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Bush offers Turkey up to $8.5bn
WASHINGTON (Reuters) -- Despite a rift with Ankara over American troop deployments, U.S. President George W. Bush's war budget for Iraq includes up to $8.5 billion in direct loans or loan guarantees for Turkey, according to White House documents released on Tuesday. In a surprise move, Bush offered $1 billion in cash grants to Turkey to cushion the shock of the war with Iraq. If approved by the U.S. Congress, the White House said the grants could be used to secure loans "not to exceed $8.5 billion." "The administration thought it was prudent to put aside some money to help our ally and friend Turkey deal with whatever economic consequences might arise," U.S. State Department spokesman Richard Boucher said. But he added; "At this point, ... I'd say it's a request not a commitment." White House spokesman Ari Fleischer cited Turkey's "impressive progress" stabilizing its economy, and U.S. officials said the new money would be contingent on Ankara carrying out International Monetary Fund-backed reforms. It remains to be seen, however, whether the aid will be made available as many members of Congress are upset at the Turkish parliament for refusing to allow 62,000 U.S. troops into the country to invade Iraq. Arizona Republican Rep. Jim Kolbe, who chairs the U.S. House of Representatives Appropriations foreign aid subcommittee, said Turkey's loans would be a "tough one" to sell to lawmakers. "I would not want to try to predict how Congress is going to view requests from Turkey," Kolbe said. But he added: "Over the long haul, Turkey has been a very important ally of the United States." Turkey not banking on creditTurkish economic officials told Reuters it was not clear when or if the money would become available and said they were sticking by budget plans drawn up under an $16 billion IMF loan deal that do not account for the credit. "We have done everything we needed to do without the expectation of this credit and we will continue to work that way," an economy official told Reuters. Officials say past experience teaches them that the process of congressional approval can be long and uncertain. Relieved Turkish markets rose on Tuesday on reports of the U.S. aid. U.S. congressional aides said the money was added to Bush's budget request as a goodwill gesture to the cash-strapped Turkish government. "They (U.S. officials) don't want to see them (the Turks) go under," a senior congressional aide said. The aid could also be leverage in talks between the United States and Turkey over Ankara's desire to push troops into Kurdish-run areas of northern Iraq, which Washington opposes. "A portion of this ($1 billion in grants) may be used by Turkey to pay fees to cover the budget cost of up to $8.5 billion in direct loans or loan guarantees to help Turkey in carrying out comprehensive economic and financial reforms and relieving potential balance of payments needs that may result from hostilities in Iraq," according to a budget document released by the White House. Ankara wanted moreWhile more than expected, the aid is only a fraction of what Washington had initially offered its long-time NATO ally for "full cooperation" in the Iraq campaign. The White House scrapped plans to provide $6 billion in direct aid and up to $24 billion in loans after the Turkish parliament refused on March 1 to open its bases to U.S. troops. After a lengthy delay that upset U.S. war planners, the parliament did authorize overflight for U.S. warplanes attacking targets in northern Iraq. But tensions remain that could thwart the U.S. aid. U.S. Deputy Secretary of State Richard Armitage told Public Television's "The NewsHour with Jim Lehrer" some "neuralgia," or severe pain, lingered over Turkey's rebuff on the troops but Washington respected the fact this was a democratic decision. The United States and the European Union have told Turkey not to send forces into northern Iraq, fearing clashes between them and local Kurdish militia helping small numbers of U.S. troops secure the area. But agreement has yet to be reached. "We need to keep our Turkish friends and our Kurdish friends from getting at each other's throats," Armitage said. "We're spending a lot of time and diplomatic political muscle trying to get it done." Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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