Joint Statement: U.S.-Israel Joint Economic Development Group Joint Statement

June 18, 2003

Following is the text of a joint U.S.-Israel statement released at the conclusion of the Joint Economic Development Group meeting of June 18, 2003:

On June 18, delegations of the United States and Israel held useful, in-depth discussions on Israel’s economic reform plan. The discussions, held in the context of the U.S.-Israel Joint Economic Development Group, were co-chaired by Ambassador Alan Larson, Under Secretary of State for Economic, Business, and Agricultural Affairs, and Mr. Ohad Marani, Director General of the Israeli Ministry of Finance. Israeli Finance Minister Benjamin Netanyahu made a presentation to the JEDG on the recently enacted economic reform program.

The U.S. and Israeli delegations noted that the future health of the Israeli economy depends upon Israel undertaking fundamental economic reforms and reducing Israeli budget deficits. The U.S. believes the recently enacted Israeli economic reform plan represents a bold step forward and delivers on undertakings made by the Israeli government. We look forward to further discussions on how we can work together to promote economic reform and long-term growth.

The United States and Israel had earlier agreed on the broad terms under which the U.S. will issue $9 billion in bond guarantees. These bond guarantees, to be issued once the formal loan guarantee agreement is finalized and signed by the parties, were authorized by legislation signed by President Bush on April 16, 2003. It is anticipated that, subject to the conclusion of the formal loan guarantee agreement, the first tranche of these loan guarantees can be made available. These guarantees are designed to promote sustained economic growth in Israel, will therefore be linked to successful implementation of elements of Israel’s own ambitious economic reform plan, and can make a contribution to it.

The governments of Israel and the United States agreed that issuance of U.S. guarantees will be tied to such pro-growth economic reforms, including deficit reduction, the accelerated tax rate reduction, and privatization, to be implemented by the Israeli government. The U.S. and Israel agreed to continue to review progress on economic policy reforms and deficit reduction goals through regular meetings of the Joint Economic Development Group.