International Information Programs
Office of Research Issue Focus Foreign Media Reaction

December 22, 2003

December 22, 2003





**  Easing Iraq's debt burden is critical to the success of reconstruction.

**  Working together on the debt issue offers an opportunity for U.S.-European "détente."

**  Baker's mission netted "encouraging" results but "vague" commitments.

**  The exclusion from reconstruction contracts still rankles in Paris, Berlin and Moscow.




Debt issue 'is as vital as security'--  Editorialists in Europe and Iran agreed that "the future of Iraq largely depends" on solving the problem of its "colossal" foreign debt.  "It is crucially important," commented Turkey's Islamist-intellectual Zaman, that the debt be "erased or restructured with a reasonable repayment plan."  A center-right German outlet added that the "degree of debt forgiveness" was less important than sending a "signal" to the Iraqis that their chances for a prosperous future would not be "diminished" by an "unnecessary debt burden."


An end to the 'big chill' between U.S. and Europe--  Analysts said debt-reduction talks offered an opportunity for "détente" between the U.S. and anti-war European countries.  French Foreign Minister de Villepin "rolled out the red carpet" for presidential envoy James Baker, whose tour traced a route of "rapprochement between three capitals," according to France's left-of-center Le Monde.  A "wily old fox of diplomacy," Baker was "just the right name for the job," in part because he is "sensitive to the interests of the 'old Europe.'"  Baker's expressed interest in "working together with France," coupled with the "conciliatory stance" of French President Chirac, shows the "desire to bury the differences" between the U.S. and the main opponents of the war.


'The ball is now with the Paris Club'--  By obtaining agreement in principle on debt relief from Paris and Berlin, Baker scored "an undeniable success" but skeptics highlighted the agreements' "vagueness," saying they gave no indication "how much of Iraq's debt" might be written off.  Writers pointed out that debt-relief would be negotiated "within the framework of the Paris Club."  Paris and Berlin also considered a "functioning government" in Baghdad to be a "precondition" for any debt-relief pact.  Germany's financial Handelsblatt concluded Berlin needn't give up "demands for repayment of the debt" because creditors will "have time to negotiate" with a future Iraqi government.  Russian papers also stated that Moscow "did not budge" from its position on debt relief and would "defend" Russian companies' "rights" in Iraq.


Euros await 'reconsideration' of ban on contracts--  Editorial boards in Europe still chafed at Washington's exclusion of companies in non-coalition countries from primary reconstruction contracts.  Many expected the U.S. to make a "corresponding move" to helpful European moves on debt.  U.S. "narrow-mindedness" on the stabilization process "is counteracting" its appeal for solidarity in financial matters, said Germany's left-of-center Sueddeutsche Zeitung.  Other German broadsheets pointedly stated that "Washington can hardly expect" anti-war countries to give up "billions of euros" without getting "satisfaction in return."

EDITOR:  Steven Wangsness


EDITOR'S NOTE:  This analysis is based on 28 reports from 9 countries, December 16-19, 2003.  Editorial excerpts from each country are listed from the most recent date. 




FRANCE:  "Waiting for France"


Yvan Rioufol commented in right-of-center Le Figaro (12/19):  "Those who opposed Bush on the war are applauding Saddam's arrest all the while giving advice about his trial.  They are the same who protected the tyrant by opposing Bush's strategy for Iraq's democratization through force.  Whether we like it or not, France, the land of human rights, did nothing to liberate Iraq from totalitarianism and from its dictator....  France's absence from increasingly becoming unjustifiable....  In agreeing to erase part of the Iraqi debt, France made a gesture towards the U.S.  If pride is keeping France from going further in its friendliness towards Bush, it can use the Iraqi interlocutors themselves....  But it would be unreasonable for France to believe that these Iraqis are going to put the Americans on trial."


