Chris Patten	Michaele Schreyer

No. 60/03
October 1, 2003

EU COMMISSION PROPOSES CONSOLIDATED EUROPEAN PLEDGE

The European Commission today adopted a Communication setting out proposals for the European Union's position at the Madrid Conference on Reconstruction in Iraq. The Communication suggests that Europe should offer a consolidated pledge at Madrid, bringing together the contribution from the EU budget and the individual contributions from EU member states. It is proposed that EUR 200 million should be made available from the EU budget for reconstruction in Iraq in the initial period up to the end of 2004. EUR 100 million in humanitarian assistance from the EU budget is already being deployed in Iraq. The Communication outlines a common approach, stressing that success will depend on three factors: security, transfer of power to the Iraqi people and a multilateral framework for reconstruction including the creation of a multi-donor trust fund. It notes the importance of involving Iraq's neighbors in the reconstruction process from the start.

Chris Patten, EU External Relations Commissioner, said “Whatever the depth of division in the international community over the war, we all have a stake in a stable, open, democratic Iraq. In Madrid, Europe will play its part in the international effort to lay the first foundations for bringing about a better life for the Iraqis under their own representative government. The worrying security situation should not hold us back from planning for Iraq's political and physical reconstruction. The more international legitimacy we can bring to this project the more likely it is to succeed."

Michaele Schreyer, EU Budget Commissioner, said, “The Commission's proposal is based on a realistic assessment of resources available for external actions. The figure compares well with the pledge we made for reconstruction aid for Afghanistan, of EUR 1 billion over five years. It demonstrates clearly our commitment to building a better future for Iraq and all its people."

At the European Council in Thessaloniki, the European Union confirmed its readiness to participate in the reconstruction of Iraq within the framework of UN Security Council Resolution 1483 and invited the Commission to submit proposals. The Communication, “The Madrid Conference on Reconstruction in Iraq, 24 October 2004,” which has been put forward by Commissioner for External Relations Chris Patten in agreement with the Commissioner for the European Community Budget, Michaele Schreyer, responds to this invitation.

The Madrid Conference will aim to reach a consensus on the framework and priorities for international efforts to boost the reconstruction process and seek financial commitments until the end of 2004. The Communication sets out three factors that will be key to the success of the reconstruction effort: 

• An improvement in the security situation;
• A clear commitment to the establishment of a sovereign Iraqi government;
• The creation of a transparent and operational multilateral framework for reconstruction.  

Success will also depend on the involvement of Iraq's neighbors, notably Turkey, Jordan, Syria, the Gulf Co-operation Council States (GCC) and Iran.

The Communication proposes that the European Union should make a single pledge at Madrid, combining funds provided from the Community budget and the member states. The Commission will propose to the Council and European Parliament that EUR 200 million be made available from the Community budget for reconstruction in Iraq until the end of 2004. This pledge takes into account needs assessments coordinated by the United Nations and the World Bank, in which European Commission staff participated. It is a substantial, but realistic pledge, reflecting the operating environment in Iraq.

Priorities for Community assistance would include support in areas such as institutional and capacity-building, creating a social safety net, health, water and sanitation, education, employment, as well as the strengthening of civil society and the protection and promotion of human rights and democracy. Assistance would be channeled via the United Nations bodies and NGOs and, once established, a Multi-Donor Trust Fund for Iraq implemented by the World Bank and the United Nations. This Trust Fund would operate separately from, but in co-operation with, the funds managed by the Coalition Provisional Authority.

The European Commission today also adopted the necessary budgetary proposal to mobilize EUR 200 million for the period up to the end of 2004. In the remaining months of 2003 EUR 40 million would be found within the existing External Relations budget. This is on top of the EUR 100 million in humanitarian aid that ECHO is implementing in 2003.

Since reconstruction funding for Iraq is not covered in the preliminary draft budget for 2004, the Commission proposes to create a new budget line for Iraq (article 19 08 07 “Aid for rehabilitation and reconstruction of Iraq”) of EUR 160 million. The sum would be found by taking EUR 86 million from unbudgeted resources in the External Relations budget (the “margin” under Heading 4) and by using the “flexibility instrument” to mobilize a further EUR 74 million. This instrument makes it possible to go beyond the ceiling set for the External Relations budget, so that the proposed funding for Iraq does not cause any reduction in what is planned for other countries and regions. This proposal requires an “amending letter” from the Commission to the Council and the European Parliament and is subject to approval under the usual annual budget procedure.

Commissioner Patten visited Baghdad on 17 September to assess conditions in the country and priorities for assistance, in the run-up to the Madrid Conference. During the visit Commissioner Patten met representatives from the United Nations and paid his respects at the office of the late Special Representative Sergio Vieira de Mello. He held talks with Iraqi civil society and leading members of the Iraq Governing Council including Chairman Ahmed Chalabi and met Interim Foreign Minister Hoshyar Zebari and the Interim Minister of Public Works, Nisrin Mustafa al-Barwari. At the Coalition Provisional Authority, he had the opportunity to meet Ambassador Paul Bremer and Sir Jeremy Greenstock.

For more information about EU relations with Iraq:

http://europa.eu.int/comm/external_relations/iraq/intro/index.htm.

For more on EU humanitarian aid to Iraq:

http://europa.eu.int/comm/echo/field/iraq/index_en.htm.

EUR 1.00 = $1.1671 on Wednesday October 1, 2003