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Last Updated: Monday, 13 October, 2003, 22:18 GMT 23:18 UK
UK pledges 300m for Iraq
The UK has pledged an extra 300m to help rebuild Iraq in addition to the 200m it has already committed.

Iraq's interim administration is relying on oil sales to balance its books in 2004
The announcement came at a meeting of European Union foreign ministers who endorsed a pledge of 200m euros ($236m).

Both sums are a tiny proportion of the $55bn that the World Bank says is required over the next four years to rebuild the country.

The pledge comes as the interim administration in Iraq unveiled its 2004 budget, which relies heavily on projected oil revenue to cover public spending costs.

The document also reveals the extent to which the administration is relying on foreign aid to pay for reconstruction.

Donor conference

Iraq's finance minister Kamel Al-Kilani said the county was counting the $20bn aid package being debated by the US congress to rebuild its electricity infrastructure.

World Bank/UN estimate - $36bn: Covers administration, health, education, employment, infrastructure, water agriculture
US estimate - $19bn: Covers security, oil industry, foreign affairs, culture and religious affairs, environment
Total needs $55bn
And he said an international donors conference in Madrid on 23 October would also be crucial.

UK foreign secretary Jack Straw was the only EU minister to announce any additional national contribution at Monday's meeting, but he urged fellow ministers to follow suit.

"We would encourage others to be as generous as they are able within the limits of their own spending plans," Mr Straw said.

"What I am looking for is that there should be further substantial contributions made for subsequent years."

Continuing divides

The EU is the world's biggest aid donor, but its budget is already stretched with priorities such as Afghanistan, Liberia and the West Bank and Gaza Strip.

US administration asking Congress for $20.3bn emergency non-military spending
Expected commitments: Japan $5bn, UK $910m, Canada $300m, European Union $233m
Furthermore, some countries which opposed the war on Iraq are uncomfortable with the way the US runs Iraq, and are reluctant to make any major contribution.

"It's no secret that some member states also think those who broke Iraq should pay to fix it," one EU diplomat said.

France and Germany, the most vociferous members of the anti-war faction in Europe, want the United Nations to have a stronger role in running Iraq and are demanding a quick transfer of power to Iraqis.

Foreign investment and profit taking could be seen as Western plundering
Toby, Spain

But the UK supports Washington in calling for a constitution to be drawn up and for elections to be held before power is handed over.

The meeting comes against a backdrop of continuing unrest in Iraq, where six people died in a suicide attack in Baghdad on Sunday.

The BBC's Chris Morris
"Divisions about Iraq haven't gone away"

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