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To: GST who wrote (151710)1/21/2003 5:08:49 PM
From: stockman_scott  Read Replies (2) | Respond to of 164684
 
France Vows to Block Resolution on Iraq War

U.S. Schedule Put at Risk By U.N. Debate
By Glenn Kessler and Colum Lynch
Washington Post Staff Writers

Tuesday, January 21, 2003; Page A01

UNITED NATIONS -- France suggested today it would wage a major diplomatic fight, including possible use of its veto power, to prevent the U.N. Security Council from passing a resolution authorizing military action against Iraq.

France's opposition to a war, emphatically delivered here by Foreign Minister Dominique de Villepin, is a major blow for the Bush administration, which has begun pouring tens of thousands of troops into the Persian Gulf in preparation for a military conflict this spring. The administration had hoped to mark the final phase in its confrontation with Iraq when U.N. weapons inspectors deliver a progress report Monday.

But in a diplomatic version of an ambush, France and other countries used a high-level Security Council meeting on terrorism to lay down their markers for the debate that will commence next week on the inspectors' report. Russia and China, which have veto power, and Germany, which will chair the Security Council in February, also signaled today they were willing to let the inspections continue for months.

Only Britain appeared to openly support the U.S. position that Iraqi President Saddam Hussein has thwarted effective inspections.

"If war is the only way to resolve this problem, we are going down a dead end," de Villepin told reporters. "Already we know for a fact that Iraq's weapons of mass destruction programs are being largely blocked, even frozen. We must do everything possible to strengthen this process."

The United Nations, he said, should stay "on the path of cooperation. The other choice is to move forward out of impatience over a situation in Iraq to move towards military intervention. We believe that today nothing justifies envisaging military action."

Secretary of State Colin L. Powell, in the face of such comments, departed from his prepared text on terrorism and implored his colleagues to remember that the Security Council resolution passed unanimously Nov. 8 gave Iraq "a last chance" to meet its obligations. "We must not shrink from our duties and our responsibilities when the material comes before us next week," Powell said. He used a variation of the phrase "must not shrink" three more times as he addressed the council.

During the weeks of debate on the Iraq resolution, French officials had indicated they were open to some sort of military intervention if Iraq did not comply. But now the French appear to have set much higher hurdles for support.

Rising opposition to war, particularly in France, appears to have played a role in the hardening positions on the Security Council. Foreign officials are also aware of polls in the United States suggesting that support for a war drops dramatically if the Bush administration does not have U.N. approval.

While the United Nations was debating today, U.S. military officials announced that the Army is sending a force of about 37,000 soldiers, spearheaded by the Texas-based 4th Infantry Division, to the Persian Gulf region. It is the largest ground force identified among an estimated 125,000 U.S. troops ordered to deploy since Christmas Eve, the Associated Press reported.

At the United Nations, several foreign ministers said a war in Iraq would spawn more terrorist acts around the globe and, in the words of Germany's Joschka Fischer, have "disastrous consequences for long-term regional stability."

"Terrorism is far from being crushed," said Russian Foreign Minister Igor Ivanov. "We must be careful not to take unilateral steps that might threaten the unity of the entire [anti-]terrorism coalition. In this context we are strictly in favor of a political settlement of the situation revolving around Iraq."

Powell replied: "We cannot fail to take the action that may be necessary because we are afraid of what others might do. We cannot be shocked into impotence because we are afraid of the difficult choices that are ahead of us."

But when the foreign ministers emerged from the council debate and addressed reporters, it appeared that Powell's pleas had made little impact. Although President Bush said last week he was "sick and tired of games and deception," Fischer said the inspections were a success.

"Iraq has complied fully with all relevant resolutions and cooperated very closely with the U.N. team on the ground," Fischer said. "We think things are moving in the right direction, based on the efforts of the inspection team, and [they] should have all the time which is needed."

Chinese Foreign Minister Tang Jiaxuan said Monday's report should be regarded as a "new beginning" rather than an end to inspections. The chief weapons inspectors "have been talking about that there is more work to do in terms of the inspections and they need more time. I think we should respect their opinion and support their work."

De Villepin, in a lengthy and at times theatrical news conference, was asked whether France would use its veto power to thwart Washington's campaign for quick action. He said France "will shoulder its responsibilities, faithful to the principles it has."

France would never "associate ourselves with military intervention that is not supported by the international community," de Villepin added. "We think that military intervention would be the worst possible solution."

France, as chair of the Security Council this month, had organized today's meeting on terrorism in part to draw attention to its contention that the Iraq situation has detracted from the more pressing need to confront international terrorism.

De Villepin reacted coolly to suggestions, made by senior Bush administration officials Sunday, that Hussein and his top advisers be offered political asylum outside Iraq to avert a war. "The problem is something more difficult than a question of change of regime," he said. "Let us not be diverted from our objective. It is the disarmament of Iraq."

U.N. Secretary General Kofi Annan also indirectly criticized the prospect of war when he addressed the council on terrorism. "Any sacrifice of freedom or the rule of law within states -- or any generation of new disputes between states in the name of anti-terrorism -- is to hand the terrorists a victory that no act of theirs could possibly bring," he said, alluding to frequent U.S. assertions that the confrontation with Iraq is part of the larger war on terrorism.

The only sign of support for the U.S. position came from its closest ally, Britain. Foreign Secretary Jack Straw said "time was running out" for Hussein and his "cat and mouse" game. But Straw added that Britain preferred a U.N. resolution authorizing force.

"Iraq has a responsibility now to avoid a conflict, to avoid a war," Powell told reporters. "There is no question that Iraq continues to misunderstand the seriousness of the position that it's in.

