Guglielimo Rapozzino, October 28, 2000

The Friend of the Euro - Saddam wants European money for Iraqi oil

With one action Iraq has become a protagonist in the the main stories of oil and money. OPEC had decided to sell less oil in order to push up the price. The world is frightened. The countries that import oil advise OPEC to increase production. The price drops for a week, then rises again. The exchange rate - euro to dollar - enters the scene, and the European countries find themselves penalized. OPEC increases production [ by 500,000 barrels a day] but this is not enough. In the meantime, the consumption does not go down; the fear of expensive oil is less than strong than the that of reducing automible use, or even of lowering the speed limits. Enter Iraq, who now wants to be paid in Eurodollars. "The dollar," says saddam, "is an enemy currency."

The answer is immediate. Nothing doing. The marriage of dollar and euro is indissoluable. However, Iraq has many cards in its hands. The strongest one is that it has nothing to lose. The 2.2 million barrels per day which it sells, and which should render it between $50 and $60 million per day, to use for food and medicine, end up in a closed account in a New York branch of a French bank, Banque Nationale du Paris. It is difficult to take possesion of this money. So much so in fact, that $10 billion are now deposited there. So, even if oil sales were to be suspended, these $10 billion that are left. They are given to Iraq piecemeal to prevent the country from acquiring weapons. The excuse given by the U.S. for its opposition to the change of currency is that Iraqis could buy weapons. Later, the U.N. if forced to admit that in the so-called Oil-for Food program there is so little currency - that Euro is as usable as the dollar.

But do we really havd to have the Euro? Or do the Iraqis only intend to slap their enemy, Satan? Or do they intend to give an example of their economic culture to the cowardly European governments, that do not know how to do the same?