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