U.S. Will Release Loan Guarantees for Immigrant Housing, Says Moda’i
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U.S. Will Release Loan Guarantees for Immigrant Housing, Says Moda’i

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The Bush administration has agreed to issue guarantees for $400 million in loans for Israel, so that it can provide housing for Soviet Jewish immigrants, Israeli Finance Minister Yitzhak Moda’i said Tuesday.

“The guarantee of $400 million is now valid,” Moda’i told the Jewish Telegraphic Agency after meetings with Deputy Secretary of State Lawrence Eagleburger and Treasury Secretary Nicholas Brady.

An Israeli Embassy official said the final details would be worked out during meetings in New York this week between Secretary of State James Baker and Israeli Foreign Minister David Levy. The two were scheduled to meet there late Wednesday afternoon.

Although Congress approved the loan guarantees last spring, the administration has held up final approval until it receives assurances that the money will not be used to help Soviet Jews settle in the West Bank or the Gaza Strip.

Eagleburger assured Moda’i that the United States would do its best to help Israel overcome its economic difficulties. “We are aware of Israel’s needs and hope to find a way” of meeting them, he was quoted by the embassy official as saying.

Moda’i said he discussed with administration officials both Israel’s new economic plan and the economic problems currently facing the United States.

“We did not go into specifics,” he said. “We discussed the overall situation.”

Moda’i denied making any specific requests for U.S. assistance. “I didn’t come this time to ask for anything, just to clarify positions,” he said.

“You don’t come off a visit and take all the goodies and come back home,” Moda’i said. “We would rather have it on a continuous basis than a one-time deal.”


The finance minister apparently was referring to his proposal that the United States cancel Israel’s $3.7 billion military debt.

He voiced the idea in Israel after President Bush asked Congress to forgive Egypt’s $7.1 military debt because of Cairo’s leadership in mustering Arab opposition to Iraq in the Persian Gulf crisis.

Israel’s total debt to the United States is $4.5 billion, but this includes economic aid as well as military assistance. Forgiveness would mean an annual savings of $400 million a year for Israel in interest and principle payments.

But Moda’i did not bring up this request in his meetings with the administration officials. He reportedly had been warned by lawmakers and Jewish leaders that Congress would be unlikely to approve cancellation of the Israeli debt and that it might turn down forgiveness of the Egyptian debt, as well, because of budgetary constraints.

But Moda’i told JTA on Tuesday that he still believes any forgiveness of the Egyptian debt has to be coupled with a similar move for Israel, because aid for Egypt has been linked to assistance provided to Israel since the 1978 Camp David Accords.

“Whoever has to make the decision will maintain the balance which was introduced after Camp David,” he said. “Whatever is done with the Egyptian loan will be done with the Israeli.”

Eagleburger also assured Moda’i that the United States and Israel “stand together” against the threat posed by Iraq, the embassy official said.

Moda’i reported that the United States will continue to preposition military supplies in Israel, which totaled $100 million during the current fiscal year.

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