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EU: Reconstruction Role In Iraq Remains Uncertain

The military situation in Iraq appears to be reaching a climax, with U.S.-led forces inside the capital Baghdad and Iraqi forces on the defensive everywhere. But when the fighting ends, the prospect of rebuilding Iraq's infrastructure -- damaged by war or by years of neglect -- will begin. That means business contracts for private companies worth billions of dollars. But who will benefit? Will the European Union countries that opposed the U.S.-led war be excluded?

Prague, 8 April 2003 (RFE/RL) -- The tensions that characterized relations between the United States and the European Union ahead of the Iraq war seem unlikely to dissipate in the period of postwar reconstruction.

This is largely due to differing perceptions on each side of the Atlantic about the role of the United Nations in postconflict Iraq.

U.S. Secretary of State Colin Powell says the United States, along with its coalition partner Britain, has borne the economic and political burden of the war. Therefore, he says, they should be the ones to guide Iraq through the probably lengthy interim period until elections produce a democratic Iraqi government.

Powell has said the UN should be involved in the postwar effort, but he has left its role undefined, and other U.S. officials have indicated the UN should be limited to humanitarian duties.

U.S. President George W. Bush today said the UN will play what he called "a vital role" in postwar Iraq. But Bush, speaking after talks with British Prime Minister Tony Blair in Northern Ireland, did not offer the UN a great deal more.

He said, "That means food, that means medicine, that means aid, that means a place where people can give their contributions, that means suggesting people for the IIA [Interim Iraqi Authority], that means being a party to the progress being made in Iraq."

This is in stark contrast to the vision of German Chancellor Gerhard Schroeder, who said the UN must have the dominant role. "The reconstruction process can, and may, be organized only under the umbrella of the United Nations," he said. "I don't see how the necessary legitimization can otherwise be secured."

Diego d'Ojeda, a spokesman for the European Commission, said EU members think alike on this question, despite their deep split in past weeks on the issue of whether to go to war against Iraq.

He said: "I see all European Union voices calling in the same direction, which is that we would like to have a very central role for the United Nations in the postconflict phase in Iraq that should as soon as possible give way to a fully fledged, independent Iraqi authority. Of course, no one knows when 'as soon as possible' will be."

Apart from being a political issue, the question of who will run Iraq involves billions of dollars in business contracts for the process of rebuilding. The rehabilitation of Iraq's damaged and dilapidated infrastructure, as envisaged by the United States, covers a full spectrum of projects, from road improvement to water-treatment plants to electricity-grid repairs.

Doubts have been raised on the EU side about whether it will contribute financially to the rebuilding effort if the UN is not in charge. And on the U.S. side there have been voices saying that those Europeans who opposed the war should not now be able to profit from it by having their companies gain rebuilding contracts. There is an amended draft bill to that effect making its way through the U.S. Congress.

EU Commission spokesman Diego d'Ojeda said Brussels is opposed to any move which would exclude any European companies from the bidding for contracts. "Of course we do not think it's a useful thing to go around blacklisting European countries in any context, including this one," he said. "But it has not yet happened; [there] is just an attempt [in the U.S. Congress] to do so, which we hope will not materialize."

D'Ojeda says the draft bill does not have the support of the Bush administration and will not likely see the light of day. But he said if it does materialize, Brussels will challenge it in international forums like the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD).

D'Ojeda also referred to the economic significance of who will be the most important actor in postconflict Iraq. "If we get the central role for the UN that we think is in the interests of everyone, there might be other funds going into reconstruction, including perhaps from the European Union, and of course all those funds will be dealt with according to normal [contract-awarding] procedures," he said.

Economic analyst Alisdair Murray, of the Centre for European Reform in London, said from the standpoint of the individual business managers hoping for contracts in Iraq, the overall picture is still confused and the signs "aren't great." "I think there is a huge amount of uncertainty about who, and exactly how, business will be playing a role in reconstruction," Murray said.

The uncertainty over the role of EU countries in postwar Iraq is, at any rate, not affecting the supply of immediate EU humanitarian aid to Iraq, which arrives mainly in the form of health and sanitation supplies.

A spokesman on aid matters for the European Commission, Michael Curtis, said the EU has "already committed 21 million euros and we have asked the [EU] budgetary authority to make available an extra 79 million euros, so our initial humanitarian effort will be for 100 million euros."

With the fighting in Baghdad apparently nearing an end, the reality of governing postwar Iraq is coming closer. The United States is going ahead with plans for military control in the immediate postwar period, followed by an Iraqi Interim Authority with Americans in top advisory positions. That would set the scene for eventual elections and the birth of a new democratic Iraq.