US Treasury Secretary Timothy Geithner and Israeli Treasury director-general
Doron Cohen signed an agreement in Washington on Wednesday that will extend US
loan guarantees to Israel to 2016.
The agreement, signed on the sidelines
of the US-Israel Joint Economic Development Group (JEDG) forum, gives Israel
four more years to use $3.8 billion in guarantees left over from the $9b. in
guarantees granted in 2003. The guarantees are conditional on Israel meeting
deficit and expenditure targets and making economic reforms.
Israel does not take advantage of the loan guarantees, having American backing
helps it obtain favorable rates on borrowing abroad.
The guarantees come
on top of more than $3b. in military assistance and joint US-Israel missile
Finance Minister Yuval Steinitz said in a press
statement that the agreement is “important evidence” of the special economic
relationship between the US and Israel.
Israel’s economic attaché in
Washington, Eli Groner, said it shows much more than just American support for
the Israeli economy, explaining that it is also a considerable diplomatic
expression of support.
At least one Israeli official has expressed
displeasure at continuing to accept US loan guarantees.
Bank of Israel
Governor Stanley Fischer, speaking at the annual Caesarea Forum in June, said:
“It is unhealthy for a state that is proud of its sovereignty to turn to
external actors every time there is a problem. I would prefer that we stand on
our own two feet.”
The annual JEDG forum has been held since the
mid-1990s and focuses on bilateral economic issues. Topics being discussed at
this year’s two-day event include natural gas, alternative energy, the Israeli
labor force and the euro-bloc troubles.
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