"If the United Nations is going to be relevant," he added, "it has to take a firm stand."

France to Mobilize E.U. Members Against Early War in Iraq
By Reuters

Tuesday 21 January 2003

BRUSSELS (Reuters) - France said today that it would seek a united stance against early military action in Iraq at a meeting of European Union nations next week.

Rejecting mounting U.S. pressure, Foreign Minister Dominique de Villepin said: ``It is important that Europe speak on this issue with a single voice. We are mobilized, we believe war can be avoided.''

He told reporters after talks with his Belgian counterpart, Louis Michel, that a January 27 report to the U.N. Security Council by arms inspectors seeking to eliminate Iraq's suspected weapons of mass destruction would only be an interim report.

France is chairing the Security Council this month.

``We see no justification today for an intervention, since the inspectors are able to do their work. We could not support unilateral action,'' de Villepin said.

He said he would use a meeting of the 15 EU foreign ministers in Brussels next Monday and Tuesday to seek a united stance on the issue.

EU diplomats say most member states are apprehensive about a possible conflict and fear the timetable is being driven not by Iraqi behavior but by the best weather conditions for a U.S. military strike.

Britain, the other EU member with a permanent Security Council seat, announced Monday it was sending a larger than expected 26,000 troops to the Gulf in preparation for possible action against Iraq.

France and Germany have said any military action would require a second U.N. resolution authorizing the use of force, whereas Washington and London, while not ruling out a new vote, say they already have sufficient legal authority.

The United States and Britain have both said time is running out for Iraqi President Saddam Hussein.

Belgium's Michel said he was on the same wavelength as de Villepin.

``We really think there is a diplomatic, political space to be exploited, and that perhaps the European Union could play that role,'' he said.

De Villepin spoke out against a rush to war in a Security Council debate Monday, backed by German Foreign Minister Joschka Fischer, who warned of unpredictable consequences for the fight against terrorism.



To: GST who wrote (151710)1/21/2003 5:25:29 PM
From: stockman_scott  Read Replies (1) | Respond to of 164684
 
War clouds shadow U.S. economy

January 20, 2003



(Reuters) — A cloud of uncertainty from the prospect of a U.S. war with Iraq is casting a dark shadow on the world's richest economy, which entered the new year with a worrying lack of momentum, economists say.

Relentlessly weak data released in the past few weeks are making what the Federal Reserve last year dubbed a ``soft patch'' look potentially more ominous and lasting.

``I think the prospect of a war in the Middle East is exerting a very big drag on things,'' said Doug Lee, who heads the consulting firm Economics from Washington.

Lee and other economists said questions over how a war might unfold and the impact it could have on the U.S. economy either through higher oil prices or lower consumer confidence or both — was hurting growth.

Throw in the loss of around $7 trillion in stock market wealth, mix with shrinking payrolls, and economists say you have a dismal brew that raises the chances an already sluggish economy could slow further.

Economic growth braked sharply as it moved from the third quarter of last year into the fourth and it appears to have lost more impetus in the waning weeks of the year.

U.S. employers cut 101,000 workers from their payrolls in December and industrial production fell as well. Incentives from carmakers gave a boost to retail sales last month, but without autos, the key holiday shopping season looked grim.

Consumers' moods have also darkened. A survey out Friday from the University of Michigan showed consumer sentiment soured in early January as concerns over the future mounted.

``The economy remains very erratic. It does not appear able at this point to shake off its recent funk,'' said Lynn Reaser, chief economist at Banc of America Capital Management in St. Louis.

Still, many analysts argue that with a quick end to the U.S.-Iraq showdown and little American blood shed, the economy will pick up steam in the second half of the year.

``Overall, the economy does not appear to be at risk of falling into recession,'' Reaser said. ``If we were to resolve the Iraqi situation overnight ... the markets and the economy probably would rebound quite significantly.''

WAITING, WONDERING

For now, however, businesses remain reluctant to commit to new hiring or new spending on facilities or equipment. A collapse in business investment led the U.S. economy into recession in early 2001 and analysts say a rebound there is key for a solid, sustained recovery.

In a recent survey of 102 businesses by the National Association for Business Economics, the possibility of a longer-than-expected war was cited as the main risk to the firms' bottom lines.

``I think a lot of firms are looking at the current situation and saying, 'Why don't I wait until we either have or don't have a war here and then I'll start thinking about expanding my plans,''' said Ethan Harris, co-chief economist at Lehman Brothers in New York.

But more than the threat of war weighs on the economy.

``When I speak to clients they raise Iraq as the number one impediment,'' said Carl Tannenbaum, chief economist at LaSalle Bank in Chicago. ``It's clearly a main issue, but in the case of businesses I really wonder whether that's all there is to it.''

Tannenbaum said a prolonged squeeze on corporate profits may be playing an even bigger role.

``There's no better tonic for hiring or inventory investment or putting in new equipment than better profitability,'' Tannenbaum said. ``To me that's the more fundamental and lasting reason why business are not willing to commit.''

Like Tannenbaum, Harvard University economics professor Dale Jorgenson thinks the problems go well beyond war fears.

``If you think about the loss of wealth in the market (since its early 2000 peak), the standard estimate is around $7 trillion,'' he said. ``That's a lot of money even for a country like the United States. It amounts to three-quarters of a year's GDP, it's about a quarter of our national wealth.''

``That is something that was there two years ago and it isn't there today,'' Jorgenson said. ``I think the fact is that the economy is undergoing a kind of modest financial crisis in which people are wondering how it is all going to play out.''

Copyright Reuters Limited.