Achtung, Baby! No Contracts!

A collective Aber was ist denn los?! issued from the German government last Wednesday, the day after the Pentagon’s new policy excluding as primary bidders on Iraqi reconstruction contracts companies from “peace camp” countries was disclosed – not by any formal notification to the countries thus excluded, mind you, but simply by a posting on the Internet, to the “” site, of the “Determination and Findings” text, signed by Undersecretary of Defense Paul Wolfowitz. That’s why government spokesman Béla Anda (a very Hungarian name, by the way) qualified his qualification of the American action as “not acceptable” with the proviso that what he had been hearing from the press would turn out in fact to be true. We can make our first plunge into the facts of this case with the authoritative Frankfurter Allgemeine Zeitung’s Wednesday article, Berlin Criticizes Washington: Decision Unacceptable. That’s also why German Foreign Minister Joschka Fischer was only willing to say that he had heard the news “with amazement” (“mit Erstaunen zur Kenntnis genommen“), and that he was going to get with his American contacts to find out what the hell was going on.

By now you know that it’s all sad but true, Joschka (also a very Hungarian name, by the way). As it turned out, during this past crucial week Berlin served as a sort of international crossroads, so that figures such as Russian Foreign Minister Igor Ivanov and even UN Secretary General Kofi Annan found themselves there and could stand beside their hosts and make similar mournful comments to the press. We’ll get to those in due time, but right now I’d like to switch to the Süddeutsche Zeitung’s coverage, which has the most extensive treatment of the rather interesting reaction to developments from German government minister Heidemarie Wieczorek-Zeul (SPD). She’s the minister for Development Aid, you see; and you can imagine that she might be feeling somewhat double-crossed after that Donors-for-Iraq conference of last October. (Although don’t cry too much for dear Heidemarie: Germany didn’t offer any money itself during that conference, only collectively through the EU’s contribution.) She accused the Americans of playing a Doppelspiel – a “double-game.” One the one hand they want more financial and military support for Iraq, on the other hand they want to keep all the reconstruction work for themselves. Well, where the World Bank is in charge of spending money for reconstruction (which is the case for most of the money raised at the Madrid conference), international standards for the awarding of contracts apply, and not Wolfowitz’ rules – and she added darkly that, so far, only $700 million of the $33 billion pledged there has actually been raised. (Note that the Süddeutsche Zeitung article does have a typo where it cites $33 million raised at Madrid.)


Then came the FAZ article of last Thursday, and Bundeskanzler Schröder himself got to weigh in (Schröder: American Behavior Is Counter-Productive [“Rückwärtsgewandt“]). The American action “makes no sense,” it “doesn’t help the matter,” the Bundeskanzler made known. And standing by his side, Kofi Annan called it an “unhappy” decision (that’s right: “unglücklich“). But then that article speaks of the telephone call George W. Bush made to Schröder on Wednesday evening (Central European Time, I suppose), during which it was allegedly agreed that the question of German companies’ bidding participation could be discussed again during the visit James Baker is supposed to make to Berlin soon to discuss the forgiving of Iraq’s foreign debt. (However, see Bush’s later comment below.) What’s more, the FAZ then cites some support for the American position: from British Foreign Minister Jack Straw, for example. (“Decisions about how a country spends its tax revenues are only for that country to make.”) And support from Abdul-Razzaq Mirza, foreign minister of the autonomous Kurdish government in northern Iraq (“It’s American money, so the Americans should be able to decide about its use”), who in fact was also in Germany as one of the headliners at an “information evening” of the Council for German Industry and Commerce – where he presumably was busy trying to convince German businessmen that life could still be very happy and profitable working as a sub-contractor in Iraq, and especially in the Kurdish areas.

Now to Igor Ivanov’s comments which I promised you, and which are best covered by Die Welt (Indignation over Exclusion from Iraqi Reconstruction). The German press in general has a bit more to add about his comments than what we saw in the French press: Ivanov made pointed reference to President Bush’s earlier promise that the American presence in Iraq was only going to be temporary, and that the Iraqi people would be granted control over what goes on in their country shortly. So maybe all of this won’t matter for very long, anyway.


Just as was the case in the French press, though, for coverage and comment of a business-related story like this, the leading business newspaper is likely to be a good place to go. That certainly turns out to be true here, although perhaps you can’t really say that businesslike decorum is being maintained, as the FT Deutschland hit out on Wednesday with an editorial entitled Wolfowitz Screams for Vengeance. That headline may tell you just about all you need to know; Wolfowitz is still thinking in traditional war-and-peace terms, the FTD complains, and “his announcement awakens memories of triumphant generals, who after the weapons have fallen silent divide up the booty.” Carrying the neo-conservative banner, he is determined that those who were against the war be made to pay. What’s even more scandalous, he doesn’t want to stop with Iraq; a believer in the “domino theory,” he has other Middle Eastern states in his sights to be similarly “democratized,” and he has now made crystal-clear what will happen with countries that oppose this in the future. (Well, take a look at paragraph 5 of that Pentagon document: it does talk about encouraging international cooperation “in future efforts.”)