"Washington, Paris, Berlin Agree To Reduce Iraqi Debt"


Babette Stern wrote in left-of-center Le Monde (Internet version, 12/18 ):  "James Baker's European tour traces a rapprochement between the three capitals.  The United States, France, and Germany reached agreement...on a reduction of the Iraqi debt....  Can we already speak of a 'Baker effect' on the behavior of European capitals on the subject of the Iraqi debt?  Should we credit George Bush senior's former secretary of state for thawing relations between Washington and the Paris-Berlin axis?  The presentation of a common any event shows a common desire to bury the differences between Washington and the two main opponents of the war in Iraq and to get down to the task of rebuilding the country, together....  Both parties have in fact reason to be pleased.  Mr. Baker's visit was the opportunity for France to kill three birds with one stone:  in stating that it was 'in agreement with finding the ways to reduce the Iraqi debt' made a gesture to the Iraqi delegation from the Interim Governing Council....  It forced the United States to indicate that it was not seeking to move away from the framework of the Paris Club....  Paris has not changed its line on the need to link processing of the debt to the Iraqi timetable....  For their part, the Americans can present the Berlin and Paris statements as the result of a successful diplomatic process....  The ball is now with the Paris Club....   The Americans want the discussions between the Paris Club proceed as quickly as possible, so that an agreement can be reached promptly after the installation of a legitimate government, scheduled for June 2004.  Even in this case, the burden will not be totally lifted.  Of the some $120 billion bilateral public debt owed by Baghdad, just $40 billion (including interest on overdue payments) concerns the Paris Club countries.  Of the rest, two-thirds is held by the Gulf states (including about 30 billion by Saudi Arabia) and one-third by the former socialist republics and by China.  If it proves impossible to induce these to follow the path traced by Washington, Paris, and Berlin, the efforts to reconstruct Iraq could be largely compromised.  James Baker's European tour...could just be the first lap."




Patrick Sabatier commented in left-of-center Liberation (12/17):  “The welcome that President Bush’s emissary, James Baker, received at the Elysee, as well as France’s declarations concerning the Iraqi debt prove that France has changed course on Iraq’s reconstruction.  All that’s needed now is for the U.S. to change the red light into a green light....  Chirac and de Villepin have signaled France’s desire to share in Iraq’s reconstruction by calling for unity in the international community.  The Americans want yesterday’s critics of the war to accept the fait accompli of Washington’s occupation of Iraq, while they also take out their checkbooks.  The French are hoping against hope that a quick transition is in the making in Iraq and that they will be able to forget about the principles that led them to reject the war.  In fact Bush and Chirac are condemned to getting along.  The former is in a position of strength, even if he needs more help to win the peace than he did to win the war.  The French know it would be stupid to hinder the implementation of a new regime in Iraq, even if it is very much dependent on the U.S.  This would go against France’s strategic interests.  Chaos in Iraq would only add to the region’s instability and serve Islamic terrorism.”


"Iraqi Debt Brings Paris And Washington Closer"


Georges Quioc wrote in right-of-center Le Figaro (12/17):  “James Baker’s European tour has begun with an undeniable success....  France’s gesture about the Iraqi debt is the first encouraging signal for the White House....  France hopes it will be able to play a lead role in the negotiations with its Paris Club partners....  The gesture, after Washington’s decision to exclude French companies from Iraqi reconstruction contracts, should also be welcomed by French companies...which are once again beginning to feel hopeful.”


"The Stakes Of The Iraqi Debt"


Yves Messarovitch observed in right-of-center Le Figaro (12/17):  “Will France’s conciliatory stance help to warm relations between Paris and Washington?  The start of an answer to the question could come from President Bush, if he were to reverse his administration’s position on Iraqi contracts....  President Bush’s position was firm last week, but it can still evolve.  In fact, a different stance would help...considering the weight of economic issues on relations between Europe and the U.S....  The steel issue has been resolved....  What remains is the issue of GMOs....  Last but not least, comes the war on the monetary front....  In short, the picture of economic relations between Europe and the U.S. needs a coat of fresh paint.  Settling the issue of the Iraqi debt could be a beginning, if Washington is willing.”


