U.N. given reprieve on spending cap by U.S., EU

NEW YORK — The United Nations appears to have postponed a financial crisis that threatened to dim the lights at the end of June, as the United States and other key governments have agreed to extend its spending authority.

Washington had imposed a spending cap, set to expire at the end of the month, in an effort to ensure that difficult management reforms were not delayed until the end of the usual two-year budget cycle.

But U.N. officials and diplomats say that the United States, Japan and other nations are not willing to see the lights go out — yet.

“The cap on the budget will be lifted. There will be no crisis, as far as I can see, this month,” U.N. Secretary-General Kofi Annan said yesterday during a press conference that touched on crises in Somalia and East Timor, and the field to succeed him as secretary-general.

He noted that “the tensions and poisonous atmosphere” that marked earlier discussions had dissipated.

U.S. Ambassador John R. Bolton, who negotiated the six-month spending authority with other countries in late December, said yesterday that the Bush administration, European Union and Japan have been meeting with the powerful bloc of 132 developing nations and were working toward a consensus on how to streamline the organization to mutual satisfaction.

“Our positions were quite in accord with one another,” said Mr. Bolton, stressing Washington’s flexibility. “We have tried not to draw lines in the sand.”

Specifically, the big donors want to make the organization more efficient and responsive by streamlining administrative matters and consolidating more power in the hands of the next secretary-general.

But a bloc of 132 poorer nations fear that the Secretariat will be beholden to large donors, and are reluctant to give up their own negotiating power in the General Assembly.

They have two weeks before the cap expires, but Mr. Annan said he has not yet felt the need to raise the issue during regular phone calls with Secretary of State Condoleezza Rice.

“I believe that perhaps the sense of crisis has been exaggerated,” said Pakistani Ambassador Munir Akram, whose country has been a vocal member of the developing nations. “The budget cap, one way or another, will be lifted. I hope it’s unanimous, so that no one feels they will have a reason to withhold their money in the future.”

Mr. Akram, who with Canadian Ambassador Alan Rock has been serving as a liaison in the negotiating process, indicated that key sticking points remain.

Tensions between the international organization and its host country are still raw.

Asked by reporters yesterday about his relationship with Mr. Bolton, Mr. Annan firmly replied, “I work with him as I work with 190 others.” And Mr. Bolton who spoke harshly of Mr. Annan’s deputy, Mark Malloch Brown, for telling a left-leaning gathering that the American heartland does not understand the United Nations’ positive aspects repeated criticisms yesterday.

“I can tell you the criticism of the intelligence of the American people is never a smart thing to do, politically,” he said in response to reporters’ questions. “The comments have had a negative impact, politically, and that impact continues. I’m not trying to dwell on it but it’s a reality in Washington.”

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