PM plans to ask U.S. for aid that could top $10 billion

By Amnon Barzilai and Natan Guttman

An inter-ministerial team headed by Prime Minister Ariel Sharon's bureau chief, Dov Weisglass, is working on a proposal requesting American economic assistance that could top $10 billion.  The team includes representatives from the treasury, the Foreign Ministry and the Defense Ministry.
 

A government source said the reason for the aid request stems from the United States' expected campaign against Iraq coupled with the American desire that Israel not interfere with Washington's plans or use IDF troops against Iraq.  

Sources at the Prime Minister's Office said yesterday that American readiness to provide economic assistance has not been made in concrete terms.

However, a number of ideas have cropped up in Jerusalem over the type of aid Israel could use: cash, guarantees for low-interest bank loans from American banks, direct state-to-state loans from the U.S. treasury, and the conversion of some American defense aid into shekels.

Currently, Washington provides Israel $2.1 billion a year that must be spent in the United States on defense supplies. One proposal is for $2 billion to be converted to shekels and used to purchase defense equipment from Israeli manufacturers in the hope that it would invigorate the Israeli economy. The final proposal will be worked out by the inter-ministerial committee and the White House.

 
Discussions about economic aid came up during the prime minister's recent trip to Washington, and, in particular, during talks between Weisglass and National Security Advisor Condoleezza Rice.

Weisglass said the aid was necessary to get the Israeli economy moving; U.S. President George W. Bush mentioned American confidence in Israel's economy during a White House press conference with Sharon after their meeting last week.

Other than the annual economic aid, Israel expects fulfillment of a July 2000 decision made by then-president Bill Clinton to then-premier Ehud Barak for a $800 million grant. Since then, the sum has dropped to $200 million, and discussions were frozen, for bureaucratic reasons, after Clinton left office, according to the Americans. But with help of pro-Israel congressmen, discussions are expected to resume at the beginning of the new year.

Source: http://www.haaretzdaily.com/hasen/pages/ShArt.jhtml?itemNo=221671