"Getting Along"


Dominique Bromberger remarked on government-run France Inter radio (12/16):  “For America and its allies...Saddam’s capture is an opportunity for a new beginning.  In Paris, Washington and Baghdad everyone seems to be ready.  President Bush, using a phrase used by FM de Villepin, said he was extending a hand to France and Germany....  France seems ready to erase part of Iraq’s debt....  America realizes that Iraq’s reconstruction will be way too costly if Iraq’s debt is not erased.  To this end it needs France, Germany and Russia.  When it comes right down to it, today, everyone needs to get along.”


GERMANY:  "No Surprise In Talks With Baker"


Jochen Clement commented on national radio station "Deutschlandfunk" of Cologne (12/18):  "The outcome of the talks with James Baker is no surprise...since the request for debt forgiveness must be negotiated in the Paris Club...not in talks with the honorable emissary James Baker.  He only formally negotiated about the agenda of the meeting of the Paris Club.  This means that a functioning Iraqi government is a precondition for reaching an agreement.  This will increase pressure to introduce a responsible government in Iraq as soon as possible to reduce the activity of the United States as a lawyer.  It is another side of the medal that one now hopes to get more reconstruction contracts for Iraq.  But in this respect, reality will change many plans.  By opening negotiations in the Paris Club, its members get an instrument to influence the domestic situation in Iraq in their sense--the awarding of contracts is a different construction site.  This time, The Europeans, including the Germans, used the modest means of influencing developments in Iraq."


"Signal For Iraq"


Center-right Frankfurter Allgemeine stated (12/18):  "The degree of debt forgiveness for Iraq negotiated in the Paris Club, will be of secondary importance.  What is important is the signal to the Iraqi people that its chances for a life in freedom and prosperity will not be diminished by an unnecessary debt burden.  The initial hesitance in Berlin and Paris is understandable in view of the differences of opinion with Washington on the war against Iraq and in view of the fact that the country has crude oil depots, which could help reconstruct the country.  The argument that debt forgiveness would damage the confidence of international investors and will prevent Iraq from getting access to international capital markets has been weak right from the onset.  After years of economic isolation...Iraq has no longer a creditworthiness that could be forfeited.  There is no doubt that it will take some time until the Iraqi government can think about placing international bonds.  The reconstruction billions from abroad may attract numerous investors, but will not suffice as a basis for a self-supporting economic recovery."


"Guilt And Debt"


Peter Muench noted in an editorial in center-left Sueddeutsche Zeitung of Munich (12/17):  "An internationally coordinated debt rescheduling process would be the right signal of international solidarity with Iraq.  This is why a corresponding move by the United States is not an unjustified demand.  But it was the U.S. government itself that added political fuel to the uncontroversial question of rebuilding Iraq....  The narrow-mindedness with which the U.S. occupiers close off the stabilization process to the outside is counteracting the appeal for international solidarity in financial matters.  With such an approach the debt forgiveness question is automatically linked to the question under which conditions one can help the U.S. president get out of his dilemma in Iraq.  It is no longer possible to separate these two problems any more....  In order to avoid this dispute being carried out on the backs of the Iraqis, there is only one way out:  a moratorium and the final discussion over debt restructuring later, once transparency prevails in the political process."




Business daily Handelsblatt of Duesseldorf (12/17) opined:  "With Saddam's capture it is time to end all the transatlantic disgruntlement.  Instead of warming up the emotions from the time of the war, the international community must wonder how it can turn Iraq into a stable member.  The settlement of the debt question offers a chance to do this....  U.S. envoy James Baker is now visiting exactly those countries that were opposed to the war to get support for President Bush's demand for forgiving Iraq's debt....  But there is no reason for Berlin & Co. to give up its demand for a repayment of debt.  The Paris Club implemented a moratorium until 2005 anyway.  This is why the creditors have enough time to negotiate with a future government Iraq's debt.  In order to set in motion such a process, the United States should avoid any impression of time pressure.  If it is serious about Iraq's reconstruction, it can quickly prove this by inviting all companies to apply for contracts even if their home is the old Europe."


