The capture of Saddam Hussein could help US special envoy James Baker convince European leaders to forgive Iraq’s $120 billion foreign debt burden when he meets with Paris Club creditors this week.
In what appears to be a new openness toward Washington, European countries opposing the Iraqi occupation praised Saddam Hussein’s arrest. Baker leaves for France on Monday, December 15, 2003, to face the hard task of turning this praise into debt relief promises.
War effort opponents Germany, Russia and France were outraged by the announcement last week that they would be banned from $18.6 billion in US-funded rebuilding contracts for Iraq. Russia, Baghdad's biggest creditor at eight billion dollars, said that it had no intention of writing off the debts after learning of the US policy.
However, the reaction of European leaders to Saddam Hussein’s arrest showed signs of hope that Iraq’s financial obligations may be forgiven. Leaders from France, the war’s harshest critics, said they hoped the event would be a catalyst for world powers to unite over Iraq. “We have a chance to get out of this crisis and we must all seize it together,'' said French Foreign Minister Dominique de Villepin at a news briefing.
Some $40 billion of Iraq’s debt is owed to 19 members of the informal Paris Club creditor group. According to the World Bank, at least two thirds of Iraq’s debt must be cut for the Arab state to have a fair chance to rebuild. The nation’s current debt obligations are the equivalent of 10 times the country's normal gross domestic product (GDP). — (menareport.com)
© 2003 Mena Report (www.menareport.com)
