Show 'em the money!

[Dreamer128]

EU's Iraq Aid 'Realistic' Despite Strains Over War
Wed October 22, 2003 03:58 PM ET
By John Chalmers
MADRID (Reuters) - Before the Iraq war Chris Patten warned Washington that without U.N. backing for its action, European nations were likely to adopt the principle of the sign in a china shop: "If you broke it, you own it."

And yet the European Union's commissioner for external relations is heading for a meeting of world donors in Madrid on Thursday and Friday with more money for Iraq's postwar reconstruction than the bloc stumped up for Afghanistan.

"Whatever our past differences about military intervention...we all recognize that we have a shared interest in helping to build a prosperous, democratic, open and stable Iraq," Patten told Reuters in an interview on Wednesday.

Promises of aid from wealthy states are expected to fall far short of the $56 billion estimated to be needed over the next four years to reactivate the Iraqi economy, leaving Washington to foot most of the bill for postwar reconstruction alone.

The United States has promised $20 billion over 18 months.

The European Commission is offering 200 million euros ($235 million) for 2004, a figure it defended as "no drop in the ocean" after EU lawmakers grumbled it was too little.

That pledge does not include EU humanitarian aid and individual member nations' offers of reconstruction funding.

"I've made a rough calculation of the figures I know so far, and at this stage I think that the European Union and the Commission...will probably be pledging rather more in Iraq for the first year than we did in Afghanistan," said Patten, who was speaking by telephone as he boarded his plane to Madrid.

"If you add together the reconstruction assistance and the humanitarian assistance I think there will be well over 1.4 billion euros ($1.65 billion) on the table."

In 2002 the EU as a whole pledged reconstruction and humanitarian aid worth 850 million euros for Afghanistan.

SECURITY CRUCIAL

Patten brushed aside suggestions that bad blood over the war, which was bitterly opposed by France and Germany, had prompted some nations to send low-level delegations to Madrid or kept a lid on the EU's overall contribution.

"We've always counseled that it was important not to judge this conference against a huge dollar sign," he said, adding that Europe's pledge was "extremely realistic" given security risks on the ground and Iraq's capacity to absorb huge funds.

He said the violence which has gripped parts of Iraq since the toppling of Saddam Hussein had prevented the EU from using about one-third of its humanitarian aid, and reconstruction would stall if international agencies continue to be targeted.

Patten is determined, though, to get a first 40-million-euro tranche of the EU's pledge working as soon as possible for water and healthcare rehabilitation.

The World Bank has estimated that Iraq's battered economy and virtually non-existent administration would make it hard to spend more than $5.2 billion in aid next year, followed by $8 billion in 2005 and $8.4 billion in 2006.

The commissioner said Madrid would be an opportunity for donors, most of whom are making one-year pledges, to consider their approach for a longer-term strategy.

The Commission, he said, was prepared to come back next spring with proposals for further reconstruction assistance. "But first of all one does need to see how the security situation develops and you have to see...what the absorption capacity is in Iraq." ($1=.8507 Euro)


Source: http://reuters.com/newsArticle.jhtml...toryID=3669032