"More Creative Solution Needed"


Center-right Hannoversche Allgemeine Zeitung (12/17) argued:  "There are no sound arguments that speak against forgiving Iraq's debt.  But the German chancellor has a domestic problem:  why should German taxpayers' accept such a move when they, at the same time, are required to accept cuts in their social welfare system?  The Paris Club of donor countries will have to find more creative solution than the previous unenthusiastic debt cancellation initiatives for poor countries, for instance, an installment plan that would allow Iraq to pay its debt according to its economic recovery.  If Germany does not insist on Iraq repaying its debt, it can demand to get contracts for rebuilding Iraq."




Center-right Nordsee-Zeitung of Bremerhaven opined (12/17):  "Washington can hardly expect the opponents of war to totally give up their demands for billions of euros without getting satisfaction for it in return.  President Bush has now obviously accepted this insight, even though he has not yet officially withdrawn the Pentagon decree.  The only thing he wants to promise right now is that he wants to settle the current differences of opinion.  But behind closed doors, his envoy Baker will certainly have used clearer words to induce his interlocutors to take a lenient attitude."


"Transatlantic Détente"


Right-of-center Badische Neueste Nachrichten of Karlsruhe argued (12/17):  "Détente is now necessary on both sides of the Atlantic.  George W. Bush praised the German engagement in Afghanistan and is willing to enter into a dialogue; Chancellor Schroeder and President Chirac are signaling concessions concerning Iraq's debt.  There is unanimity when it comes to looking to the future.  But Iraq freed from the yoke of horrible dictator Saddam Hussein needs a long-term perspective in order to create a stable situation in the war region, since, otherwise, the entire Arab peninsula remains a powder keg."


ITALY:  "Paris And Berlin, Accord On Iraqi Debt"


Massimo Nava had this to say in centrist, top-circulation Corriere della Sera (12/17):  "It would be fitting to say that business has got politics moving again, or, rather, that the diplomacy of business is often the best cure for political crises.  The reconstruction of Iraq, being a huge undertaking, and one which needs the collaboration of everyone, but which is also a multibillion-dollar pie from which nobody wants to be excluded, has finally put an end to the big chill between Paris and Washington, and is also bringing Berlin closer, as a result.  The issue over which the turning point has come about is Iraq's foreign debt, which France and Germany are prepared to cancel, in respect of that part of it which relates to them.  A wily old fox of diplomacy, James Baker, in his guise as the special envoy of Bush junior, as he had been that of Bush senior, has met up at the French presidential palace with one of the oldest foxes, Jacques Chirac, who did not pass up the opportunity to say that 'we seem to be entering a new chapter.'  Chirac was referring to the capture of Saddam, but he knew that this will speed up stability, and thus reconstruction....  Bush's envoy has, since the days of the Balkans (he was one of the last to surrender to the break-up of Yugoslavia), been sensitive to the interests of the 'old Europe'.  Baker and Chirac stressed the importance of 'working together on the reconstruction of Iraq,' and it seems clear that France, in the so-called 'field of peace', has acted as the trailblazer for a more relaxed approach."


"Reconstruction, U.S. Opens To Paris And Berlin"


Cesare Martinetti reported from Paris in centrist, influential La Stampa (12/17):  "The real new front of the Iraqi war is moving towards business matters.  And in this regard, the French aren't at all 'pacifists.'  The Quai d'Orsay engaged in a difficult diplomatic game and yesterday it got a first signal of détente from the Americans.  Following his meeting at the Elisée with Jacques Chirac, Bush's envoy James Baker recognized the importance of 'working together with France in the reconstruction of Iraq.'  What that really means isn't clear, yet....  However, the French view Baker's message as a means to initiate a rapprochement....  The game has begun and it will be a long one.  Baker's signal is important, but it shouldn't be overestimated because President Bush said loud and clear that U.S. taxpayers' money shouldn't go to those who have not offered their blood for the freedom of Iraq."


