US 'agrees UN payment cuts'

Congress says the US pays too much for things like peacekeeping

The United States is reported to have negotiated substantial cuts in its contributions to the UN in return for full payment of hundreds of millions of dollars in arrears.

After months of hard bargaining, United Nations members have reached an outline agreement which would see US payments to UN administrative and peacekeeping budgets slashed.

If the deal goes ahead, it could clear the way for the US Congress to release about $1.5 billion which the UN says Washington owes in arrears.

The deal appears to hinge on an offer by CNN head Ted Turner personally to pay the $34m shortfall between what the US owes and what Congress is willing to authorise for 2001.

"We now have an informal agreement," UK Ambassador Sir Jeremy Greenstock said after the all-night negotiations. "It is remarkable that we look like solving this."

His US counterpart, James Cunningham, said he was confident "the final pieces" of the deal would be put in place later on Friday - the deadline for restructuring the amount each country must pay to the UN budget.

Reports say France has said the US proposal is acceptable as long as arrears are paid in full.

Its ambassador, Jean-David Levitte, had earlier predicted last-minute bargaining amid "pain, recrimination and screaming."

Shortfall

The US Congress has been withholding the money - which American estimates put at $926m - in an effort to persuade the UN to reform its budgeting procedures.

Under the proposed deal, US payments would drop as follows:

• from 25% to 22% of the $1bn UN administrative budget

• from 30% to 26 or 27% of the $3bn UN peacekeeping budget

Two factors appear to have been instrumental in solving a problem that has dogged US-UN relations for most of the last decade - the UN's end-of-the-year deadline, and the imminent inauguration of US President-elect Bush who wants the issue out of the way.

Facts about the UN

The budget for the UN's core functions is $1.25 billion a year

The US share of the UN's regular budget is the equivalent of $1.11 per American - San Marino pays $4.26 per person

The New York headquarters of the UN employs only 4,500 people, while the Swedish capital in Stockholm has 60,000 employees

52,100 people work for the UN. Fast food chain McDonald's employs three times this number

If Mr Turner's offer is accepted, it will not be the first time he has intervened to help UN finances.

Three years ago, he stunned observers with a $1bn gift for humanitarian projects.

Any reduction in US contributions to the UN would leave other countries to make up the shortfall - and many have objected.

The Americans want smaller wealthy countries, like Singapore and some of the oil-producing states, to pay more.

Nations such as South Korea, Brazil, Chile, Iran, the Czech Republic, Poland and Thailand will be allowed to stagger their respective increases over three years.