EU admits EUR 200 million aid for Iraq is ‘not much’

Date: 11/09/03

By Dana Spinant

THE European Union is ready to pay up to EUR 200 million towards the reconstruction of Iraq over the next year, European Commission sources have told European Voice.

They admit that the sum, which could turn out to be as low as EUR 130m, "is not much". US president George W. Bush estimated this week it could cost $75 billion (EUR 67bn) to rebuild Iraq's infrastructure, ravaged by decades of neglect and war.

But the Brussels officials fear Iraqis may end up seeing none of the EU money at all.

The organizations through which it would be channelled, principally the UN and major NGOs, have decamped to neighbouring Jordan since the attack on UN headquarters in the Iraqi capital.

"The security situation continues to be extremely difficult in Baghdad," Bernard Savage, the Commission's representative in Iraq, told this paper. "Small NGOs are still there, but big NGOs have withdrawn and the UN has only kept a skeleton staff."

Savage, who moved to the Commission's delegation in Amman after the 19 August attack, said the EU is ready to join in the reconstruction - but only through multilateral channels such as the United Nations Trust Fund for Iraq.

If the UN is unable to use the money, he believes that the EU would block it being disbursed through the Iraq Development Fund, which is run by the US-led Coalition Provisional Authority (CPA).

"The question of passing through the CPA is political, not technical. Our principle is to work with the UN and NGOs. I think that sending money to Iraq through the coalition is not an option," he added.

An official in the Commission's external relations directorate (Relex) admitted that the level of funding that the EU is ready to pledge was relatively small, given the huge task involved. He acknowledged that sending only such a small fraction of the money needed for reconstruction would be seen as a political message. "After all, this is a war that many member states did not in addition to simmering opposition to the post-war occupation, there was a risk of civil and religious war in Iraq.

But he said the US had shown little sign of being prepared to change its strategy.

Another Commission official working on Iraq said: "If the coalition doesn't change its policy, something bad may happen. Iraqis are not happy to be under occupation."

European Commission sources have suggested that the EU is prepared to spend between €130 million and €200 million to help fund the reconstruction of Iraq.