Kathleen Ridolfo
RFE/RL Iraq Report Vol. 6, No. 53
December 18, 2003

U.S. special envoy James Baker met with Iraqi officials including Iraqi Central Bank Governor Sinan Muhammad Rida al-Shibibi and Finance Minister Kamil al-Kaylani in Paris on Dec. 16 before a scheduled meeting with French President Jacques Chirac to discuss debt relief for Iraq, Reuters reported the same day.

Baker also traveled to Berlin on Dec. 16 to meet with German Chancellor Gerhard Schroeder and was also expected to meet with British, Italian, and Russian leaders during his European tour. Baker reportedly made progress in his Dec. 16 meetings with Chirac and Schroeder.

A joint statement issued by the two European leaders and U.S. President George W. Bush following the meetings in Paris and Berlin said, “Debt reduction is critical if the Iraqi people are to have any chance to build a free and prosperous Iraq,” Reuters reported on Dec. 17. “Therefore France, Germany, and the United States agree that there should be substantial debt reduction for Iraq in the Paris Club in 2004, and will work closely with each other and with other countries to achieve this objective.” According to AP, the statement noted, “The exact percentage of debt reduction that would constitute ‘substantial’ debt reduction is subject to future agreement between the parties.”

The International Monetary Fund estimates Iraq’s debt to be around $120 billion, some $40 billion of which is owed to the 19 member states of the Paris Club of creditor states, according to Reuters/ Iraq reportedly owes between $2 billion and $8 billion to Germany, $8 to 12 billion to Russia, and between $3 and $8 billion to France. German officials, while apparently accommodating on the issue of debt relief, reiterated their concerns that Washington has excluded German companies from bidding on prime reconstruction contracts in Iraq, AP reported. “Germany’s position on the awarding of reconstruction contracts in Iraq was clearly expressed in the talks,” with Baker, Schroeder’s spokesman Bela Anda said on Dec. 16.

Meanwhile, White House Spokesman Scott McClellan told reporters on Dec. 16 that the U.S. position remains unchanged. “I think we’ve made it very clear that when it comes to the U.S. taxpayer dollars that we believe that those tax dollars should be going to the countries that have been involved in helping to liberate the Iraqi people and help them build a free, peaceful, and prosperous future. And also [to] Iraq, as well. . . . As I said last week, and this position still stands, if additional countries want to join the efforts of some 60 countries and the Iraqi people in the overall reconstruction, then circumstances can change. We will discuss that with those countries. I’m not prepared to discuss that with those countries from this podium, though,” McClellan said.