The Reparations Agreement between Israel and West Germany was signed in 1952. According to the Agreement , West Germany was to pay Israel for the slave labor and persecution of Jews during the Holocaust, and to compensate for Jewish property that was robbed by the Nazis.
Negotiations leading to the Agreement were conducted between the West German government, the government of the State of Israel, and the World Jewish Congress, headed by Nahum Goldmann. These discussions led to a bitter controversy in Israel, with the coalition government, headed by David Ben Gurion, claimed that reparations were necessary to restore what was stolen from the victims of the Holocaust. Opposition to the Agreement came from both the right (the Herut Party and the General Zionists) and the left (the Mapam Party) of the political spectrum: both sides argued that accepting reparation payments was the equivalent of forgiving the Nazis for their crimes.
The final debate over reparations, held in the Knesset in January 1962, was accompanied by a violent demonstration against the Agreement, led by Menachem Begin. Nevertheless, an agreement was signed in September of that year, and West Germany paid Israel a sum of 3 billion marks over the next fourteen years; 450 million marks were paid to the World Jewish Congress. The payments were made to the State of Israel as the heir to those victims who had no surviving family. The money was invested in the country's infrastructure and played an important role in establishing the economy of the new state.
As of 1956 Germany has paid reparations to individual Jewish victims of Nazism as well as to Israel and the World Jewish Congress.