Israel Matzav: Mitchell gets put in his place

Mitchell gets put in his place

As I noted late Saturday night, US Special Middle East envoy George Mitchell threatened in a PBS interview late last week that the US would withhold aid money from Israel if it was not forthcoming with the 'Palestinians.'

It was clarified that Mitchell specifically meant loan guarantees that the United States has been issuing since the early '90's on Israel's behalf. The guarantees, which have never cost the US a dime, enable Israel to borrow at cheaper rates because the US has a better credit rating.

On Sunday, Finance Minister Yuval Steinitz lashed out at Mitchell.

In the wake of threats by U.S. envoy George Mitchell that Washington may pull its loan guarantees to Israel if Jerusalem does not make concessions to the Palestinian Authority, Finance Minister Yuval Steinitz said Sunday that Israel was not planning to use the guarantees anytime soon anyway, and that Israel had no trouble raising money on its own without the guarantees. In addition, he said, the U.S. had renewed the guarantees for 2010 and 2011, with no strings attached.

Steinitz said that "Israel has and continues to make an effort to renew talks, including granting difficult 'gestures.' I have received no indication that the U.S. plans to use the guarantees to pressure us."

That was big news here, but not as big as what happened later in the day. Four US Senators are here visiting. Independent Joe Lieberman (Connecticut), and Republicans John McCain (Arizona), John Barrasso (Wyoming) and John Thune (South Dakota) all said that they would oppose any effort to withhold the loan guarantees from Israel.

Lieberman said unequivocally that any attempt to cancel financial guarantees to Israel will "not pass Congress."

McCain also weighed in on the issue, stating that any talk of withholding guarantees from Israel in order to pressure it is not helpful, and "I don't agree with it."

The senior senator from Arizona said that while he held Mitchell in the highest regard, "We disagree with that comment," and that he was sure that it was not the policy of the Obama administration either.

Barrasso and Thune agreed.

Let's go to the videotape.



As you might recall, the Bush I administration withheld guarantees out of anger with then-Prime Minister Yitzchak Shamir in 1991-2.

US backing for Israel's loan guarantees has been a hot issue in the past, most pointedly in the early 1990s when the administration of George H. W. Bush faced a head-on collision with the Likud premier, Yitzhak Shamir, who refused to curtail settlement building in the West Bank. Ultimately, the Bush administration decided it would subtract equivalent amounts of money from the $10 billion in loan guarantees for every dollar Israel spent building settlements in the occupied territories. The outcome of the spat was a low-point in US-Israel relations.

"Theoretically of course, the withdrawal of loan guarantees could be an act of pressure, but Israel doesn’t really need loan guarantees," says Peter Medding, an expert on US-Israel relations at the Hebrew University of Jerusalem. "But if they try to do it, as they did very unsuccessfully in the early 1990s, it would have to come from the White House. I don't think it's Obama's style, and I don't think it fits the circumstances. If anything, they've been trying to persuade Abbas to come to the party, and are still waiting for him. "

Mitchell has been put in his place. Heh.

Israel Matzav: Mitchell gets put in his place