Israeli Finance Minister: We Shouldn't Put Off Signing U.S. Defense Aid Deal

Moshe Kahlon also says Israel must help the Palestinian economy in order to prevent a deterioration in the security situation. 'When the economy is good, they don’t shoot,' he says.

Finance Minister Moshe Kahlon, March 30, 2016.
Ofer Vaknin

Finance Minister Moshe Kahlon said Tuesday he thinks Israel ought to conclude negotiations over a defense aid deal with the U.S. as soon as possible and avoid postponing a decision. 

Speaking at a conference at Tel Aviv University, Kahlon acknowledged that even after Vice President Joe Biden's visit to Israel this month and Defense Minister Moshe Ya'alon's visit to Washington, differences between the sides have not yet been resolved.

He said that at the start of the week he had spoken with Ya'alon about the issue. "He told me it was going well. There is none of the hostility we read about in the media but there are arguments," Kahlon said.

Kahlon explained how the current defense agreement remains in force until 2018 and the new agreement will cover the aid the United States will provide Israel beginning in 2019.

"It's not like in an hour we will find ourselves without bullets for M-16s," he said.

Kahlon said his assessment was that there won't be many differences between the current and the next administration when it comes to aid to Israel.

"I don't think it's right to go into the politics of whether to do it during the Obama administration or the next administration," Kahlon said at the academic business conference.

"If it's possible to conclude it now then it's better to finish it now. An economy needs a horizon. It needs a multiyear plan. I would prefer to complete it now."

During his visit this month Biden pressed Prime Minister Benjamin Netanyahu to close the deal before the end of Obama's term, stressing that Israel will not obtain a better deal from the next U.S. president.

In 2007, Israel and the United States signed a deal committing Washington to provide $30 billion in aid over 10 years, or an average of $3 billion a year.

American and Israeli teams began negotiating the new aid deal intended to cover the next 10 years, through 2028, after Obama and Netanyahu met in Washington in November. 

A few weeks ago negotiations bogged down on the background of large gaps over the grant size the U .S. was proposing and the sum Israel said it needed. An Israeli official said the negotiations were stalled, and that the large gaps in positions were one of the main reasons Netanyahu cancelled his trip to the U.S. this month, despite having had a meeting scheduled with Obama.

The gaps between the Israeli and American positions were what made Netanyahu say at the cabinet meeting two months ago that if Israel's security needs were not met he would prefer to wait and pursue negotiations when the next president takes office in 2017, in hopes of achieving a better deal. Netanyahu's comments, published by Haaretz, caused great anger at the White House. In past weeks a list of senior Israeli figures have approached Netanyahu, among them the ambassador to Washington, Ron Dermer, to say that despite the gaps over the amount, Israel has an interest in signing the agreement while Obama is still in office.

At Wednesday's conference, Kahlon also spoke about relations with the Palestinians. He said Israel must help the Palestinian Authority financially to prevent any deterioration in the security situation. "My world view is that we need security and they know how to provide it," Kahlon said.

"The situation must be eased. I believe in economics. When the economy is good they don’t shoot. Perhaps I'm naive but that's my view."

Kahlon added that he is in touch with several Palestinian ministers for the sake of advancing economic issues. 

"In my small kingdom I do my utmost as long as I know that the money is going for education, teachers and welfare," Kahlon said.

"I have also been criticized for this. Recently I transferred 530 million shekels [$140.5 million] to them, which covers about a quarter of their debt."