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Last update - 08:57 29/10/2008
It's not the money, it's the symbol
By Aluf Benn
Tags: U.S., Barack Obama 

The global financial crisis will have an important effect on Israel's foreign policy and security: It will force Israel to give up some of the aid it receives from the United States. If the economic trend suddenly shifts - if the markets go back to climbing and employment rises - then the financial aid can be maintained at its current level. But if the predictions of a serious financial ebb come true and millions of Americans lose their jobs, homes and savings, Israel will not be able to remain indifferent and insist on receiving an unaltered financial aid package.

To prevent embarrassment and pressure, Israel would do well to initiate an aid reduction itself, which the new prime minister should raise in his first meeting with the new president in the spring. It's better to determine the punishment yourself than to wait until the aid is cut by the Americans and suffer more.

In the next few months, the scope of the financial crisis will become clearer, as will the way America plans to resolve it. Last year Israel reached an agreement with the Bush administration under which it will receive $30 billion in military aid over a decade. The aid comes to $2.5 billion this year, $150 million more than the previous year, and will increase gradually until it stabilizes at $3 billion a year. The financial aid is about a sixth of Israel's defense budget, and most of the money is slated for purchasing planes for the air force. Israel is allowed to convert about a quarter of the annual grant from dollars into shekels so it can buy from local industry as well.
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In the past, Israel also received financial aid in the form of an annual check that it could waste as it wanted. Benjamin Netanyahu stopped this grant when he came to power in 1996, and transferred half of it toward increasing military aid. The defense establishment sees any mention of reducing American aid as heresy, especially against the backdrop of the intensifying Iranian threat.

The grant is not just important because it charges some of Israel's security expenses to American taxpayers, but also because it makes a clear statement about American support and commitment to strengthening the Israel Defense Forces and maintaining its qualitative edge. The aid is considered a component of Israeli deterrence, not just a source of funding. That's why it is important for Israel to be at the top of the chart of recipients of American aid.

Israel's critics in the United States argue that the military aid distorts the allocation of resources, under the damaging influence of "the Jewish lobby." They say that instead of saving Africans who are starving or afflicted with AIDS, the United States is arming the most aggressive army in the Middle East, subsidizing the occupation and the settlements in the territories, and indirectly deepening the Muslim world's hatred of America. Paradoxically, such criticism just adds to the omnipotent image of pro-Israel advocates in Washington.

So far, U.S. aid to Israel enjoys firm bipartisan support. But even Israel's greatest friends in America are Americans first of all, and they must first worry about the problems of their country and their voters. And in order to ensure that they support Israel in the future as well, these friends of Israel must not be left vulnerable to charges of dual loyalty. It's true that the aid to Israel is negligible compared to the trillions lost on Wall Street and the huge sums allocated for saving the banks. But it's not the money, it's the symbol.

In speeches at the last AIPAC conference, presidential candidates Barack Obama and John McCain said they would honor the agreement to increase military aid to Israel. But the American Israel Public Affairs Committee convened in June, before the markets, investment banks, mortgage banks, insurance companies and real estate market all tanked. An Israeli request that the next president honors his campaign promise on this issue would be foolish and seen as an impertinent disregard for America's troubles. There is a precedent for such an Israeli move: When New Orleans was hit by Hurricane Katrina, Ariel Sharon retracted his aid request for the disengagement plan, the cost of which Israel absorbed on its own.

The defense establishment and treasury need to prepare now for the aid reduction, or at least for a halt in its gradual increase. The IDF will need to pull long-term projects and put off equipping new planes and ships. Some creative thinking will be necessary to consider alternatives to the U.S. aid, like a long-term loan of equipment or an expansion of American deployment in Israel beyond the U.S. radar system in the Negev.

Of course, there will also be an incentive to become more efficient. Political agreements requiring Israel to withdraw from the West Bank or Golan Heights could justify American compensation in the form of increased aid or special grants to fund security arrangements. But at the moment, no such deals are on the table.

