Tony Fratto, Treasury department spokesman said that the House of Representatives Committee on Appropriations decided to use USD 1bn, which had been initially allocated as a grant to Turkey, for another goal.
Fratto noted that this was an indication of the significant improvement in Turkish economy in the past few years. The Committee on Appropriations noted that it was obvious that Turkey would not take the grant, which was convertible to USD 8.5bn loan.
The agreement regarding the grant between Turkey and the US was signed in September 2003, and the US aimed to meet the economic losses of Turkey from Iraq war with the loan. However, Turkey has been unwilling to use the loan due to some political conditions attached to the usage of grant.
The US conditioned the use of loan to Turkey's not intervening to Northern Iraq unilaterally. The statement by the Turkish Treasury noted that Turkish officials stated in their meetings with the US representatives that they would not need the grant, and the usage of the funds was not foreseen in 2005- 2007 stand-by programme designed with the IMF.