Saturday, March 01, 2003

You've got to be kidding me

I was wondering where Bush was going to come up with his magic instant billions for Turkey. Here it is:



WASHINGTON, Feb 27 (Reuters) - U.S. President George W. Bush may dip into a Depression-era emergency fund for a short-term loan to Turkey as he presses for access to Turkish bases for a possible attack on Iraq administration and congressional sources say.

The $38 billion Exchange Stabilization Fund was used in 1995 by former President Bill Clinton to bail out Mexico over objections from many Republicans.

Bush used the fund to help Uruguay last year and, with an Iraq war potentially just weeks away, is considering tapping into it again -- to provide what s ources say would be about an $8.5 billion bridge loan to NATO ally Turkey.

The administration wants Turkey's permission to use its bases to attack Iraq from the north. In return, Turkey is demanding an aid package worth up to $30 billion in U.S. grants and loan guarantees to help cushion its frail economy
from the impact of a war.

As a down payment on the aid package, which is subject to congressional approval, Turkey wants a bridge loan, which would be repaid once Congress acts.

"They want it right away," a U.S. official said of Turkey's request for a bridge loan.

If Washington is to meet Turkey's demand, administration and congressional sources say the White House has little choice but to tap into the fund. Unlike other forms of bilateral aid, which must be approved by Congress, the
multibillion-dollar fund falls wholly within the jurisdiction of the Treasury secretary, subject only to presidential approval.
....

Set up in 1934, the fund was intended primarily for emergency use to defend the dollar.

The fund returned to the public eye in 1995 when the Clinton administration, faced with congressional opposition to a taxpayer-financed bailout for Mexico, said it would use the fund's resources. That fueled criticism from
Republicans about whether that was an appropriate use for the money.

The United States made up to $20 billion available to Mexico, most of it from the fund, although not all the cash was used. The money was paid back with interest and the United States even made a profit on the deal.

Clinton tapped the fund again in the financial crisis that hit Asia in the late 1990s, again drawing Republican fire.

Despite a pledge not to follow the Clinton administration's lead, Bush in August 2002 provided a $1.5 billion bridge loan to struggling Uruguay.