“The New York Times” quotes the US Embassy in Israel as saying that combined American military and economic assistance to Israel has reached $100 billion since Israel was founded in 1948.
US aid to Israel for implementing the disengagement plan and developing the Galilee and Negev will probably comprise a mix of grants and loan guarantees for Israel to raise money on the private market, similar to previous aid the US has given Israel.
This means that the anticipated US aid will enable Israel to issue in the US bonds at almost the same interest rate as T-Bills for another three or four years, after using up the loan guarantees from the previous US aid package. Israel might be able to save tens of millions of dollars in interest payments, depending on the size of the new aid package.
On Monday, an Israeli delegation gave senior US National Security Council officials a proposal for aid detailing estimated costs for moving IDF bases from the Gaza Strip to Israel and for development of the Negev and Galilee.
Israeli and US sources said the meeting was devoted to a presentation of the needs and costs, and that the Israeli delegation had not cited a specific number for the aid. A State Department spokesman said, “I am unaware of any specific requests for aid made at the meeting.”
However, the costs listed in the presentation to the US are estimated to total over $2 billion. Israeli did not deny this estimate.
The Israeli delegation for the talks includes Vice Premier Shimon Peres, Israel Ambassador to the US Daniel Ayalon (who participating in the talks for the US loan guarantees in 2003), Prime Minister Office director general Ilan Cohen, Ministry of Finance director general Dr. Joseph Bachar, Office of the Vice Premier director general Efrat Duvdevani, Economic Minister to North America Ron Dermer,a nd Ministry of Defense officials.
Israeli sources were tight-lipped after the meeting, following an agreement that only US officials would make announcements about it. However, one Israeli source said, “The Americans are doing sacred work.”
A National Security Council spokesman reiterated longstanding White House phrases, saying, “The President welcomes the courageous leadership of Prime Minister Ariel Sharon. The disengagement plan creates real new opportunities.
Published by Globes [online], Israel business news - www.globes.co.il - on July 13, 2005