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To: lorne who wrote (35193)	6/11/1999 5:53:00 PM
From: goldsnow	Respond to of 116759

Forgiving? NATO Grapples With Cost Of Keeping Peace In Kosovo 11:06 a.m. Jun 11, 1999 Eastern By Adam Entous WASHINGTON (Reuters) - NATO allies are coming to grips with reality -- keeping the peace in Kosovo will cost them far more than the 11-week air war. The bombing campaign against Yugoslavia has cost NATO countries $3 billion to $5 billion, the bulk of which will be borne by the United States, according to defense analysts. But far more money will be needed to fund peacekeeping operations, and to rebuild roads and bridges damaged or destroyed by the air strikes, setting the stage for a battle within the NATO alliance over paying the bill. ''In terms of costs, it's just the beginning,'' said Steven Kosiak, an analyst with the Center for Strategic and Budgetary Assessments, a U.S.-based think tank. By all accounts, NATO's air war against Yugoslavia hasn't been cheap. Each cruise missile cost $1 million; tank-busting munitions from $130,000 to $300,000; laser-guided bombs up to $100,000 apiece. For the operation the United States has deployed some 1,000 aircraft and 24 Apache attack helicopters, 18 multiple launch rocket system artillery pieces and some 5,500 supporting Army troops. It will also pay most of the bill -- up to $3 billion according to analysts. European allies will split the rest. But keeping the peace will be even more costly. NATO has yet to put a price tag on its plan to base a 50,000-troop peacekeeping force in Kosovo to protect ethnic Albanian refugees as they return to whatever's left of their homes. According to the Center for Strategic and Budgetary Assessments, the United States alone will spend up to $3.5 billion a year to deploy 7,000 U.S. peacekeepers. Germany's defense ministry expects its 8,500 peacekeeping troops to cost 580 million marks (about $310 million) in 1999. France could spend 3 billion to 4 billion francs ($480 million to $640 million) this year to fund its 7,000-strong contingent in the peace force and its share of the air strikes. That does not include reconstruction, which could cost Western powers far more than the peace force. Europe's External Relations Commissioner Hans van den Broek estimated the cost of rebuilding Kosovo will at least match the $5 billion needed to rebuild Bosnia after four years of war there. A recent EU estimate put the cost of economic reconstruction in the Balkans at up to $30 billion. Albania, Bosnia, Bulgaria, Croatia, Macedonia and Romania will require $2.2 billion in assistance, according to the International Monetary Fund and the World Bank. ''When you sit down and do the math, you see there are going to be more people involved in keeping the peace than in fighting the war,'' said defense expert John Pike of the Federation of American Scientists. ''These people are also going to be involved in keeping the peace for years, as opposed to fighting the war for weeks.'' Foreign ministers from Group of Eight nations have already started work on a ''Marshall Plan'' to rebuild the region. Group of Seven finance ministers will discuss reconstruction at a meeting in Germany this weekend, said outgoing U.S. Treasury Secretary Robert Rubin. ''Clearly the international financial institutions should be deeply involved in bearing the cost of this, the European Union and its members obviously should be deeply involved and we'll do what's appropriate,'' Rubin said. President Clinton told reporters he expected European states to shoulder the largest share of the rebuilding costs, adding: ''I don't want us to get into a haggling situation.'' But analysts said a dispute between the United States and Europe was inevitable. Congressional leaders have already insisted that Europe foot the bill. ''It is time that our friends in Europe begin to pick up the cost of rebuilding and peacekeeping,'' said House Speaker Dennis Hastert, an Illinois Republican. Sen. Joseph Biden, a Delaware Democrat, agreed: ''It is their responsibility. They will greatly benefit from a reconstructed and more unified South Eastern Europe. And I wish them well.'' U.S. lawmakers also want to limit how the money is spent. The Senate voted this week to bar reconstruction funding as long as Yugoslav President Slobodan Milosevic remained in power. Copyright 1999 Reuters Limited. All rights reserved.

To: lorne who wrote (35193)	6/11/1999 6:30:00 PM
From: Investor-ex!	Read Replies (1) \| Respond to of 116759

Hi lorne, First, as has been the past pattern for excessive levels of third-world debt, I believe (and likely they believe as well) that much of this debt principal is already toast. And if Y2k comes close to messing things up in the third world as predicted, this debt becomes burnt toast. The last time the major banks screwed up this bad they got their heads handed to them. Thus, the groping for a "solution", and that "solution" had better materialize soon. In terms of bank shareholders, third-world debt bondholders, and their related, hapless bailbondsmen-taxpayers, there will be much gnashing of teeth. On the plus side, if these countries are let off the hook, new loans can safely be made again -- sort of like how a bankrupt sometimes finds it easier to get new loans from certain lenders (though often at substantially higher than market rates) after all his past obligations are discharged. So, the old lenders are hosed and the new lenders are sitting pretty, unless they screw up later on, too. That's why we continually see this "roll over and add to the principal so that the interest payments can stay current" syndrome. The old lenders know they're at a disadvantage if they let go and take the hit, opening a clear path for the competition, such that it is. However, looming events would appear to limit continuing along the rollover path. It's really not clear what the IMF gold sales would accomplish in this regard. The gold sold won't amount to enough to make much of a difference. The proceeds will go from the IMF to the lending banks, which are connected back to the IMF through their respective central banks, so the whole thing is just the IMF bailing out itself and the lending banks using assets mostly pledged by the taxpayers of the countries of their respective central banks. The rest of the loan balance will come out of the hides of the lending bank shareholders, the securitized debt holders, and the taxpayers of the countries where the lending banks operate. It's largely a transfer from first-world citizens to certain third-world citizens because the central banks, IMF, and lending banks have overreached, as usual. This overreaching is made possible because there is barely any practical limit on the amount of money that can be created because it's not backed with anything of real value and therefore self-limiting supply. Apparently, those cheap imports may turn out to be not so cheap after all, sort of a "principle of conservation of value" at work.