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Israel signs multi-billion dollar deal for submarines from Germany

Sailors of the German Navy stand to attention during the launch of a new U36 submarine at the Eckerfoerde German Navy base on October 10, 2016 in Eckernfoerde, Germany. [Morris MacMatzen/Getty Images]
Sailors of the German Navy during the launch of a new submarine in Eckernfoerde, Germany [Morris MacMatzen/Getty Images]

Israel closed a deal yesterday to buy three submarines from German industrial giant thyssenkrupp [sic] for €3 billion ($3.4bn), the Times of Israel has reported.

"I would like to thank the German government for its assistance in advancing the agreement and for its commitment to Israel's security," said Defence Minister Benny Gantz. "I am confident that the new submarines will upgrade the capabilities of the Israeli Navy, and will contribute to Israel's security superiority in the region."

Part of the cost of the submarines will be met by the German government in accordance with an agreement signed between the two countries in 2017.

Moreover, an agreement valued at €850 million has been signed by the Ministry of Economics and Technology in Berlin to invest in Israeli industries, including defence companies. The agreement follows "several years" of planning and negotiations. It was signed in Tel Aviv on Wednesday by the director-general of Israel's Defence Ministry, General Amir Eshel, and the Chairman of the executive board of ThyssenKrupp Marine Systems, Dr Rolf Wirtz.

According to analysts, negotiations between Israel and Germany on the deal were delayed and complicated by a political scandal. Case 3000, also known as the "submarine scandal", would have seen Israel purchase warships and submarines from the German company after millions of shekels, it is alleged, had been "skimmed" off the top for personal gains.

According to thyssenkrupp, though, an internal probe found no evidence of corruption in its handling of the sales. The Israeli authorities have taken no action against the conglomerate.

READ: Israel concerned by positions of new German gov't

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