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.
Even if 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 defense projects.