MFA RAISES PROBLEM WITH U.S. FINANCIAL AGREEMENT'S

C O N F I D E N T I A L ANKARA 006420 SIPDIS STATE FOR E, EUR/SE, AND EB/IFD TREASURY FOR OASIA - MMILLS AND JLEICHTER NSC FOR BRYZA AND MCKIBBEN E.O. 12958: DECL: 10/13/2008 TAGS: EFIN EAID PREL TU SUBJECT: MFA RAISES PROBLEM WITH U.S. FINANCIAL AGREEMENT'S UNILATERAL DEPLOYMENT BAN Classified by Ambassador Eric Edelman for reasons 1.5 (b) and (d). ¶1. (U) This is an action request. See paragraph 4. ¶2. (C) At the end of a meeting on other issues (reported septel) with the Ambassador October 14, MFA U/S Ziyal said the GOT has a serious problem with the U.S. Financial Agreement (FA). "We may not be able to finalize it," he said, specifying that "finalizing" meant taking it either to the Council of Ministers or to Parliament. Note: Turkish Treasury staff had earlier assured Emboffs that the FA would only go to the Council of Ministers and not to Parliament. End note. The problem, according to Ziyal, was the language on Turkish troops not unilaterally entering Iraq. He stressed that Turkey had no intention of making such an intervention, but did face a serious political problem because of the language on conditionality, a problem that he would like to avoid. ¶3. (C) The Ambassador said Washington had felt it important that language in the agreement conform to the legislation, and that we had done everything possible in our public statements to stress that we were not imposing new conditions and making clear that the language in the legislation/agreement was based on concerns from early in the year that no longer pertained. He said Turkey always had the option not to take the money -- "we're not trying to force $1 billion of U.S. taxpayer money upon you." Ziyal asked if we could amend the language in the agreement. The Ambassador said he could not be very optimistic, but we would ask Washington. In a one-on-one at the end of the meeting, Ziyal told the Ambassador that President Sezer would refuse to sign the agreement unless the language on conditionality was removed. ¶4. (C) Action request: Post realizes changing the agreement is extremely problematic. Ambassador told Ziyal that, of course, Turkey did not need to draw on the money as they have said repeatedly that they had not planned on the loan, but we wonder about a side letter that might give GOT some political comfort without changing the actual agreement. Post requests Washington consideration of the issue and guidance in responding to the GOT. ¶5. (U) Baghdad minimize considered. EDELMAN