Loan Guarantees for Israel

The new government of Yitzhak Rabin promises much, but the U.S. government should wait and see what he delivers before underwriting any loan guarantees. On at least two occasions an Israeli government promised an American President that it would stop settlement construction in occupied Palestine, but subsequently continued with construction.

The new Israeli government does not actually intend to halt construction, just not sign new construction contracts: 10,000 housing units will be completed, and approximately 40,000 Jewish settlers will move into occupied Palestine within the next year, representing a 40% increase in the Jewish population in the occupied areas (excluding the Jewish population of Jerusalem). The U.S. government must insist that these housing units not be completed, or if they are finished, then Palestinians must be allowed an equal opportunity to buy them.

Furthermore, Rabin’s freeze will also permit the development of new settlements as long as the government declares them “security settlements.”

Israel and its American supporters quickly reassure us that Israel will be able to repay the loans. As proof, they cite Israel’s perfect debt repayment record. The sole reasons Israel has a perfect record is that the American taxpayer repays Israel’s debt to the U.S. government. Since 1985, a U.S. law, sponsored by Sen. Alan Cranston, has stipulated that economic assistance to Israel shall not be less than the interest and principal that Israel owes to the United States. Without this law, Israel’s debt repayment record would be among the worst in the world.

Norman Kempster observed (Aug. 12) that by granting the loan guarantees Washington has “surrendered its leverage over Israeli settlement policy for most of the rest of the century.” There is no guarantee that the Rabin government or a future government will feel compelled to abide by the terms of the agreement.

ARCH MILLER

Arcadia