It seems like the Israelis and the Germans are getting along fine. Germany has paid more reparations than was asked, a good sign of friendship.
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The sums paid out by the postwar German government significantly affected Jewish life. During the first ten years of the agreement (1953-63), the Israeli historian Tom Segev reports:
the reparations money funded about a third of the total investment in Israel's electrical system, which tripled in capacity, and nearly half the total investment in the railways, buying German diesel engines, cars, tracks, and signaling equipment. Equipment for developing the water supply, for oil drilling, and for operating the copper mines ... was bought in Germany, as well as heavy equipment for agriculture and construction - tractors, combines, and trucks.2
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http://www.normanfinkelstein.com/id115.htm