- The Washington Times - Thursday, January 18, 2001

GENEVA The advent of a new administration in Washington has intensified calls across Europe for easing the economic embargo against Iraq, which yesterday held celebrations marking 10 years since the end of the Gulf war.

France and Italy along with Russia are leading the campaign that counts on the support of the U.S. oil lobby but also fears a massive American return to the Iraqi oil fields.

The "cruel, inefficient and unjust" embargo, according to French Foreign Minister Hubert Vedrine, should give way to a more practical arrangement.

International bankers and experts point out that the embargo is being increasingly bypassed to the tune of at least $2 billion a year in black-market trading, allowing Saddam Hussein to maintain his repressive apparatus.

In Baghdad yesterday, Saddam in a speech offered an apocalyptic account of the Gulf war, which he called the "mother of all battles," and made only passing reference to the ferocious, U.S.-led bombing campaign and the lopsided ground war that chased demoralized Iraqi troops out of Kuwait.

"On a day like this day 10 years ago, evil and all those who made Satan their protector lined up in one place, facing those who represented the will to defend what is right," Saddam said. Iraq's enemies were "stamped with disgrace and shame that will never disappear until doomsday."

"Iraq has remained, the people have remained, the army has remained," proclaimed Saddam, who stood next to an Iraqi flag during a 25-minute televised speech. "Iraq has triumphed over the enemies of the nation."

Much of the Arab world has accepted the rule of the Iraqi strongman as inevitable. One by one, Arab countries have been reestablishing economic links with the Saddam regime.

The latest country to announce an increase of exports to Iraq was Egypt which until recently followed Washington's lead on Iraq's isolation.

"The sanctions have not toppled Saddam nor forced him to disarm," wrote the conservative French daily Le Figaro. "The current situation merely undermines the prestige of the United Nations and of the United States."

For some time France has been building economic bridges to Iraq, becoming its partner and concluding an estimated 15 percent of agreements under which Iraq can carry out its "oil-for-food" program authorized by the United Nations.

French officials claim that the continuing ostracism of Iraq no longer makes sense. Ignoring appeals from the United States, the French are currently negotiating the development of natural gas fields in northern Iraq.

Swiss banking sources said Europe can no longer ignore Iraq, a country with the world's second-largest oil reserves after Saudi Arabia. Before the 1990 invasion of Kuwait and the subsequent Gulf war. Iraq had one of the best-educated and prosperous populations in the Middle East.

The embargo has reduced most of Iraq's 23 million people to penury and abject poverty.

However, what worries West European governments more are the economic inroads made in Iraq by Russia. Lukoil, the leading Russian oil company, recently signed a contract for the partial exploitation of the Iraqi oil fields known as Qurna West.

While Russia and China have formally signed several petroleum industry agreements with Iraq in violations of the U.N. sanctions, French firms claim they have merely "initiated" contracts, waiting for a change in the U.N. policy.

So far Great Britain has firmly reduced contacts with Iraq, which for years was part of the British sphere of influence in the Middle East.

A significant change in the European attitude toward Iraq was last fall's trade fair in Baghdad, attended by some 1,500 businessmen from 45 nations. Because of the air embargo, they had to travel by taxis across 800 miles of the Jordanian and Iraqi desert.

"There is no doubt that many companies are already planning for the post-embargo area," a French business source said. "And there is a growing feeling that American companies will not be able to afford to lag behind."

• This article is based in part on wire service reports

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