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Only hours before Israeli Prime Minister Binyamin Netanyahu touched down in Berlin for talks last week, Chancellor Angela Merkel's administration announced that it would stop pumping billions of euros' worth of crude oil payments into Iran's coffers.
The announcement came after news surfaced in the German press that Foreign Minister Guido Westerwelle has allowed the Hamburg-based European-Iranian trade bank (EIH) and Germany's central bank, the Bundesbank, to process oil payments from India to the National Iranian Oil Company, a financial arm of Iranian President Mahmoud Ahmadinejad.
The US has sought to block India's Asia Clearing Union from putting through the 9 billion-euro payment, and France, the US and the UK have, over the years, worked to isolate Iran's energy sector.
The oil funds have swollen the pockets of Iran's regime, and provided not only desperately needed capital for its nuclear programme, but a financial shot in the arm for its terror subsidiaries, Hamas and Hizbollah.
Germany's main business daily, Handelsblatt, last week quoted Yinam Cohen, Israel's spokesman at its embassy in Berlin, calling for the immediate closure of the EIH.
Far too many German firms do business with Iran's regime
The scandal-plagued EIH is one example among many of Germany's economic support for Iran's rulers. As the German-Iran bank scandal surfaced, Dieter Graumann, the first Israel-born head of Germany's Central Council of Jews, said: "That far too many German firms continue unimpeded to conduct their repugnant business with the Iranian terror regime - the reigning world champion in Holocaust denial - is unfortunately a fact, and continues to be a crying shame."
After Ms Merkel and Mr Netanyahu met on Thursday, Iran was front-and-centre topic of their joint statements. But after the meeting, Ms Merkel stressed that current developments in the region, including Iran's progress towards constructing a nuclear bomb, make it "more urgent than ever" that peace talks be restarted.
If past is prologue, Israel will have some pressing worries about Germany's foreign policies. When Israel was clearly on the ropes during the 1973 Yom Kippur War, West German Chancellor Willy Brandt denied the Americans the right to use the Bremerhaven harbour to ship sorely needed military arms to Israel. Mr Brandt, like Ms Merkel over the Iranian threat, invoked pro-Israel rhetoric, terming German-Israeli relations to be of a "special nature" and declaring that "for us Germans there is no neutrality of the heart towards Israel". But Mr Brandt left the Israelis out in the cold.
Ms Merkel's decision to align her government with Russia and China over intervention in Libya - coupled with her pro-Iran trade and bank policies - has thrust her second administration into a decidedly unsavoury anti-Western camp. Will she reverse direction?
Benjamin Weinthal is a fellow at the Foundation for Defence of Democracies