Why did Israel withdraw objections to German submarines for Egypt?

ThyssenKrupp Kiel  photo: Reuters
ThyssenKrupp Kiel photo: Reuters

A German spokesperson did not deny that a lawyer questioned by Israeli police participated in meetings about the sale of submarines to Egypt.

A month ago, a German photographer got a photo of a new shiny submarine in the Kiel Canal in northern Germany. It was an Egyptian submarine built by Thyssenkrupp's HDW shipyards on the way to Alexandria. This submarine was part of the sale of four submarines to Egypt, which is currently at the center of suspicions regarding a lawyer associate of the prime minister. The associate also served as the prime minister's personal emissary on various matters.

The emissary is suspected of promoting the submarines deal between Israel and Germany, which was expected to generate millions in profits for Michael Ganor, Thyssenkrupp's representative in Israel, and Advocate David Shimron through direct involvement in the submarines deal between Germany and Israel.

The first deal between Thyssenkrupp and Egypt was signed in November 2011, despite uncertainty about the situation in Egypt following the downfall of Hosni Mubarak and Israeli opposition. According to German media reports, the value of the deal was €500 million. The submarines were supplied to the Egyptian navy only last year. The first submarine was launched in December 2016 in a ceremony that included breaking a glass bottle containing water on the bows of the vessel, according to German media reports, and the second was launched last August. The amateur German photographer took a picture of the submarine on its way and posted it on the Internet.

The current suspicion concerns a "second wave" of submarines ordered by Egypt in a deal approved by the German government in February 2015. According to German and Israeli media reports, Israel withdrew its opposition to the sale of additional submarines to Egypt in 2014 and 2015. German Foreign Minister Sigmar Gabriel, who is still in office, signed the deal. Thyssenkrupp's TKMS division, under which the shipyards operate, announced that the submarines to be supplied would be less advanced than Israel's submarines, and that they would be supplied to the Egyptian navy by the end of 2021. It is believed that this deal also totaled €500 million.

The question is how the lawyer, whose name is barred from publication, was involved in the contacts with the German government concerning the submarines deal, in which Advocate David Shimron, his associate, had a significant financial interest. According to state's witness Ganor, at least, the lawyer, who was questioned today for the second time, helped promote the deal between Israel and Germany.

The memorandum of understanding between Israel and German was officially signed two weeks ago on Monday in a ceremony that took place with no photographers and with a limited number of people present. Israel Ambassador to Germany Jeremy Issacharoff and a representative of the German Ministry of Defense signed the agreement arranging the procurement of three more of Israel's submarines at a cost of €1.5 billion, a third of which is subsidized by the German government. This took place after the legal team sent from Israel worked for many days to make it clear that there was nothing improper in the decision to procure the submarines themselves and that the bribery case currently under investigation, following the state's witness agreement with Thyssenkrupp's representative in Israel, Ganor, was incidental to the deal.

The Germans inserted into the agreement a clause making the deal contingent on no corruption being revealed in the decision itself, but it appears that they were well aware of the role played by the lawyer in the deal, because he was to have been in direct contact with their representatives. It is possible that parties in the German administration saw nothing wrong in the lawyer's involvement in the deal with Egypt, and did not connect it with the deal with Israel, or they believe that there was nothing really improper about it.

Meanwhile, despite the interrogations and the open questions, construction of the warships designed to protect Israel's natural gas platforms is going ahead in Germany. In the coming weeks, two and a half years after the deal was signed, other shipyards belonging to Thyssenkrupp, the German Naval Shipyards, are scheduled to begin construction of the warships ordered from Germany without a tender. Their cost is estimated at €450 million, and the German government is expected to also fund a third of this amount. Local media in Kiel recently reported that construction, according to the drawings supplied by Thyssenkrupp, will begin this year, and the ships will be supplied to Israel by 2021.

Germany: Committed to Israel's security

A German government spokesperson refused to confirm that the emissary took part in work meetings concerning the submarines deal between Germany and Egypt. He told "Globes" that he could not discuss the identity of the participants "in secret talks between representatives of the German government and representatives of a foreign government," but added, "The German government is committed to Israel's security."

Published by Globes [online], Israel Business News - www.globes-online.com - on November 6, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

ThyssenKrupp Kiel  photo: Reuters
ThyssenKrupp Kiel photo: Reuters
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