US Offers Turkey Big Aid Package for Help in Iraq

15 February 2003

The United States is offering Turkey an expanded aid package that includes about $6 billion in grants and up to $20 billion in loan guarantees to secure Ankara's support in a possible invasion of Iraq, sources familiar with the offer said on Saturday.

President Bush met with Turkish Foreign Minister Yasar Yakis and others at the White House on Friday, but U.S. and Turkish negotiators have yet to strike a deal that would allow American forces to use Turkish bases as a springboard for an invasion of Iraq from the north.

On top of an estimated $6 billion in grants that would be provided to Turkey in the event of a war, the Bush administration is offering backing for up to $20 billion in loans that Ankara could secure through private banks.

As a condition for U.S. backing, Washington is demanding that the loans fall under the terms of Turkey's program with the International Monetary Fund.

It is unclear whether Ankara will accept the offer, which has ballooned in size in recent days. Turkey, which says it suffered massive economic damage from the Gulf War, has been pressing Washington for billions of dollars more.

Once a deal is reached, Bush would submit it to Congress for approval as part of an emergency wartime budget request.

Turkey, which has a 218-mile border with Iraq, is allowing the U.S. military to modernize some bases there for possible use in a war, but has not yet given Washington permission to use them for an offensive.

The aid package, coupled with a deal to limit the number of U.S. troops in the country at any one time, could help avoid a backlash from Turks widely opposed to a war against their fellow-Muslim neighbor.

A compromise to end a NATO crisis on protective measures for Turkey in case of a U.S.-led war on Iraq is likely to be agreed next Monday or Tuesday, diplomatic sources said.

The refusal of France, Germany and Belgium to let the 19-nation alliance start defensive planning for Turkey - as the United States has wanted - has plunged NATO into one of the most serious crises in its 54-year history.

Aid to Israel and Jordan

The Bush administration is finalizing separate multibillion-dollar aid packages for Israel and Jordan which, like Turkey. The two Middle Eastern nations say they would need U.S. grants and loan guarantees to offset the economic shock of military action to disarm Iraq of its alleged banned weapons.

An Israeli delegation is due in Washington next week and hopes to quickly finalize the details of its request for $4 billion in military assistance and $8 billion in U.S.-backed loan guarantees.

Under the Israeli proposal, the United States would deduct from the face value of the loan guarantees any Israeli expenditures on settlement activities in Palestinian areas.

Washington has promised Jordan more than $1 billion in aid that could be sent to Congress for approval in coming weeks, officials said.

Egypt is also seeking U.S. help in the form of a free-trade agreement.

The latest Turkish package would be well above the initial U.S. offer of $14 billion, which included grants and the funds needed to support up to $10 billion in loans.

The increase underscores just how important Turkish basing is to U.S. war-planners.

But it is unclear whether the sweetened offer would win support in Ankara, which stepped up pressure on Washington during two days of intense negotiations.

On Thursday Prime Minister Abdullah Gul backed away from a pledge to hold a parliamentary vote on Feb. 18 on whether to let an expected 30,000 U.S. troops use bases in Turkey to invade northern Iraq, saying the timing of the vote was tied to the negotiations in Washington.

The latest U.S. offer is still far below the amount Turkey was purportedly seeking. According to congressional sources, Ankara at one point asked Washington for close to $50 billion in aid - an amount U.S. officials dismissed as excessive.

Opinion polls show four out of five Turks oppose a possible war. Many fear the fallout could undermine the country's weak economy and stir unrest among Turkey's Kurds who mainly live in a region bordering northern Iraq.

But Turkish support could prove critical in shortening any war and cutting American casualties by allowing U.S. troops to launch a secondary, northern front into Iraq to relieve a main invasion from Kuwait.

© Reuters

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