"Wolfie, Saddam And Now Baker Are Soothing France And Germany"


Elite, classical-liberal daily Il Foglio editorialized (12/17):  "In Paris, Baker himself, said that an agreement was reached aimed at reducing the Iraqi debts, if possible within 2004, considering the agenda drafted by the Paris Club; Chirac had no comment after their meeting.  It's not enough for Washington, because the nineteen countries of the Paris Club have thus far benefited only poor countries...and Iraq isn't potentially one of them....  The same protagonists of the new Iraq, the members of its provisional Governing Council, had requested an urgent intervention on debts....  The future of Iraq largely depends on the solution of this issue of Iraqi debt....  Baker's mission continues, he knows everyone and everything, and he is not one who would accept 'no' for an answer."


"Paris and Berlin, Debt Reduction For Baghdad"


Leading business daily Il Sole-24 Ore noted (12/17):  "Considering the situation before the talks, and, most of all, the recent U.S. decision to exclude French, German and Russian companies from the Iraqi reconstruction business, the result achieved yesterday by the White House envoy in Paris and Berlin was not minor.  No decision has been made, and probably it was not the occasion to make and announce decisions, but the three countries found themselves in agreement on the need to reduce Iraq's foreign debt....  The White House commented positively on the developments coming from European capitals, showing appreciation for the commitments made by Germany and France on the need to resolve the problem of Iraqi debts.  There is no doubt that Saddam Hussein's capture has created a more relaxed atmosphere for Baker's talks.... Yesterday's meeting in Berlin (Baker will be in Moscow today) marks, in any case, another important step in the march towards U.S.-German rapprochement.  The fact that, at least for one day, disputes were set aside shows a new willingness to cooperate."


RUSSIA:  "Russia Doesn't Budge"


Business-oriented Vedomosti commented (12/19):  "U.S. presidential envoy James Baker yesterday tried to talk Russian President Vladimir Putin and Deputy Prime Minister Aleksey Kudrin into writing off the Iraqi debt.  But Russia did not budge, sticking to its position, ready to discuss the matter within the framework of the Paris Club.  Baker got the same from his talks with European states."


"State Distances Itself From Baker Mission"


Reformist Izvestiya noted (12/19):  "There is a pall of secrecy over Baker's shuttle diplomacy.  The State Department, so it appears, is trying to distance itself from its former head's mission.   Baker, for his part, is not inclined to inform the State Department of his plans.  He has been entrusted with the most formidable weapon in trade, access to contracts to renovate Iraq....  Russia intends to defend its companies' rights in Iraq.  How far it will go is anybody's guess."


"The U.S. Won't Let Iraq Strengthen Iran"


Andrey Zlobin concluded in reformist Vremya Novostey (12/19):  "America wants to neither strengthen pro-Iranian forces in Iraq nor fuel the Iranian economy as part of the notorious axis of evil.  While the leader of the Provisional Governing Council promises to pay Iran $100 billion in war damages, the Americans are out to persuade Europe to write off the $120 billion Iraqi debt.  Washington won't let Baghdad funnel that money into the coffers of the Tehran ayatollahs."


"Early Results Encouraging"


Boris Volkhonsky noted in business-oriented Kommersant (12/18):  "The beginning of the Baker mission has proved quite encouraging to Washington.  Earlier the week he met with French President Jacques Chirac and German Chancellor Gerhard Schroeder.  As a result, the United States, France and Germany have agreed to ease Iraq's debt burden substantially.  So far, Russia (Iraq's largest creditor after Japan in the Paris Club) has been in no hurry to join any of the meaningful decisions on debt reduction.  But then, what has been decided by the United States, France and Germany is formulated in general terms and contains nothing on the size of the reduction and the way contracts to restore the Iraqi economy will be distributed."


