Washington, April 1 -The United States today terminated the remaining $15 million in economic aid for Nicaragua because of that country's assistance to guerrillas in El Salvador, but held out the possibility of an early resumption of aid if the Nicaraguans continued their recent efforts to avoid involvement in the Salvadoran situation.
A statemnet issued by the State Department culminated a long policy review on what to do about aid to Nicaragua.
Under United States law, the Administration is required to cancel all aid if Nicaragua contributed to "violence" in another country.
Senator Jesse Helms, republican of North Carolina, who is chairman of the Foreign Relations subcommittee on Latin America, had pressed for the cutoff because of Cuban and other leftist connections in the Nicaraguan Government. Part of a $75 Million Program
The Administration, under the law, could also have demanded immediate repayment of the $60 million in loans already extended to Nicaragua under a $75 million program approved by Congress last year.
But the State Department announced that in order to retain influence in Nicaragua and to continue incentives for moderates there, the United States would not call in those loans.
Paradoxically, the decision to terminate the remaining $15 million in aid came as the State Department said that in the last few weels NIcaragua had virtually halted all flow of arms from its territory insurgents in El Salvador
The statement, read by William J. Dyess, a department spokesman said that the Reagan Administration had made "strong representations to the NIcaraguans to cease military support to the Salvadoran guerrillas. " Their response has been positive", he said. "We have no hard evidence of arms movements through Nicaragua during the past few weeks, and propaganda and some other support activities have been curtailed." Concern Voiced on "Other Support"
"We remain concerned, however, that some arms traffic may be continuing and that other support very probably continues,"he said.
State Department officials said that this "other support" included political and logistics help for the guerrillas, but Mr. Dyess refused to be more precise.
The Administration in February made public captured documents to demonstrate that the Salvadoran insurgents had received arms shipments from Vietnam, Cuba, and other Soviet-bloc countries by way of Nicaragua. The Carter Administration, shortly before it left office, suspended the $15 million pending a study.
The issue of whether the aid would be terminated had become a major problem because of a desire to help out the private sector and other moderates in Nicaragua and not push them closer to CUba. Important Interests at Stake Mr. Dyess said that "important United States security interests are at stake on the region."
"We want to encourage a continuation of recent favorable trends with regard to Nicarguan support for the Salvadoran guerrillas ," he declared.
"We also want to continue to assist moderate forces in Nicaragua which are resisting Marxist domination," he said. "working towards a democratic alternative, and keeping alive the private sector."
Mr. Dyess said the United States was considering a resumption of Food for Peace aid and additional development assistance in the future "if favorable trends continue there."
Source: New York Times
