This is idiotic. Gandhi hated that Pakistan split off and said that he recognized their existence but would never recognize their “right” to exist.
That’s not even an international policy. Does Castile have a right to exist? Does Kashmir? Does Kurdistan? Why doesn’t Germany demand the same for others?
No. Germany can recognize Jewish lives and the worldwide Jewish community without needing to play into the hands of a rightwing apartheid state and getting involved smack in the middle of their political dispute. This isn’t hard; it’s like being able to say Black Lives Matter without having to support and endorse the controversial policies of Louis Farrakhan.
If "their right to exist" weren't used to mean "their right to take land from Palestinians and create settlements in land they took through violence" it would be a bit simpler to agree with the statement, but the foundation of Israel itself has always been on pretty shakey ground. The only reason Israel has a right to exist is because it's impractical that they'd leave at this point. They should leave the land they've stolen though.