"No Problem Expected In Moscow"


Andrey Terekhov opined in centrist Nezavisimaya Gazeta (12/18):  "Baker is off to a great start.  It doesn't look like persuading Moscow will be much of a problem, either.  Talks with President Vladimir Putin are going to be crucial.  As admitted in diplomatic circles here, Moscow is going to have to make concessions.  The question is how much of the $8 billion Iraq owes Russia the latter is going to 'forgive' it....  Without Baghdad's creditors in the Arab world making serious concessions, the Paris Club won't be able to settle the debt issue completely.  Western analysts agree that the accord Baker reached with Chirac and Schroeder will go a long way fostering the Iraq war-shattered transatlantic relations.  Writing off the Iraqi debt, observers believe, is one of the best ways for Berlin and Paris to show support for the Americans in stabilizing Iraq."


"Paris Speaks Of Double Standards"


Nikolai Paklin filed from Paris for official government Rossiyskaya Gazeta (12/18):  "Paris makes no secret of the United States applying a lot of pressure.  James Baker's argument in support of the demand put forward by his president is that the cost of Iraq reconstruction may prove too much for the United States.  The World Bank will offer no assistance unless creditor-countries write off the Iraqi debt (that the Americans dominate the Bank is common knowledge).  The U.S. initiative has had less than a cool response in France.   The French speak of double standards.   Recently the White House decided to bar French, German and Russian companies from contracts to rebuild Iraq.  Washington is trying to keep Iraqi oil off limits to countries that have invested a lot of money in that industry.  Chirac's consent to give up at least part of the Iraqi debt, not in the least measure, is because he hopes that the United States may reconsider its attitude toward French companies.  As for Baker's upcoming visit to Moscow, the Western media refer to Russia's position of principle that poor countries may have their debts written off.  But Iraq, which ranks second among the world's oil-rich countries, is not among them."


AUSTRIA:  "The Carrot And The Stick"


German correspondent Alexandra Föderl-Schmid commented in liberal daily Der Standard (12/18):  “For the U.S., canceling Iraq’s debts would be helpful.  Until now, the Americans and the British had to carry the financial burden of Iraq on their own.  The foreign debt of the country, estimated by the International Monetary Fund to be about 120 billion U.S. dollars, is a significant hindrance for the recovery of Iraq’s damaged national economy.  The problem is that Iraq owes the largest share of its debt to countries that were against the war.  Before James Baker, former secretary of state, traveled to Europe, U.S. President George Bush signaled that it would be beneficial for mutual relations if the anti-war camp showed a willingness to compromise on the tricky debt issue.  At the same time, it turned out that the war opponents were to be virtually excluded from the reconstruction process.  Especially in Germany, Bush’s carrot-and-stick approach seemed to work....  However, it would have been only fair if the  U.S. had rewarded this willingness to lose billions with some level of participation in the reconstruction process.  Despite the positive answers from France and Germany in the debt issue, it looks as if Washington is going to remain stubborn in the question of reconstruction.  Berlin and Paris should probably have made Bush pay for their aid to Iraq.”


BULGARIA:  "Problems In Iraq Start Rather Than Stop After Saddam"


Svetoslav Terziev observed in center-left Sega (12/18):  "Bulgaria, which usually suffers as a result of the disputes between Europe and the United States because they shake up the fundament on which its Euro-Atlantic strategy rests, could end up in the awkward situation of having to engage in diplomatic maneuvering in an attempt not to offend anybody....  France, the main opponent of the United States, suddenly decided to make a goodwill gesture toward Washington shortly after Saddam's capture.  Paris announced that it was willing to negotiate on writing off Iraq's debt.  If the big players reach an agreement, we would lose all hope of getting back our $1.7 billion from Iraq.  Our diplomacy's cunning trick of siding with the Americans, but keeping our fingers crossed for France to remain obstinate on the debt issue is about to place Foreign Minister Solomon Pasi in a very uncomfortable situation, as he was the one to persuade us that we would be guaranteed to get our money back only if Saddam was toppled.  No one could possibly commiserate with Bulgaria.  The amount Iraq owes us is equal to 12.5 percent of Bulgaria's GDP.  On the other hand, it would not be difficult for France to write off Iraq's debt to Paris of $3 billion, because this amount is only equal to 0.2 percent of its GDP."


