WASHINGTON D.C. - U.S. administration sent a letter to U.S. Congress on Tuesday and noted that it was ready to provide Turkey with 8.5 billion U.S. dollars in loans.
In a letter to key congressional committees, the U.S. State Department said that the Bush administration decided to go forward with the loans ''to support Turkey's economic reform process and to cushion the shock of the war in Iraq.''
The loans will be disbursed in trenches over an 18-month period, the first of which could take place until September 20. The funds will be used to service Turkey's external and domestic debts.
U.S. President George W. Bush had asked the U.S. Congress to provide 1 billion dollars of donation or 8.5 billion dollars of loan to Turkey while asking for an additional budget from the U.S. Congress for Iraq. The U.S. Congress had accepted that demand, but noted that Turkey had to make cooperation with the U.S. in Iraq and pursue strong economic policies to get the loan. The final decision about that issue was left to U.S. Secretary of State Colin Powell. U.S. State Department's sending a letter to Congress means that the State Department was convinced that Turkey fulfilled the necessary conditions.
Turkey and the U.S. are expected to sign the official agreement on U.S. administration's providing 8.5 billion U.S. dollars in loans to Turkey following the end of legal waiting period which is 15 days if no objections come.
American officials who gave information to A.A said on Tuesday that the letter sent by U.S. State Department to U.S. Congress officials was dated September 5. The 15-day legal waiting period in U.S. Congress in such issues will end on September 20.
No objections came from the U.S. Congress since Sept. 5 and American officials said that there was no sign that U.S. Congress members would raise any objections to the loan.
U.S. State Department said in its letter sent to U.S. Congress that the ''U.S. attaches significant importance to a strong, economically stable, and democratic Turkey as a hopeful model for the Islamic world. Such a model is particularly valuable following regime change in Iraq.''
The American loan which will be disbursed in tranches will be used to service Turkey's external and domestic debts, ''giving priority, where possible, to debt owed to the United States and to international financial institutions,'' the letter said. The U.S. State Department noted in its letter that ''easing debt servicing requirements is critical to Turkey's return to stable economic growth, as well as demonstrating U.S. support to a valued ally.''
The first payment can take place after September 20. But ahead of each disbursement, it must be confirmed that Turkey cooperated with U.S. forces in Iraq and it fulfilled its obligations under the economic programme with the International Monetary Fund.
In the letter, the State Department said Ankara was ''presently on track with its IMF-supported economic program.''
Pointing out that Turkey made cooperation in Iraq to date, the U.S. State Department said in the letter that Turkey had valuable assistance in Iraq.
''Another economic crisis in Turkey would damage U.S. interests in the region, especially as efforts to stabilize Iraq are under way. U.S. assistance, conditioned on Turkey's continued adherence to its IMF-backed economic reform program, will help maintain market confidence in Turkey and aid the country's economic recovery,'' the letter said.
International finance sources said that long term and low-interest American loan would comfort Turkey in case of borrowing, it would increase market confidence and help in decrease of interest rates.
The 8.5 billion U.S. dollars of loan has a four-year grace period on principal repayments and a 10-year maturity.
(Öª) 09.09.2003