Maintaining the relationship with the United States during its time of crisis requires Israel to take into consideration the problems of its friends, and to relinquish some of the financial aid it had expected to receive.
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  1.   ALUF BENN ignorant or just stirring against Israel a la Haaretz. 09:14  |  PETER SM 29/10/08
  2.   An act of solidarity and a "blow" to the (real) Jew-haters..... 09:59  |  Swiss (Dino) 29/10/08
  3.   It`s not the symbol, it`s the money 10:15  |  Natallie Durson 29/10/08
  4.   Practice what you preach 10:37  |  No Ha"are israelbash 29/10/08
  5.   agreed 11:18  |  john 29/10/08
  6.   The victims of Gush Katif are still suffering 11:35  |  Johnny Weintraub 29/10/08
  7.   US financial aid 12:26  |  Ehud 29/10/08
  8.   Self-evident 12:57  |  Motic 29/10/08
  9.   # 7 ehud 12:58  |  Axel 29/10/08
  10.   ehud 7 13:09  |  potobac 29/10/08
  11.   #10 potobac is no business man !! 13:27  |  victor hardman 29/10/08
  12.   #11, plenty of customers 13:41  |  jim 29/10/08
  13.   The money going going gone 14:01  |  Captain Zen 29/10/08
  14.   # 11 victor the business man 14:05  |  Axel 29/10/08
  15.   # 7 Ehud is mistaken 14:08  |  Natallie Durson 29/10/08
  16.   Anyone who expects any nation 14:15  |  Mark Lincoln 29/10/08
  17.   US AID TO ISRAEL 14:31  |  Mark 29/10/08
  18.   Money and war part 1 14:44  |  lady from USA 29/10/08
  19.   Money and war part 2 14:46  |  lady from USA 29/10/08
  20.   Natallie #3... even at the peril of scathing response... 15:26  |  Esther 29/10/08
  21.   The next great depression 15:43  |  Anonymous 29/10/08
  22.   to the Lady from USA 15:46  |  eric 29/10/08
  23.   Netanyahu should have taken all the aid he could have gotten 15:48  |  Anonymous 29/10/08
  24.   Johnny #6 15:48  |  Esther 29/10/08
  25.   Aluf Ben 16:06  |  albert 29/10/08
  26.   # 20 Esther 16:36  |  Natallie Durson 29/10/08
  27.   # 20 Esther - one other thing 16:43  |  Natallie Durson 29/10/08
  28.   Its not the money. Its the image. 16:47  |  Zooog 29/10/08
  29.   #20 Esther -- Having said all of that 17:00  |  Natallie Durson 29/10/08
  30.   Bin Laden hates USA because he is a racist freak 17:05  |  Anonymous 29/10/08
  31.   US aid can be there 17:07  |  lady from USA 29/10/08
  32.   Bin Laden and the Saudi family 17:11  |  Anonymous 29/10/08
  33.   bin Laden and the Saudi family 17:17  |  Anonymous 29/10/08
  34.   Natalie 17:28  |  Jonathan 29/10/08
  35.   Why are showing this? 17:28  |  Paul 29/10/08
  36.   It is our budget!!! 17:29  |  American 29/10/08
  37.   True friends stick together through thick and thin! 17:41  |  christoph 29/10/08
  38.   Worrying about Israel 18:23  |  SDHD 29/10/08
  39.   U.S. 18:29  |  2BlueStarMom 29/10/08
  40.   # 6 johnny 18:30  |  Axel 29/10/08
  41.   Natallie #26, 27 18:36  |  Esther 29/10/08
  42.   natallie 18:42  |  ehud 29/10/08
  43.   Money US gives Israel comes from Saudi Arabia! 19:02  |  Sam 29/10/08
  44.   Anonymous - the problem with fooling yourself 19:06  |  Mark Lincoln 29/10/08
  45.   Axel #40 19:08  |  john 29/10/08
  46.   For Natallie...addendum for #41... 19:59  |  Esther 29/10/08
  47.   Natallie #29 20:06  |  Esther 29/10/08
  48.   antisemitics and conspiracy theories 20:24  |  Anonymous 29/10/08
  49.   I never thought Ha`aretz would say it 20:40  |  Israel First 29/10/08
  50.   # 41 Esther - Vague claims as justification? 21:19  |  Natallie Durson 29/10/08
  51.   # 41 Esther - Apparently you prefer to forget the 2006 war 21:27  |  Natallie Durson 29/10/08
  52.   Natallie #50, 51 22:50  |  Esther 29/10/08
  53.   #51 nutullie as usual has extreme difficulty with fact 22:56  |  victor hardman 29/10/08
  54.   Natallie @50, 51 (continued), 23:20  |  Esther 29/10/08
  55.   cutting US aid to Israel 23:42  |  peacenik 29/10/08
  56.   Really out of touch peacnik? 01:30  |  Mark Lincoln 30/10/08
  57.   DURSON 02:18  |  joe 30/10/08
  58.   #31 Lady from USA 03:31  |  ccb 30/10/08
  59.   Natalie`s "contributions" 03:45  |  SDHD 30/10/08
  60.   Natalie Durson Is an Idiot 05:04  |  Moshe 30/10/08
  61.   Egypt`s Aid 05:25  |  SB 30/10/08
  62.   IRANS Input"Iran`s supreme leader: Hatred for U.S. runs deep" 05:29  |  PETER SM 30/10/08
  63.   Esther - Bias 06:15  |  Natallie Durson 30/10/08
  64.   #59 SDHD - the standard Israel tech lie 06:30  |  spyguy 30/10/08
  65.   US support wide but shallow 07:08  |  spyguy 30/10/08
  66.   First Call. 03:09  |  Jim 01/11/08
  67.   #63 Natalie Durson 03:50  |  Jim 01/11/08
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