IRELAND:  "France And U.S. Agree To Try To Cut Iraq's Foreign Debt"


Lara Marlowe observed in the center-left Irish Times (12/17):  "Mr. Baker's visit had appeared doomed by the Pentagon's announcement...that none of the countries which opposed the Iraq war could bid on $18.6 billion of reconstruction contracts in Iraq.  But prospects improved with the capture of Saddam Hussein, and the effusive messages of joy and congratulations sent by French, German and Russian leaders.  Prior to Mr. Baker's arrival, the French foreign minister rolled out the red carpet...saying that an agreement on debt reduction was possible within the framework of the Paris Club next year....  The Bush administration is eager to restore a viable Iraqi economy in advance of the November 2004 U.S. presidential election....  The Franco-American agreement in principle masks the vagueness of both countries' commitment.  Neither Paris nor Washington...have given any indication of how much of Iraq's debt they would be willing to write off."


TURKEY:  "James Baker Makes A Difference"


Fikret Ertan noted in the Islamist-intellectual Zaman (12/18):  "In the effort to rebuild Iraq, it is crucially important that Iraq's colossal foreign debt is either erased or restructured with a reasonable repayment plan.  This issue is as vital as the security and stability of Iraq.  Failure to find a settlement to the debt issue will mean that Iraq will suffer from lack of investment and will not be able to attract foreign capital.  In the end, these factors would lead to more serious problems with security and stability....  Thus the Bush administration's recent decision to appoint James Baker to deal with Iraq's debts is not only a very important step but also very appropriate.  Baker, who is just the right name for this job, has already made progress by reaching consensus with French and German leaders for the elimination of some Iraqi debt....  It is also expected that Baker will exert his personal charisma in talks with the Russians and will eventually convince Moscow, which has so far been cool to the debt reduction argument."




IRAN:  "Iraqi Debt And The West's Burden"


Tehran's pro-Khatami English-language, Iran News commented (Internet version, 12/18):  "Former U.S. Secretary of State James Baker is currently on a whirlwind trip of European capitals as George W. Bush's special envoy for restructuring Iraqi debt....  It goes without saying that most of these European countries were vehemently against the war....  Baker's trip is interesting and should be analyzed from a number of different angles.  First, the Americans may be trying to mend fences and patch up differences with Europe....  The Bush administration has recalled one of the 'grownups' in the Republican party, with whom the Europeans can get along instead of the 'annoying' and highly ideological neo-conservatives that Europeans such as Chirac and Schroeder can't stand.  Mr. Baker is an able and tactful politician who has been around the block for decades....  With the dramatic arrest of Saddam Hussein, the entire dynamics of postwar Iraq have changed in every imaginable aspect including on possible reduction and forgiving the country's massive debt....  Before his capture, the chances of success for Baker's trip were uncertain at best but now circumstances have dramatically turned around.  Already Germany and France have indicated that they will work with the U.S. and Iraq toward debt restructuring.... 


"Iraq owes an incredible 120bn dollars in international debt accumulated during the reckless and tyrannical era of Saddam.  However, the fact is it would be incorrect to blame just one person for the debt even though the megalomaniacal former dictator of Iraq deserves all the blame one can lay on him.  Careful examination of this enormous debt is needed.  That portion of the debt that was in any way military and armament related should be forgiven by those countries that provided the cruel Baathists with the arms and technology in the first place.  Some of these countries are currently being visited by Baker.  They must share in the blame because Saddam couldn't gas the Kurds and the Iranians nor be able to invade both Kuwait and our homeland if it wasn't for some of these Western powers in the first place.  One last issue is that the new Iraqi Governing Council (IGC) could have exercised a clause in international law allowing a new government to wash its hands off the commitments, accords, contracts and debts accrued by the previous one if the change in government was cataclysmic in nature such as war, revolution, etc. ...  The reason the IGC did not embark on such a radical action wasn't because they felt generous or altruistic but because Iraqis realized that if they are to have a brighter future after the Baathists and their country is to undergo reconstruction and experience some semblance of normality, safety, security and stability they need all the help they can get including those Europeans to whom Iraq owes tens of billions of dollars."


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