NEWS
rem at Sons
Guarantees May Come
At A High Price
Jerusalem (JTA) — A week
before Prime Minister Yit-
zhak Rabin is scheduled to
meet with President Bush,
U.S. Ambassador to Israel
William Harrop stressed
that the Bush administra-
tion is anxious to assist
Israel's economy.
But many here are con-
cerned that Washington's
- assistance may come at the
expense of Israeli economic
independence.
Mr. Harrop's remark was
made to reporters prior to a
get- acquainted session with
Israel's new Immigration
and Absorption Minister,
Yair Tsaban.
His comments were im-
mediately linked to news
reports stating that Wash-
ington intends to place
strenuous economic
• demands on Israel before
granting Jerusalem's re-
quest for loan guarantees, as
anticipated. These strictures
would come on top of polit-
ical demands for a set-
tlement freeze in the ad-
ministered territories.
The ambassador, diplo-
matic as ever, refused to be
drawn into these specula-
tions. But Israeli economic
sources nonetheless expect
tough and detailed discus-
sions between the Israelis
and Americans regarding
the specific purposes to
which the loans will be put.
Earlier this year, Mr. Bush
had rejected an Israeli re-
quest for $10 billion worth of
loan guarantees because of
the Likud government's ag-
gressive policy of settling
the administered territories.
Mr. Rabin has vowed to
discontinue that policy and
has already frozen much of
the construction in those
areas. Observers in Wash-
ington and Jerusalem say
• this change will help clear
the path for Mr. Bush's ap-
proval of at least part of the
original proposed package.
U.S. government
economists want to be sure
that the new Israeli
• government has formulated
a comprehensive program of
economic growth in which
new capital will be directed
toward investment in in-
frastructure and industry
and not to consumer con-
sumption or government
spending.
In this way, Washington
believes, the problem of job-
creation for the new immi-
grants — the ultimate goal
of the guarantees — can best
be addressed.
In addition, Washington
wants to see tangible pro-
gress in Israel's
"privatization" program and
in the liberalization of the
Israeli economy.
Israeli economic
policymakers are not at odds
with these goals. But there
is some natural apprehen-
sion in Jerusalem over the
extent of American
"supervision" of Israeli
policymaking and policy
implementation. One recent
headline in an Israeli news- ,
paper complained that the
Americans actually seek to
"control" the way the loan
funds are to be spent.
The influential newspaper
Ha'aretz endorsed the broad
goals outlined by the Ameri-
cans, but is nevertheless
questioning whether Israel
need accept everything that
Washington lays down.
The paper even went so far
as to ask whether Jerusalem
ought not to hold out for
more favorable terms for the
guarantees themselves and
referred obliquely to the
issue of "scoring," whereby
the Bush administration
will set a premium that
Israel will have to pay to
cover the risk involved in
granting the guarantees.
Ha'aretz, echoing the
views of many Israelis in-
volved in the process,
pointed out that Israel has
never missed payments on
its international debts and
that a high "scoring" will
tend to undermine the econ-
omic viability of the entire
loan process.
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ENTECH!
Israel Lifts
PLO Ban
Rome (JTA) — Israel's new
government will move to
decriminalize contacts with
the Palestine Liberation
Organization.
Israeli Foreign Minister
Shimon Peres told an Italian
newspaper that the govern-
ment would propose legisla-
tion, when the Knesset
reconvenes in October, lif-
ting the six-year ban.
But in an interview with
the Rome newspaper Il
Messaggero, Peres played
down the likelihood of any
future meeting with PLO
leader Yassir Arafat.
In Jerusalem, the Justice
Ministry said it was drafting
an amendment to a 1986 law
, that forbids contact with ter-
rorist organizations, in-
cluding the PLO.
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THE DETROIT JEWISH NEWS
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