Secretary of State George Shultz is continuing to maintain that the Reagan Administration will not make a specific request for economic assistance to Israel until further progress is made in reforming the Israeli economy.
Discussing the Administration’s proposed foreign aid package for the 1986 fiscal year before the Senate Foreign Relations Committee Friday, Shultz declined to be specific on what reforms Israel would have to adopt.
“I just think it’s hard to say by any formula when you do what, “Shultz said in response to a question. But he suggested that delaying a decision could help Israel take austerity measures that political considerations might otherwise prevent. “I think that to a considerable degree holding back helps them,” he said.
At the committee hearing, as well as in an earlier press conference, Shultz said the U.S. was looking for such long-term reforms in the Israeli economy as budget cuts, controls of the money supply and linking the Shekel with European currencies.
There had been considerable speculation here that the Administration had been withholding a decision on Israel’s request until Egyptian President Hosni Mubarak ended his visit to Washington since Mubarak in his meetings with President Reagan and other Administration officials also sought increased aid for Egypt. Israel Finance Minister Yitzhak Modai who met Shultz earlier a ppeared optimistic that the Administration would be favorable to Israel’s request for $1.8 billion in supplementary aid over a two-year period, including $800 million for 1985.
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