MFA U/S ZIYAL REQUESTS REVISION OF FINANCIAL

C O N F I D E N T I A L ANKARA 007096

SIPDIS


STATE FOR E, EB, EUR/SE, AND NEA/NGA
TREASURY FOR OASIA - JLEICHTER AND MMILLS
NSC FOR TMCKIBBER AND MBRYZA


E.O. 12958: DECL: 11/13/2008
TAGS: EFIN PREL IZ TU
SUBJECT: MFA U/S ZIYAL REQUESTS REVISION OF FINANCIAL
AGREEMENT


REF: A. ANKARA 6886

B. STATE 295374

C. ANKARA 6574



1. (U) Classified by Ambassador Eric Edelman for reasons 1.5
(B) and (D).



2. (C) At a November 13 meeting, MFA Undersecretary Ugur
Ziyal told the Ambassador that the political conditionality
in Article 5(A)(ii) - the Iraq-related conditionality - of
the USD 8.5 billion Financial Agreement continues to be a
serious problem for the GOT and could have a negative bearing
on the bilateral relationship. According to Ziyal, the Prime
Minister does not want to go down in history as the first
Turkish PM to sign an economic agreement with political
conditions. Ziyal predicted that the PM would not pursue the
FA further in its current form.



3. (C) Noting that the PM had raised this issue in his recent
telephone conversation with the Vice President, Ziyal asked
that FA Article 5(A)(ii) be revised to eliminate explicit
political conditionality. He suggested that the FA could
instead more generally refer to conditions "as provided in
the (U.S.) legislation". The Ambassador told Ziyal that he
doubted that we could revise the language in the FA, but that
we would check this with Washington agencies. Ziyal agreed
that if the text could not be revised, it might be worthwhile
to consider a side letter, although it would have to be
drafted in a way that it could be made available to the
Parliament or public.



4. (C) Ziyal told the Ambassador that GOT legal experts had
determined the FA would have to be approved by Parliament.
He opined that President Sezer would not block the FA if
approved by Parliament.



5. (SBU) Action Request: Request Washington agencies provide
guidance for use in responding to Ziyal's request.
EDELMAN