[PEN-L:32562] Aid to Israel, Turkey and Jordan

["ken hanly" <khanly@xxxxxxxxxxxxxxx>]

>From Ha'arretz (sp?) Cheers, Ken Hanly


Tuesday, November 26, 2002 Kislev 21, 5763Israel Time:  17:05  (GMT+2)





U.S. expected to approve $14 billion aid request

By Moti Bassok




Israel will today submit a request for $14 billion in economic aid to U.S.
National Security Advisor Condoleezza Rice. President George Bush is
expected to quickly approve the request - $4 billion in defense aid. and
U.S. guarantees for $10 billion - with minor changes, Israeli sources said.

The sources said the Republican congressional majority would approve the aid
within 3-6 months. After Finance Ministry director general Ohad Marani and
Prime Minister Ariel Sharon's bureau chief Dov Weisglass submit the request,
it will be handled by both Israeli and U.S. officials who will determine the
duration of the grant and guarantees, and various technical details. The
guarantees will apparently be for five years but it is unclear how the
defense aid will be laid out.

Sharon told Defense Minister Shaul Mofaz during a meeting eight days ago
with Finance Minister Silvan Shalom, that as soon as the U.S. makes a
positive decision on the defense grant, he will consent to some of Mofaz's
requests for budget increases. The sources say the grant will allow the
government to direct defense spending to growth oriented projects.

Some treasury officials are not pleased with the request for such high
guarantees, fearing that some of the money will not be directed to growth
projects.

However, sources at the prime minister's office say news of the aid will
improve the country's international financial standing, and could encourage
both local and foreign investors to reconsider Israel. The U.S. aid will
also substantially influence the strategic situation in the Middle East.

Sharon first raised the question of aid in his Washington meeting with Bush
in mid-October. The formal request was completed by Marani's staff in the
past two weeks, with the explanation that Israel has increased military
spending in the past two years because of the Palestinian uprising and the
expected U.S. war with Iraq. Last week, Turkey and Jordan received generous
American military aid of $2 billion to prepare for the possible war with
Iraq.

The request for the guarantees - the option of getting improved loan terms
from U.S. banks - is based on Israel's need to stabilize the economy and
pull out of recession.

Last week Washington approved Israel's annual military aid of $2.16 billion
for 2004, and is expected to approve its civil aid soon.