On the 11th of Iyar, 1965, corresponding to May 13, Israel officially established diplomatic relations with the Federal Republic of (West) Germany (FRG). This event is quite notable since Israel was established in the shadow of the Holocaust, that was perpetrated by the previous German government. Israeli suspicion of, and anger toward, the Germans was widespread in Israel for many decades after the Holocaust.

Prior to official diplomatic contacts, the relationship between Israel and the FRG was purely financial, based on Germany’s payments of reparations to Israel for the heinous and murderous behavior of its predecessor government, Hitler’s “Third Reich.”

The Israeli public was bitterly split over accepting reparations from Germany.

In the early 1950s, Israel functioned under a policy of austerity due to the debilitating 1948 War of Independence, high unemployment and Israel’s absorption of tens of thousands of Jews from Europe and the Arab countries. Israeli Prime Minister Ben Gurion saw reparations both as a moral imperative as well as a practical means of alleviating Israel’s financial crisis. Ben Gurion argued that reparations should be accepted so “the murderers do not become the heirs as well.” Those opposed to reparations felt that it might serve as an expiation of the Nazis for their unspeakable crimes. Since this debate occurred only a few years after the Holocaust, the emotions were very raw.

Prior to the Knesset debate over reparations on January 7, 1952, 15,000 opponents rallied in Jerusalem’s Zion Square against the reparations bill, which ultimately passed 61-50. The rally turned violent, and ultimately disrupted the debate in the Knesset chamber, which was then located nearby on King George St. Menachem Begin, the leader of the opposition and a Holocaust survivor, gave a fiery speech at the rally against reparations, standing under a banner saying, “Our honor shall not be sold for money; our blood shall not be atoned by goods. We shall wipe out the disgrace.” Begin passionately told the crowd that when Haganah forces fired on the ship, Altalena, in Tel Aviv harbor in 1948, on which Begin himself was aboard, he famously ordered his Irgun forces not to return fire. “Now, however,” Begin told the crowd, “I will give the order to fight back.”

The reparations agreement was signed on September 10, 1952. The FRG paid Israel a sum of 3 billion German marks over the next 14 years, and 450 million marks to the World Jewish Congress. As of 2007, Germany has paid $25 billion Euros in reparations to the State of Israel and to individual Holocaust survivors.

Today, Israel maintains an embassy in Berlin and a consulate in Munich. Germany has its embassy in Tel Aviv and honorary consuls in Eilat and Haifa.

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