- A bizarre political statement by Saddam Hussein has earned
Iraq a windfall of hundreds of million of euros. In October 2000 Iraq insisted
on dumping the US dollar - 'the currency of the enemy' - for the more multilateral
euro.
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- The changeover was announced on almost exactly the same
day that the euro reached its lowest ebb, buying just $0.82, and the G7
Finance Ministers were forced to bail out the currency. On Friday the euro
had reached $1.08, up 30 per cent from that time.
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- Almost all of Iraq's oil exports under the United Nations
oil-for-food programme have been paid in euros since 2001. Around 26 billion
euros (£17.4bn) has been paid for 3.3 billion barrels of oil into
an escrow account in New York.
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- The Iraqi account, held at BNP Paribas, has also been
earning a higher rate of interest in euros than it would have in dollars.
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- At the time of the change the UN issued a report saying
that the move could cost Iraq up to £270 million. Independent experts
questioned the value of buying into a plummeting currency.
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- 'It was seen as economically bad because the entire global
oil trade is conducted in dollars,' says Fadhil Chalabi, executive director
of the Centre for Global Energy Studies.
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- The marked appreciation of the euro, higher interest
rates, and the ability to pay mainly European suppliers in euros is believed
to have made hundreds of millions for the Iraqi oil-for-food programme.
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- UN officials insist that this benefit helps to pay for
humanitarian aid, war reparations, and the cost of weapons inspectors.
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- Guardian Unlimited © Guardian Newspapers Limited
2003
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