- The Washington Times - Tuesday, February 18, 2003

GENEVA The mass anti-war demonstrations across Europe over the weekend have been replaced by analyses in various capitals predicting an impending economic catastrophe.
Most such forecasts show a war against Iraqi leader Saddam Hussein would leave industrial economies in a shambles, regardless of its speed and outcome.
In the worst-case scenario a prolonged war with no immediate outcome some European analysts forecast a vertiginous rise in the price of oil, a collapse of the U.S. dollar and trade wars across the industrial world.
Ahmed Zaki Yamani, a former oil minister of Saudi Arabia and founder of the Organization of the Petroleum Exporting Countries (OPEC), was widely quoted in Europe saying that, should Saddam resort to massive destruction of oil fields, the price of a barrel of crude could rise to between $80 and $100.
The dollar is seen under this scenario as plunging as low as $1.50 to the euro, having already lost 20 percent during the past year. It traded yesterday at $1.07 to the euro.
Such forecasts are rejected by many mainstream analysts, but the voices of pessimism have almost entirely dwarfed those few backing the U.S. quest to deprive Iraq of its weapons of mass destruction.
According to one pro-U.S. diplomatic analysis here, the United States has acquired the image of an aggressor and Iraq that of an innocent victim threatened by an arrogant superpower.
At the same time, Europe's growing demand for what amounts to "peace at any price" has reminded East European diplomats of the 1938 Munich Pact, which handed parts of Czechoslovakia to Adolf Hitler while delaying World War II by only 11 months.
West European economists and politicians claim that short of a miraculous easing of tension, Europe's economy is facing a severe recession if not worse.
Wolfgang Clement, Germany's minister of economy and labor, said, "The threats of war have swept across Europe like a trail of gunpowder. … What we need is a breathing spell to analyze the future with clarity and certainty."
Francis Mer, the French finance and economy minister, has said that "waiting and uncertainty is the worst."
In case of a quick and victorious war, he added, "stock markets would surge ahead and the bond market would no longer be hesitant."
"There are very few examples of positive impact on the economy resulting from conflicts," said Xavier Timbeau, a French economic analyst. "World wars were catastrophic. Years were needed to rebuild what had been destroyed."
European officials point to the relatively low cost of the first Persian Gulf war $76 billion in terms of the 2002 dollar compared with $494 billion for the Vietnam War.
However about $50 billion of the Gulf war cost was covered by Saudi Arabia, Kuwait, the United Arab Emirates, Japan and Germany, easing the strain on U.S. finances.
This time, there has been no discussion of joint financing of the war, say European sources, and there are few credible estimates for the cost of the post-conflict "pacification" of Iraq.

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