This deal got almost no attention at the time when I ran the story. The outcome is getting a lot of attention these days . . . just not in America.
About 80 million Egyptians are paying 40% of their income, on average, for food. Meanwhile, the new Islamist government wants to buy $1 billion worth of German-made submarines. But it has no money. Where can it get the money?
Why from you and me! So, the Obama Administration is putting together an aid package. It will forgive $1 billion in debts that Egypt owes.
I mean, who can oppose debt relief?
Then Egypt can afford to buy U-boats, assuming it gets $1 billion in aid from oil-rich Arab nations, which it expects to do.
President Barack Obama’s deputies are negotiating a $1 billion aid package with Egypt’s new Islamist government, even as Egypt’s cash-strapped military revealed that it is trying to buy $1 billion worth of German submarines that could threaten Israel’s fast-growing offshore energy projects.
I was disappointed when no Egyptian official was invited to deliver a speech at last week’s Democrat National Convention, thanking President Obama for the money.
The State Department has refused to comment. This seems prudent. After all, what is there to say?
The state of Israel has bought six German subs. The Islamists do not want to fall too far behind. They want to narrow the U-boat gap.
The Egyptian U-boats will be used to defend the pyramids from a potential Israeli attack.
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Published by Gary North on September 11, 2012. The original is here.
The deal went through. The first two U-boats were delivered in 2016. The third was delivered in May of this year.
In late May, an Israeli news site ran this illuminating story. The sale had to be approved by Israel's government in 2011.
In approving Germany's sale of submarines to Egypt, Netanyahu strengthened the military, which opposed the Muslim Brotherhood's President Morsi.Prime Minister Benjamin Netanyahu revealed on Saturday night in a Channel 12 News broadcast that his decision to allow Germany to sell advanced submarines made by Thyssenkrupp to Egypt was based on a "defense secret," that he could not divulge even to the Ministry of Defense and IDF. He shared it only with the National Security Council head and after the fact with the Attorney General and his team, which investigated the submarines affair.
Whatever the secret may be, all the signs indicate that it involves the covert triangular relationship between Israel, Germany, and Egypt, especially at a time when Egypt was undergoing political and security upheaval.
Even before the Arab Spring, when Husni Mubarak was president, Cairo and Berlin signed an agreement for the supply of two Thyssenkrupp-made German submarines to the Egyptian fleet. Those submarines were a very basic model. The two countries maintained good relations between them, among other things because of the supreme importance of the Suez Canal for German industry. What was surprising was that Germany's friendly attitude continued even after Muslim Brotherhood leader Mohamed Morsi gained power following the huge wave of demonstrations that swept over Egypt in 2011.
Germany's government contacted Netanyahu in 2012 to get approval. He was Prime Minister then, too.
There was no mention of the role played by President Obama in funding the sale by forgiving the billion dollars Egypt owed to the U.S. government.
But aren't Egyptians in poverty? No matter.
In addition to the two submarines already supplied, Egypt bought 330 air-to-air missiles, light arms, APCs, etc. German arms exports to Egypt totaled €708 million in 2017, and zoomed 205% in the past five years, compared with the preceding five years. In the past five years, Egypt became the world's third largest weapons importer, according to figures from the Stockholm International Peace Research Institute (SIPRI). Egypt also signed a huge €8 billion electric turbines construction deal with German company Siemens.
And what of Israel? The government approved in 2011. That is to say, Netanyahu approved. Could this have been a factor?
German corporation Thyssenkrupp responded for the first time to the recent accusations concerning a possible indirect profit gained by Netanyahu from the submarines deal through a holding in shares in the GrafTech company, controlled by US businessperson Nathan Milikowsky, Netanyahu's cousin.In response to a question from "Globes," a company spokesperson stated, "GrafTech is one of hundreds of suppliers in the corporation's steel transactions. The volume of business with it is in the low range of business with other partners." The spokesperson added that after looking into the matter thoroughly, it was found that "GrafTech never had a direct business connection with the corporations TKMS marine division; its only business was with the steel division." Thyssenkrupp's marine division was responsible for building the submarines for the Israeli navy, and was also a partner with another German shipyard in building four missile boats for Israel.
This announcement does not deny any connection between the company whose shares Netanyahu held, and which Milikowsky continued to lead until August 2015, and Thyssenkrupp. It merely separates the decision to procure submarines and warships and GrafTech's future profits. Still, since GrafTech announced that Thyssenkrupp was an important customer, and since the marine division was part of the corporation as a whole, there is a connection between the companies. If the legal authorities in Israel investigate the matter, they will have to examine how important this connection is.
This has become a major political scandal. His party was elected in April, but the Knesset dissolved itself on May 30 when Netanyahu was unable to form a coalition government. (The State of Israel has has had only coalition governments ever since 1948.) There will be elections in September.
Bottom line: American taxpayers funded this deal.
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