the signing of the Luxembourg Agreement on September 10, 1952. By the agreement, West Germany agreed to pay Israel 3 billion Deutsche Marks in goods or services over the next 12 years. In addition, 450 million Deutsche Marks were disbursed to the Claims Conference for the benefit of Holocaust survivors outside Israel. 

The significance of the Luxembourg Agreement

The Luxembourg Agreement marked a very important historical milestone in the relationship between Israel and Germany. It was the first formal acknowledgment of Germany's accountability for the Holocaust and its undertaking to make restitution.

For Israel, the very existence of this agreement was the lifeline that provided the regime with financial resources to build the economy and infrastructure. The money paid was instrumental in developing the basic areas of housing, transport, and industry, which were called upon to absorb the influx of immigrants and form Israel's foundation for future development. 

The agreement turned out to be very controversial. It did create widespread vigorous public debate and even violent protests in Israel over the acceptance of reparations.

The matter was severe for many Holocaust survivors and their descendants, who felt that no amount would be adequate to compensate for the loss of life or the trauma suffered. It posed hard questions about what precisely justice means and how far material restitution can go in the face of suffering beyond imagination. 

For Germany, the Luxembourg Agreement was a pivotal step in its post-war rehabilitation. With a sense of responsibility and through payments of reparations, West Germany was attempting to convey this impression to the world community that it was determined to atone for the sins committed against the victims of the Nazi regime.

The agreement assisted in bringing Germany back to acceptable ranks in the world community, which ultimately led to its entry into NATO and the European Economic Community.

Indeed, this legacy marked the beginning of a gradual normalization of relations between Israel and West Germany. It carried the two countries through a very complex and rich network of relationships on cooperation concerning trade, technology, and security over the following decades. However, the shadow of the Holocaust continued to loom large, shaping the dynamics of their interactions.

In the years after that agreement, Germany has by no means deviated from its commitment to confronting its historical responsibility. It has provided ongoing support for Holocaust survivors, funded educational initiatives, and worked to preserve the memory of the Holocaust.

For Israel, the relationship with Germany has evolved into a strategic partnership, albeit one that remains sensitive to the historical context.