The pessimism spreading in government circles here about Israel’s chances of getting U.S. guarantees for $10 billion in immigrant resettlement loans was confirmed Wednesday by Finance Minister Yitzhak Moda’i.
He told economic correspondents here that if the Americans do not underwrite the loans, Israel will seek financing elsewhere and will make unprecedented efforts to get investments from Diaspora Jews.
While the finance minister’s remarks reflected waning hope for the guarantees, he also seemed to be saying that Israel could manage without them if necessary.
That was a far cry from a statement Moda’i made earlier this week. The Israeli daily Ma’ariv published a story Wednesday quoting him as saying that if the United States did not provide the guarantees, it would eventually have to airlift food aid to Israel for “I million hungry people, immigrants to Israel,” just as it is now airlifting food to the republics that succeeded the Soviet Union.
Ma’ariv reported that Moda’i had just spoken to Israel’s ambassador to Washington, Zalman Shoval, who gave him a discouraging account of the state of negotiations with the Bush administration over the loan guarantees.
The United States has conditioned the loan guarantees on a freeze of Israeli settlement-building in the West Bank and Gaza Strip. The Shamir government has balked at this.
Although Israel has previously relied on its bipartisan support in Congress in disputes with the White House, Congress this time seems supportive of the administration’s position.
A POSTPONEMENT UNTIL SUMMER?
Moda’i said he expected the dispute with Washington to continue in the weeks ahead but could not say whether it would be on a political or economic plane.
Several Cabinet ministers said earlier this week that Israel would scale down settlement-building for practical economic reasons, but never under political pressure from abroad.
The Israeli daily Ha’aretz reported Wednesday that the Bush administration may postpone a decision on the loan guarantees until after the June 23 Knesset elections and the seating of a new government in Jerusalem.
Top U.S. policy-makers believe the guarantees could be “a determining factor in the Israeli election campaign,” Ha’aretz wrote.
But the newspaper added that many members of Congress do not relish the idea of approving the guarantees in late summer, just before their own re-election campaigns, because the guarantees are unpopular in American public opinion.
The guarantees would enable Israel to borrow $10 billion from private banks over the next five years. The money would be used to help provide housing and jobs for hundreds of thousands of immigrants from the former Soviet Union and Ethiopia.
Joblessness is a growing problem in Israel. The government reported this week that unemployment rose by 6 percent in January. There are now 144,000 job-seekers, 43,000 of them new immigrants, of whom half are university trained.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
