Germany is threatening to stop the delivery of a "Dolphin" submarine to Israel in protest over the country's settlement policies. Government sources confirmed the development when asked by SPIEGEL following speculation last week in the Israeli media that Germany might halt the sale.
The move is in response to the recent decision by the Israeli government to approve the construction of 1,100 homes in Gilo, an Arab part of Jerusalem captured from Jordan in the 1967 Six Day War. The Israeli government considers the area to be a Jewish suburb, but the international community contests that description.
The threat by German Chancellor Angela Merkel has been the subject of considerable concern in Israel.
The nuclear-weapons capable Dolphin submarines are an important part of the Israeli military strategy. The navy already owns three of the submarines and two further vessels are currently being built by Howaldtswerke-Deutsche Werft (HDW), the shipbuilding division of German steelmaker Thyssen-Krupp, in Kiel, Germany.
This summer, the German government approved €135 million ($189 million) in funding to assist Israel with the purchase of a sixth Dolphin submarine over the next four years. Now, however, that deal for the sixth submarine is in jeopardy.
In addition to its capability of firing nuclear warheads, the submarine also has a larger cruising range because of its advanced modern fuel-cell propulsion technology.
Germany has been delivering submarines to Israel since the end of the 1990s following the first Gulf War. The first two submarines given to Israel were entirely subsidized by the German government, but those subsidies are being reduced with each additional purchase. Under the current program, the government is subsidizing one-third of the cost of the submarine.
'A Five-Year Plan on Holocaust Reparations'
In January, SPIEGEL reported on a United States diplomatic cable obtained by WikiLeaks dating back to January 2005 indicating that the partial subsidization of some submarine sales could be a backchannel diplomatic response to demands for Holocaust reparations payments made by Israel at the time.
An advisor to then-prime minister Ariel Sharon informed the United States Embassy in Tel Aviv of a "five-year plan on Holocaust-era reparations, pensions and restitution." The document cited the advisor stating that the plan envisioned the Israeli government calling for Germany to take over responsibility for restitution payments that had been ignored by East Germany in the sum of around $500 million, "possibly in the form of new German-made submarines." It was a portion of a 1953 German-Israeli reparations agreement "that had been attributed to East Germany, but never paid." A member of the working group from the prime minister's office contended "that such a GOI claim would not violate any 'closure' agreements about Holocaust-era claims because it would be based on the unfulfilled portion of a pre-existing agreement."
The timing of the demand was good because in 2005, Germany and Israel celebrated 40 years of diplomatic relations. Redress also played a role in the submarine deals at the time, sources with knowledge of it confirmed to SPIEGEL in January. Then-Chancellor Gerhard Schröder approved the deal for the submarine exports during his last days in office in November 2005.