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Customers browse household goods on display in a store at the Mamilla pedestrian mall in Jerusalem in 2011. Many young Israelis see Berlin as a haven from the economic and social difficulties plaguing their country.Seven decades ago, Gil Mincberg's grandmother immigrated to Israel after surviving Nazi persecution. Two generations later, Mincberg has left the Jewish state — for the capital of Germany.

"I feel like I have better opportunities" than in Israel, Mincberg said, raising his voice to be heard over the indie rock soundtrack at Kindl Stuben, a cafe in Berlin's scruffy Neukoelln neighborhood. Just as important, the 26-year-old software developer notes, "my cost of living has gone down dramatically."

For many years after World War II it was taboo for Israelis to move to Germany. These days Berlin is among the top destinations for those priced out of housing and struggling with grocery bills. And for people whose forefathers were German Jews, Berlin makes sense because it's easy to get dual citizenship. The number of Israelis in the city has risen by about 40 per cent since 2006, Berlin authorities say.

Unlike Israel's pioneers — mostly European immigrants fleeing anti-Semitism and motivated by an ideological commitment to Zionism — many young Israelis see Berlin as a haven from the economic and social difficulties plaguing their country. The city today is home to about 17,000 Israelis, according to the German embassy in Tel Aviv.

Tomer Mazie, who was entitled to a German passport because his grandparents came from the country, has received 752 euros a month in unemployment benefits since arriving a year ago, helping him get by as he learns the language. "I'm not here for the benefits," the 26-year-old said over tea in a Turkish restaurant in central Berlin. "But it doesn't hurt."

While Israel's economy has outpaced most developed countries with average growth in the past five years at 4 per cent, versus 0.7 per cent for OECD countries, many Israelis say their standard of living is slipping as salaries are outpaced by prices. Since 2008, apartment rents have risen 51 per cent while average wages have dropped 1.6 per cent, according to government figures. Consumer prices have jumped 16 per cent. Rising rents and a relative scarcity of affordable housing sent thousands of Israelis into the streets of Tel Aviv during the summer of 2011.

"In Berlin, the young feel they can pay their bills and not end the month with a negative balance in their bank account," said Goldi Gottlieb, marketing chief in Israel for the German National Tourist Board. Her daughter recently moved to Germany with her husband after serving in the Israeli Navy. "They tried to make it here but they saw they weren't getting anywhere."

Emigration from Israel has always been a difficult subject. While many Israelis come back after spending time abroad, for at least a decade more have left than have returned. In 2011, the most recent data available, 16,200 Israelis departed Israel for a year or more, and about 9,500 came back, according to the Central Bureau of Statistics.

Those who leave are often talented people lured by better opportunities abroad. When two Israelis living in the United States won Nobel prizes in science last October, locals asked why the winners weren't working in Israel.

A greater share of Israeli researchers live in the United States than natives of 11 other developed countries, according to the Taub Center for Social Policy Studies, a research institute in Jerusalem. In 2008, the most recent data available, 29 Israeli academics worked in American universities for every 100 remaining in Israeli institutions — more than double the rate of the No. 2 country, Canada.

As many as 600,000 Israelis, or about 10 per cent of the country's Jewish population, live abroad, according to the Jewish People Policy Institute, a research group in Jerusalem. The Berlin regional statistical office says there were 3,578 Israelis in the city last year, up by about two-fifths from 2006. The German embassy explains the discrepancy with its estimate by saying that many Israelis are living in Berlin on German or other passports, and some are in the city illegally.

Berlin's community is small compared to the 200,000-plus Israelis in the U.S. — and the 160,000 Jews who lived in the city in 1933. The trend, however, has seized the national imagination because of the symbolism of Israelis moving to a city where Jews were hounded and killed.

Germans "attempted to murder my father only because the Jews did not have a state of their own," Finance Minister Yair Lapid wrote on his Facebook page in October. "Forgive me if I'm a little impatient with people who are willing to throw away the only Jewish country just because Berlin is more comfortable."

With growing disenchantment in Israel, Lapid's comments drew a sharp rebuke. Hundreds responded on his Facebook page, criticising his lack of sensitivity to a middle class increasingly burdened by rising prices, even accusing the finance minister of being a trigger for the emigration with austerity measures he imposed last year. The criticism elicited another letter from Lapid two weeks later, acknowledging the "middle-class is collapsing" while saying the discussion "cannot be confined to the cost of living."

Eyal Frayden says he'll return to Israel, though for now he's enjoying life in a place where grocery shopping doesn't break the bank. On his first trip to the Aldi supermarket near his flat in Berlin's Prenzlauer Berg neighborhood last year, he paid 13 euros for milk, meat, and other staples — a bit more than half what a similar bag of groceries would have cost in Israel, he says.

He took a picture of the receipt and posted it on Facebook, prompting a heated conversation among his friends about whether it was acceptable for young Israelis to leave their country as the cost of food and housing rises.

"Everyone was riled up by the discussion," the 27-year- old former management student said over a hamburger and cold beer at a pub in Berlin's artsy Kreuzberg district.

For Hagar Levin, the difference is health care. After discovering she had an eye disease that would require replacement of both corneas, the 26-year-old sought treatment in Israel but struggled with the bureaucracy and a lack of organ donors. Since moving to Berlin two years ago, she says she has found the health-care system easier to navigate — though she says her grandmother, who fled Germany in 1933 as Hitler came to power, might have been appalled at her move.

"I understand that there are people who can't bear coming here for emotional reasons, and I respect that," she said, pouring mint tea for guests in her spacious Kreuzberg apartment. "But life here is great and Berlin is a wonderful city."

David Wainer – Bloomberg News

— With assistance from Birgit Jennen in Berlin.

Image: David Wainer