Reckoning with the Past, Committing to the Future: Israel and Germany’s Reparations Agreement

By Randy Pinsky

Less than a decade after the full extent of the atrocities of the Holocaust were revealed to the world, two very unlikely allies - Israel and Germany - met to address the horrors of the Shoah. The result would be the legendary Luxembourg Reparations Agreement of 1952.

Extraordinarily contentious and emotionally triggering for all, meetings were held in secret due to opposition from both sides.

On October 25, the Azrieli Institute was honored to host award-winning film director of Reckonings, Roberta Grossman, in commemoration of the 70th anniversary of the Reparations Agreement. Significantly in attendance was the Honorable Susanne Aschi-Glesius, Consul General of the Federal Republic of Germany, the Honorable Paul Hirschson, Consul General of the State of Israel, and Dr. Trudis Goldsmith-Reber, Professor Emerita in German-Jewish dialogue, McGill University; a powerful meeting in its own right. 

The World Was Reeling

What steps do countries take after a genocide? How do those impacted attempt to rebuild their lives, when all has been lost, stolen, killed or destroyed? As one of the Luxembourg Agreement negotiators soberly reflected; “the survivors lost everything. They had only the tattoos on their arms.”

War-child Dr. Goldsmith-Reber reflected, “there was heavy questioning of what had happened, why it happened and who was responsible for letting it happen.”

Western Europe was in shambles. Hundreds of thousands of survivors languished in displaced persons camps, all searching for ways to start their lives again.

Many sought refuge in neighboring countries, with nearly 700,000 moving to the newly created State of Israel between the years of 1948-51, nearly doubling the young country’s population. (Reckonings Film). Israel was already struggling to build its economy, defend its borders from hostile neighbors, and care for its own citizens; how could it possibly provide for this incursion of refugees

You’re On Your Own

In order to house and integrate the incoming survivors, Israel desperately needed additional support and resources. The first step was to “call…upon the four Occupying Powers to seek compensation for victims of Nazi oppression,” observed Luxembourg Agreement negotiator and former Nuremberg War Crimes Trials prosecutor, Benjamin Ferencz.

“[But] there was no response,''

The Allies and other countries refused to negotiate with Germany on Israel’s behalf to gain any form of funding. Indeed, the 1953 London Debt Agreement on Germany stipulated that “the issue of reparations would be shelved until there was a formal peace treaty between Germany and victim countries and claimants.”^[1]

In light of such resistance, two determined leaders took matters into their own hands; Israel’s first Prime Minister, David Ben-Gurion and Konrad Adenauer, the first Chancellor of the Federal Republic of Germany. The Conference on Jewish Material Claims Against Germany organization (“The Claims Conference)^[2] would be created to assist in the negotiations. 

Reckonings addressed this untold story, “profil[ing] the Jewish and German leaders who risked their lives…to negotiate the impossible…capturing the anger on one side, the shame on the other, and the anguish of all...” 

Attempting the Impossible

How does one even contemplate addressing the murder of six million people and supporting the survivors? With the sinking realization that external funds from Allied countries were unlikely to materialize, Israel realized its only chance for economic support would be from negotiating directly with Germany.

Not only would this allow Israel to assist those seeking refuge, but it provided a means for Germany to cautiously start moving beyond its reprehensible past. Indeed, Adenauer realized it was “the second founding act for Germany as a liberal democracy,” observed Consul General Aschi-Glesius, “[a means for] returning to the civilized world after the moral ruin of the Holocaust.

In Adenauer’s landmark September 1951 speech, he publicly acknowledged Germany’s collective responsibility for the crimes committed, the desire to forge relations with Israel and world Jewry, and the topic of compensation.

But it would not be an easy process…

Opposition on All Sides

With Germany in ruins and struggling to rebuild, many citizens did not understand the need to make such payments. Anti-Semitic sentiment was still strong and while Germans expressed remorse for the horrors committed, public sentiment to provide external monetary aid was low.

Similarly, many Israelis were aghast at the prospect of even considering dealing with what they viewed as the embodiment of evil. With the Shoah in such recent memory, this seemed like a blatant dishonoring of the memory of those who perished.

Groups stormed the Knesset and protests ensued, many led by Menachem Begin who would become one of Israel’s prime ministers (1977-83). He and others espoused an absolutist policy against any dealings with ‘blood money’ (The Reparations Agreement of 1952 and the Response in Israel).

So much was at stake; one Jewish witness emotionally shared, “it felt as if the souls of the six million who were murdered during the Holocaust were in the room…when the meetings began.”

Visionary Leadership

It is largely believed the Agreement was made possible due to the unique political character of the main protagonists involved. “[Ben-Gurion and Adenauer] both embodied the admixture of political interest and moral necessity,”persevering in spite of the situation’s intractability.

Reckonings depicted how they forged ahead in spite of the constant threat of violence, “knowing it would never be enough but hoping it could at least be…a step towards healing.”

The Power of Words

Due to the hostile context, negotiations took place in the Netherlands. Far from a smooth process, constant disagreements plagued the talks at every turn.

Germany would commit to supplying Israel with equipment and resources valued at 3.5 billion marks (later increased) to help resettle and reintegrate the survivors (UN Treaty).

But first, it was essential that the terminology be clarified. From the outset, the word ‘compensation’ was blacklisted due to obscene allusions of somehow ‘making up for’ or ‘balancing’ the brutal loss of lives.

There was also concern with the overly simplistic-sounding German concept of “Wiedergutmachen” (“to make things good again”). For this reason, the Hebrew word ‘shilumim’ (‘payments’) was opted for as it focused solely on the monetary, as opposed to moral, aspect.

A Standard in Moral Consciousness

The 1952 Luxembourg Agreement^[3] was forged under trying circumstances and set a standard for addressing crimes against humanity and perpetrator responsibility. Moshe Sharett, Israel’s then foreign minister, described the signing as a “political fact of enormous international significance, as something quite unprecedented” (The Beginning of a Remarkable Friendship).

^[1] Israel managed to do this as the negotiations pred-dated the conclusion of the London Debt Agreement. 

^[2] Historian and Claims expert Rachel Blumenthal (featured in the film) also spoke at the Azrieli in 2021, see “70 Years of Reckoning with the Past: The Claims Conference.”

^[3] Dr. Jenny Hestermann spoke about this at the Azrieli in September 2022, see "Staged reconciliation: German politicians visiting Israel in the Post-War Era."