'Iraq is not a poor country'

2003-12-12 10:12

Brussels, Belgium - Europe's foreign affairs chief on Thursday called the US decision to bar opponents of the war in Iraq from reconstruction contracts "gratuitous and unhelpful" when unity is needed.

But the White House said the ban was not up for reconsideration.

"This is a gratuitous and extremely unhelpful decision at a time when there is a general recognition of the need for the international community to work together for stability and reconstruction in Iraq," Chris Patten, the European Union's commissioner for international relations, said.

The US decision could complicate American efforts to restructure Iraq's estimated $125bn debt, largely owed to France, Germany and Russia, excluded from contracts under the Pentagon directive.

'Iraq is not a poor country'

"Iraq's debt to the Russia Federation comes to $8bn and as far as the Russian government's position on this, it is not planning any kind of a write-off of that debt," Defence Minister Sergei Ivanov told reporters. "Iraq is not a poor country," he said.

But Germany said there was "no direct link" between debt relief and the US exclusion of German companies from reconstruction contracts.

"The stabilisation of Iraq is also in Germany's strategic interest," Bela Anda, speaking for German Chancellor Gerhard Schroeder.

The countries were angered by Washington's new policy shutting them out of bidding for $18.6bn in Iraqi reconstruction projects because they opposed the war.

The White House says countries wanting a share of the $18.6bn in reconstruction contracts in the 2004 US budget must participate militarily in the post-war effort.

Circumstances can change

"If additional countries want to participate with our efforts in Iraq, then circumstances can change," said White House spokesperson Scott McClellan.

Paul Martin, who becomes Canada's prime minister on Friday, said the Pentagon decision was "really very difficult to fathom" and that he would raise the issue with US officials.

In Moscow, Deputy Foreign Minister Yuri Fedotov said the directive "will hardly foster the mobilisation of the international community" to rebuild Iraq, "more likely the opposite," according to the ITAR-Tass news agency.

In Brussels, Arancha Gonzalez, trade spokesperson at the European Commission, said the EU was asking the United States "to provide us with information so we can see whether or not their commitments" under the World Trade Organisation "have been respected".

The Pentagon directive said restricting contract bids was necessary to protect essential security interests. WTO rules allow for exemptions based on national security.

"We suspect that in substance it contradicts the principles for international tenders for public projects, although the United States in particular always calls for observing these principles," said Ludolf von Wartenberg, general manager of the Federation of German Industry.

- AP