US Offers Turkey Up to $8.5 Billion in Loans

WASHINGTON (Reuters)–Despite a rift with Ankara over American troop deploymen’s–US President George W. Bush’s war budget for Iraq includes funds to support up to $8.5 billion in direct loans or loan guarantees to Turkey.

In a surprise move–Bush offered $1 billion in economic gran’s to Turkey–which White House documen’s show could be used to secure the loans or loan guarantees.

"A portion of this ($1 billion in gran’s) may be used by Turkey to pay fees to cover the budget cost of up to $8.5 billion in direct loans or loan guarantees to help Turkey in carrying out comprehensive economic and financial reforms and relieving potential balance of paymen’s needs that may result from hostilities in Iraq," said a document released by the White House.

The administration dropped plans to provide $6 billion in direct aid and up to $24 billion in loans after the Turkish parliament on March 1 refused to allow 62,000 US troops into the country.

After a lengthy delay that upset US war planners–the Turkish parliament did authorize overflight for US warplanes attacking targets in northern Iraq.

The White House had no immediate comment on the Turkish aid–which could face opposition from lawmakers upset by Ankara’s stance on the troop deploymen’s.

"They (US officials) don’t want to see them (the Turks) go under," a senior congressional aide said of the funds.

The proposed loans could be made through Sept. 30–2005–subject to US congressional approval.

Turkey would incur all the costs associated with the loans or loan guarantees–documen’s show.

Bush has the discretion to suspend the loans if he determines any of the terms or conditions have been breached.

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