Reports Persist That Israel Has Asked United States for $ 1 Billion in Aid

Reports persisted today that Israel has asked the United States for one billion dollars in economic aid to help offset an expected foreign currency deficit over the next five years. Most Israeli newspapers carried the report despite a disclaimer by the Foreign Ministry yesterday describing it as “pure speculation.”

The English-language Jerusalem Post said it had information from “government sources” that the request for economic aid was contained in an official paper communicated to the U.S. Government prior to Premier Golda Meir’s current visit to the U.S.

According to the Post, Israel advised the American authorities that it expects an overall deficit in its balance of payments of between $1 billion and $1.250 billion in the next five years. It said that the deficit would result from Israel’s heavy outlay for defense superimposed on abnormal development costs necessitated by immigrant absorption needs. The Post said the official paper placed Israel’s foreign currency expenditures for defense at more than $500 million per annum in the next five years, or more than double the predicted deficit.

The latter was calculated after both projected borrowing and other sources of capital inflow were taken into consideration, the Post reported. The paper said the Israel, request for economic aid was made on the grounds that Israel’s position is similar to that of other countries that have received American aid because their successful defense plays a part in Western security.

Israeli newspapers and the State-owned Kol Israel radio reported yesterday that Premier Meir requested economic aid and other items from the U.S. during her talks with President Richard M. Nixon in the White House last week. The Foreign Ministry promptly issued a statement claiming that neither it nor the Prime Minister’s office had any knowledge of such requests.

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