Missile boat crisis ends as Germany gives Israel $382 million discount

Agreement is a reversal of Berlin’s earlier decision to withhold the discount because of Israel’s settlement construction.

By Barak Ravid, HAARETZ

Israel Navy - IDF Spokeman's Office

Israel Navy missile boat.

A crisis between Israel and Germany over missile boats required to protect Israel’s offshore gas fields has ended after Berlin agreed to slash €300 million (about $382 million) off the cost, officials on both sides said. They are expected to initial an agreement for the boats within weeks.

The talks between Israel and Germany to purchase three fast missile boats to protect the gas rigs off Israel’s shore began a year ago. Haaretz reported that the deal was worth about €900 million.

Israel asked for a 30 percent reduction on the price, like it had received in previous deals on German submarines. The German discount, tantamount to a grant of hundreds of millions of euros, was part of Chancellor Angela Merkel’s policy to bolster Israel’s security.

In the beginning of May, about two weeks after the talks between Israel and the Palestinians stalled, German’s national security adviser Christoph Heusgen told his Israeli counterpart Yossi Cohen that Israel would not receive the discount and would have to pay their full price.

Heusgen said that following the breakdown in the peace talks with the Palestinians and the harsh criticism in Germany of Israel’s construction in the settlements, the Bundestag would not approve a grant of hundreds of millions of euros to subsidize the boats.

The German decision deepened the crisis that has been developing between the two states over the past five years, due to the tense relations between Merkel and Prime Minister Benjamin Netanyahu.

The low-key talks were jumpstarted at the end of June when Foreign Minister Avigdor Lieberman visited Berlin and met German Foreign Minister Frank-Walter Steinmeier. According to a senior Foreign Ministry official in Jerusalem, Steinmeier told Lieberman “don’t worry, it will be o.k.,” and Lieberman left the meeting optimistic about the possibility of getting the missile boats deal back on track.

The talks continued intensively for three months after the meeting between a small group of senior officials on both sides – Lieberman and Steinmeier, Israeli ambassador to Germany Yaakov Hadas and Germany’s ambassador to Israel Andreas Michaelis, national security advisor Yossi Cohen and his German counterpart Christoph Heusgen, as well as Finance Minister Yair Lapid and his counterpart Wolfgang Schäuble.

Israeli officials who asked to remain anonymous said there were several factors which led to the German decision to give Israel the grant despite the criticism over the failure in the Israeli-Palestinian peace talks and the continued construction in the settlements.

One official said Lieberman deserves most of the credit, for forging close cooperation with Steinmeier, who pushed to advance the deal in Germany. “Lieberman dealt with the issue incessantly,” the official said. “He played a very positive part and managed to enlist many German officials to advance the issue.”

Another official said Finance Minister Yair Lapid’s visit in Berlin for talks with German Finance Minister Wolfgang Schaeuble was extremely helpful in advancing the deal in its last stages.

Lapid also met Heusgen and told him he was trying to restrain Israel’s money transfers to the settlements.

Another official said the Germans understood that the missile boats were a vital security necessity for Israel. Cohen, who held talks with Heusgen and other German officials, told them there was a real threat that Hezbollah would attack the gas rigs.

Moreover, the deal was worth hundreds of millions of euros for the German economy and for shipyards which employ thousands of workers. The initial German refusal to give the discount made Israel examine the possibility of purchasing the boats from South Korea. Eventually, the Germans understood they too have an interest in promoting the deal and in putting the discount back on the table.

What finally swung the deal was Merkel’s personal commitment to Israel’s security, a Foreign Ministry official said. “Though she has a lot of criticism, when it’s come to Israeli security she puts it all aside,” said the official. “This deal will strengthen Israel’s strategic ties with Germany for the next 20 years,” he said.

October 19, 2014 | 35 Comments »

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35 Comments / 35 Comments

  15. yamit82 Said:

    Women and young girls would never choose alone but needed others opinions.

    I never ask another woman’s opinion, always been somewhat aloof, never one of the girls. I can’t stand after shave or cologne on a man. I n handsome man dept. actor Tobias Menzies.

  16. @ honeybee:

    I used to sell Liz Claiborn
    and Chanel, Chloe and Poison by Dior.

    All exact knockoffs we called them our version of _________

    Absolutely
    no difference in scent, and if anything our product lasted longer. At the Time in Israel most women preferred to pay 10 times more for the original brand. Women and young girls would never choose alone but needed others opinions.

    Strange creatures women are. 😉 Dallas just scored 🙁

  17. @ honeybee:

    2nd list:
    Ed Hardy For Women
    Viva La Juicy by Juicy Couture
    Armani Code For Women By Giorgio Armani
    Fancy Love EDP By Jessica Simpson
    Chole Eau De Parfum
    Acqua Di Gioia For Women
    Contradiction from Ck
    Gucci By Gucci EDP spray
    Shi from Alfred Sung
    Pure Poison from Dior

  18. Depends on the season, right now Liz Taylor’s “Gardenia” and something I bought at the flea market. I n the summer a Rose scent that was a gift and Liz Claiborn.

  21. yamit82 Said:

    Women do but buy on scent but what other women tell them is good. They are also brand conscience.

    That statement pretty much sums up what you know about women.

    yamit82 Said:

    d you leave anything for others to buy???

    Bought 3 DVDs two ” Snatch”, one “The Doors”, a ceramic pot and a painting. I was exhausted after yesterdays indulgence.

  23. honeybee Said:

    And do you know what’s currant ?????????

    Can Can by Paris Hilton
    Lovely from Sarah Jessica Parker
    Burberry Brit For Women By Burberry
    Eternity By Calvin Klein
    Euphoria EDP for women from Ck
    Sofia For Women By Sofia Vergara
    Chanel no 5
    Si Giorgio Armani By Giorgio Armani
    Obsession from CK
    Guess EDP For Women

    Women do but buy on scent but what other women tell them is good. They are also brand conscience.

  29. @ Economist:

    Gas goes to Egypt contracts singed last week,

    Spain has the LNG plants in Egypt and the ships

    The same pipeline Israel used to import from Egypt will now be used in reverse. Contract for over 15 years est, 65 billion dollars.

    I thought you were smart.

    GO GIANTS!!!!!!!!!

  30. Very interesting. The Germans had also to consider how much, if any, gas they might get from Israel, the costs of new LNG ships and port infrastructure or a pipeline, and cheap Russian gas with it’s security downside. On balance I doubt economic factors played much of a part in the final reversal.

  31. yamit82 Said:

    bernard ross Said:
    Got a current one that does the same?
    The Beach

    “I can’t believe I’m saying this, but that’s a good idea” 😛

  33. yamit82 Said:

    I agree with your general analysis but change “Arpege”?? to something a bit more current.

    True, True but since the commercial decades ago I have not seen an as useful, amusing and recognizable “analogy”, so from time to time I still use it and some old folks like me tend to remember it. Got a current one that does the same?

  35. there is also the incentive of receiving energy from the fields to be protected. I am wondering if the great rhetoric of the euro politicians is a drama to soothe their streets: “promise them anything but give them Arpege”. Sometimes the louder the rhetoric the greater the distraction.