Europe May Donate To Iraq Fund -- As Long As Bush Can't Touch Money

by Stefania Bianchi

In spite of the ongoing dispute with the U.S. over the war in Iraq, the EU is tentatively offering to help pay for the reconstruction of the country, provided that the funds are administered independently.

This is a further indication that the two powers are making moves to mend transatlantic relations and also demonstrates the EU's urge to prove its influence with the U.S.

Patten met Secretary of State Colin Powell in Washington July 15 to discuss the worsening military and humanitarian situation in Iraq.

Patten told Powell that Europe was willing to establish a trust fund for Iraq, on the condition that it would be administered by the World Bank with the help of the United Nations Development Program (UNDP), which countries in need to attract and use aid effectively.

The EU Commissioner believes that setting up the fund would help to convince Europeans of the need to "make financial sacrifices for a conflict which many people thought was unnecessary"

Last month Patten announced that the European Commission, the executive arm of the EU, would provide more than 100 million euros ($90 million) for reconstruction of the war-torn country. The commission has also pledged more than 700 million euros in humanitarian aid through its humanitarian aid office ECHO.

Speaking of the transatlantic rift over the war and divisions within Europe, Patten acknowledged that some resentment remained but called for "a generosity of spirit on all sides."

"We simply have to put things behind us," he said.

He urged the U.S. to make its peace with Germany and France, whose cooperation he said could help ease the deteriorating military situation in Iraq. He insisted that tension between the EU and the U.S. was easing.

"The trick now is to find a mechanism for cooperation that is acceptable to all sides. People have to be made to feel welcome. There are those in Europe who say, "Why should we be obliged to pick up the pieces?' It's a political issue we have to be able to counter," he said.

Patten's pledge marks a further step in mending strained EU-U.S. relations and the European Union's determination to show itself as a comparable power to its transatlantic partner. Earlier this month, in a bid to mend relations, the EU passed two laws that could lead to member states dropping their ban on genetically modified (GM) foods.

The EU hopes that by lifting its moratorium on GM goods, tensions between the two blocs will be eased, as the U.S. has been hoping for the past five years that the EU will lift the moratorium.

In June, top EU officials met President Bush for an EU-U.S. summit in Washington, aimed at improving relations between the two groups.

Then the EU rejected calls from President Bush to outlaw the political wing of the Palestinian militant group Hamas.

The Bush administration has welcomed the European offer of assistance in Iraq.

Richard Boucher, the State Department spokesman, told reporters in New York: "We're working very closely with them. We'll work out the appropriate structures in future discussions."

The mounting cost of the U.S. occupation, in lives and money, has put pressure on the Bush administration to seek more international help, military and financial, in Iraq.

Patten said he would need to persuade the 15 member states of the EU, as well as the EU institutions, to provide money to rebuild after a war most of them opposed, but insisted that the task would be easier if the funding was monitored independently.

"None of this should be a problem for the administration, because they presumably want to maximize international involvement," he said.

On July 15 a report in the French daily 'Le Figaro' said that President Jacques Chirac had declared that a French military intervention in Iraq could not be conceived within the current framework, making it clear that Paris would turn down any involvement in Iraq unless the UN was giving the process a clear mandate.

Patten warned the Bush administration that Germany, the largest economy in Europe, though in recession, and a strong opponent of the war, could not be ignored. He told Powell that politics was such that donors did not want their money "paying for contracts for Halliburton," the U.S. oil industry services company formerly run by Vice President Dick Cheney.

Germany is also keen to bridge the gap over the U.S.-led war.

German Foreign Minister Joschka Fischer also travelled to the U.S. this week for a four-day fence-mending mission. This is his first visit there since the bitter divide over the Iraq war.

On Wednesday he told U.S. reporters that a strong trans-Atlantic bond was key to building stability.

"The United States is the most important ally for us outside Europe and for all other European countries it is the same fact," he said.

Although Fischer has not yet made any offer to cooperate in Iraq, the German government is currently evaluating possibilities for international cooperation in the reconstruction process there.