Israel has not yet decided if and when to renew its request for special financial aid from the US. Yossi Bachar, director-general of the Finance Ministry, said on Sunday in Washington that such a decision was in the hands of the political levels in Jerusalem.
Bachar, who is attending the annual meetings of the World Bank and the International Monetary Fund, added that Israel has "lost some momentum" in getting its request approved by US administration and Congress. 'It is clear that to a certain extent we've lost momentum,' Bachar told reporters in Washington. "The best chance we had with the request was when we first presented it to the US in July, before the disengagement."
Israel is seeking a special aid package reaching $2.2 billion to be used for developing the Negev and Galilee and for costs incurred by the need to move military bases from the Gaza Strip into Israel. The US administration has never given its formal approval for the request, though President George W. Bush acknowledged that the US is interested in helping Israel develop these regions. American sources close to the administration said that in any case, it would not be likely that Israel would receive the full sum it is asking for.
Following Hurricane Katrina, Israel put on hold its request and canceled meetings that were planned between working groups, so as not to impose on the American budget. "It is not appropriate at this time to come to the Americans and ask for more money," said Bachar.
The fate of the special aid package is now unclear, and though Israel did not formally shelve the request, it is not known if and when it will be renewed.
The special aid package was supposed to signal the US's support of Sharon's disengagement plan, but Israel made clear the money would not be used to relocate Gaza settlers, because the long-standing American view is that the US should not pay for Israel's decision to build settlements in the territories or to move these settlements.
Israeli officials in Washington said that while it was not clear whether Israel would receive the special aid package, they felt there would be no problem with the regular military and civilian aid that Israel gets from the US annually. Conservative politicians in the US have begun to talk of the need for an across-the-board cut for the 2006 budget, to deal with the increasing deficit, and if such a decision is made, foreign aid to all countries will be slightly reduced.
In his meetings with world financial leaders and investment bankers in New York and Washington, the director-general of the Finance Ministry presented the reforms the Israeli economy is undergoing and promised that the new finance minister, Ehud Olmert, will continue implementing the reforms set out by the former minister Binyamin Netanyahu.
Bachar said Sunday that whoever he spoke with should be interested in the Israeli economy and view the Gaza disengagement as a step that would improve Israel's financial stability.