Israeli finance chief raps Mitchell on loan guarantees

JERUSALEM (JTA) – Israel doesn’t need United States loan guarantees, Israel’s finance minister said.

Yuval Steinitz made the comment Sunday, according to Israeli media, in response to what Israel regards as a threat made by the U.S. special envoy to the Middle East, George Mitchell.

In a Jan. 7 interview on PBS with Charlie Rose, Mitchell suggested that the United States could withhold loan guarantees and impose other sanctions to press Israel to make concessions to the Palestinians in renewed peace negotiations.

"You sit there and you say to Israel, look, if you don’t do this, what?" Rose asked.

"Under American law," Mitchell responded, "the United States can withhold support on loan guarantees to Israel."

Steinitz said that Israel has not needed to resort to the loan guarantees , to repay loans, according to the Israeli business daily Globes. The guarantees enable Israel to obtain a higher credit rating and lowers the interest paid on the debt.

"Only a few months ago we reached an agreement with the U.S. Department of the Treasury and Department of State on the loan guarantees for 2010 and 2011. There were no conditions attached," Steinitz reportedly said. "Israel has made and continues to make every effort, including difficult gestures, to renew the negotiations. We haven’t received any indication that the guarantees will be used to pressure us."

The United States gave Israel $9 billion in loan guarantees beginning in 2002, using a formula that deducts a dollar of guarantees for every dollar Israel spends on building in the settlements.

More than $3 billion of those guarantees are still available, according to Reuters.
 

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