Hmm: The impression here would be that there is some suspicion in German circles about American intentions. Unfortunately, President Bush didn’t help to allay those suspicions any on Thursday when, told that the German Chancellor was concerned that the Pentagon’s new policy could violate international law, responded with “International law? I better call my lawyer.” (Read all about it in English here in the Washington Post.) Torsten Krauel of Die Welt was right on top of that incident with his article Bush Answers Schröder with a Sarcastic Gibe – in fact, he expanded Bush’s remarks to read “International law? I better call my lawyer. He didn’t tell me anything about that,” and terms it a “calculated taunt, marked by the diction of the coming American election campaign.” He also quotes presidential spokesman Scott McClellan to the effect that the new policy was not a unilateral Pentagon decision, but rather the result of coordinated executive branch policy – something that contradicts reports (such as in the New York Times) that the White House was mighty displeased that the contract exclusions came to light just before the President was due to call the leaders of France, Germany, and Russia to ask for Iraqi debt-relief.


All is not lost for German firms, however, as the FAZ makes clear in its article Germans Are Still Counting On Further Iraq Contracts. They’ve got a number of reasons for guarded optimism. First of all, it turns out life can indeed be very happy and profitable as a sub-contractor in Iraq. Several German firms are already there working in that capacity, and have been practically since the end of hostilities, working in fact in many cases for the American Bechtel corporation, which famously was awarded an early mega-contract there. There’s a good reason for this, other than that they’re German (and I say quite sincerely that that itself is a very good reason to hire such companies for needed technical work): Saddam Hussein’s regime also knew about the advantages of hiring Germans, so that much of the infrastructure to be restored was already built by German firms, and thus they have the knowledge and the blueprints to come back in and restore it in the most cost-effective way. Beyond that, though, they draw encouragement from the way the Pentagon has recently postponed its schedule for starting to award those 26 mega-contracts at issue, as if maybe it’s thinking it made a mistake. Even if there is ultimately no softening of the exclusion policy, the Germans like their chances because, after all, a company’s competitiveness in the contract-awarding process depends in part on the quality of the sub-contractors it has lined up to work with it – and the Americans in charge of that process also know how German firms work!


In the midst of last week’s brou-ha-ha, the FAZ had time to contribute a little depth to the discussion with an article with the straightforward title Poland’s Loyalty in Iraq Is Not Paying Off. See! The Poles have toed the American line all along, and what have they gotten out of it? OK, prestige as a “player” on the international stage (and so far one dead major) – but that’s about it. As FAZ Warsaw correspondent Michael Ludwig quotes from a headline in Super Express (apparently some Polish tabloid, so we don’t cover it in EuroSavant): “Where Is Our Loot?” No Polish firms are yet involved in Iraqi reconstruction; what’s more, Poland just recently contracted to buy American F-16 combat planes under terms and conditions which many Poles think could have been a bit more generous. Meanwhile, the percentage of Poles against the deployment of their troops to Iraq has climbed to 67%, with 53% telling pollsters that the deployment harms their country. Nonetheless, the Polish Sejm recently approved an extension, with only the notorious Andrzej Lepper of the extreme farmer’s “Self-Defense” party arguing to “bring our boys home” because “it’s not our war.”


And finally, we have the excellent editorial on the Pentagon’s new exclusion policy from the commentary pages of Die Zeit, entitled in full Mission Impossible: The Conflict Over Reconstruction Contracts in Iraq Reveals German Double-Morality and American Rigor. Especially contrasted to the FTD’s screaming for vengeance, this piece really makes you appreciate the virtues of a free and intelligent German press. See, folks, if you can muster the fortitude to read my pieces all the way through I’ll often reward you with a nice cherry at the end – keep that in mind. Let me lay the opening lines of this one on you: “Put your hand on your heart: Would the German taxpayers be happy if their government spent billions to put some foreign land in order, and the contracts to do so went to American firms?” Of course not – and so the fuss the Germans were raising in the past week, in author Thomas Kleine-Brockhoff’s eyes, simply reveals German Doppelmoral, or put simply, hypocrisy.

Take a look Gerhard Schröder’s attempts to get back into America’s good graces after the strain in relations occasioned by the war. These included traveling to New York last September to meet President Bush at the United Nations, during which the Bundeskanzler wrote for the New York Times that Germany would “share the burden in Iraq” with the US. But what was Germany’s contribution at the Madrid donors’ conference the following month? Zero! Sure, Germany contributed via the EU – a measly €300 million contribution in the name of all of Europe! “Its interest in Iraqi reconstruction the German government is plainly only discovering now that it’s a matter of profits for German firms. So much for the moral grounding of German foreign policy.”

Well OK, some might respond, but it’s the same for the Americans – “Blood for Oil!” But that’s not the case at all, Kleine-Brockhoff writes. “Blood,” sure: hundreds of American servicemen and -women have now died in Iraq. But there has still been precious little oil. And profit in general? “Up to now they have sunk several hundred billion dollars into the Iraqi desert sands, and they want only one thing: to get out!”

Sure, you also can’t say that American policy over Iraq has been very intelligent; in fact, Kleine-Brockhoff maintains, it’s “a throw-back to the worst phase of the transatlantic Ice Age,” mainly because the Pentagon has succeeded in hijacking control of it, and that’s where an inflexible neo-conservative ideology holds sway that expects the rest of the world to blindly follow American dictates or be punished.

In the meantime, James Baker’s upcoming mission to do something to relieve Iraqi foreign debt has been turned into “mission impossible.” Kleine-Brockhoff hazards the guess that, in the battle for influence with the President, Baker will trump the Pentagon any time – for, ultimately, Baker is fighting to bring enough progress to ensure the President’s re-election. If that re-election does come to pass, don’t be surprised to see a big shake-up in the top civilian ranks of the Pentagon in the second Bush term.

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