[R-G] US ratifies $30 billion FMF package for Israel

[Anthony Fenton]

  Jane's Defence Weekly  - August 29, 2007

US ratifies $30 billion FMF package for Israel

Alon Ben-David JDW Correspondent
    Tel-Aviv

The US and Israel have signed the memorandum of understanding that  
will provide Israel with USD30 billion Foreign Military Financing  
(FMF) package from 2009 to 2018.

The new agreement constitutes a boost of 25 per cent in US military  
aid to Israel - currently set at USD2.4 billion annually - at a time  
when the Israel Defence Force (IDF) undergoes an overhaul in  
preparation for another conflict.

The new package is meant to counter "an axis of co-operation between  
Iran, Syria, Hizbullah, Islamic Jihad and Hamas that is responsible  
for the violence in the region", said US Undersecretary of State  
Nicholas Burns at the signing ceremony on 16 August in Jerusalem.

"There is no question that, from an American point of view, the  
Middle East is a more dangerous region now even than it was 10 or 20  
years ago, and that Israel is facing a growing threat," said Burns  
referring to Iran and Syria. This threat "is immediate and it's also  
long term".

Burns added that the aid comes at a time when Iran "is resurgent" and  
is both seeking nuclear capabilities and expanding its conventional  
power in the region.

The increased FMF package to Israel is also meant to offset US  
intentions to sell USD20 billion worth of advanced weapons to Saudi  
Arabia and other Gulf states and USD13 billion to Egypt.

"We will continue to show the same support to our other allies in the  
region, like Egypt, Kuwait, Saudi Arabia and Bahrain," said Burns.  
Unlike previous occasions, Israel has, this time, raised no  
objections to the plans for potential sales of weapons to Arab  
countries, although the plans are facing growing resistance in US  
Congress.

Israeli officials have assessed that the rise in military aid to  
Israel could help the administration win Congressional approval for  
the arms sale to Saudi Arabia.

Israeli Prime Minister Ehud Olmert has said he understands the US  
need to bolster its Sunni allies in the region, who are also facing a  
threat from Shi'ite Iran and that the current aid to Israel would  
guarantee its qualitative advantage over its neighbours.

Following the signature of the new agreement, Israeli and US  
officials began discussing Israeli requests for maintaining its  
technological advantage in the region.

Israel is asking that weapons supplied to Saudi Arabia will have  
limited capabilities and that the US will condition the sale on  
restricting deployment of advanced weapons away from Israel's borders.

Under the new accord, the Israel FMF package will increase by USD150  
million in the next four years, to USD2.55 billion in October 2008  
(Fiscal Year 2009), USD2.7 billion in 2009 and 2.85 billion in 2010.

The annual FMF package will be set at USD3.1 billion in 2011 and will  
remain at that sum until 2017, totalling USD30 billion altogether.  
Out of that amount, Israel will be allowed to convert 26.3 per cent  
of the funds to acquisitions outside the US.

The new package sends a strong signal to Israel of US commitment to  
its security "beyond the presidency of President Bush and into the  
next presidency. That is a very important point for us", said Burns.

Israel was hoping to receive the increased aid as an annual fixed  
amount of USD3 billion, but will now have to adjust its

procurement plans to the new funding scheme.

The IDF General Staff is set to convene on 20 August to finalise its  
new five-year workplan, dubbed 'Teffen 2013', based on the new  
budget, now totalling ILS50.5 billion (USD12 billion) in 2008  
(including the increased FMF).

The IDF is expected to decide on its major procurements for the  
coming years, including hundreds of armoured personnel carriers for  
its ground forces, 100 F-35 Joint Strike Fighters for the Israel Air  
Force and possibly new surface vessels for the Israel Navy.