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Last Updated: Saturday, 24 December 2005, 02:41 GMT
UN states resolve budget impasse
UN Secretary General Kofi Annan
Decisions on reform will not be made until early next year
The UN has agreed on a budget for next year, with a $950m (548m) spending cap for the first six months, aimed at applying pressure for major reform.

Funding for the second half of 2006 will be released if Secretary General Kofi Annan concludes that enough reforms have been adopted.

Wealthy and developing nations had been at odds over the budget.

Developing countries objected to links between the budget and reform - a top priority for the US and EU.

A spokesman for Mr Annan said a package of management reforms would be presented by the end of February.

US ambassador John Bolton said the deal was a victory for his country.

US and EU diplomats have been pressing for management reforms at the UN and had suggested in November that a short-term interim budget should be adopted while reform proposals were worked out.

Link dispute

The Group of 77, which represents 132 developing nations, had wanted a $1.3bn cap.

Several other key members, including Egypt and India, objected to any link between the new budget and management reform.

Jamaica's ambassador Stafford Neil said the group was "unhappy" with the spending limit but decided to go along with it.

"We find unpalatable the fact that there is this axe hanging over our heads in terms of the spending limitation, but we will still go forward," Mr Neil said.

Mr Annan and a number of rich countries have been pushing for management reforms at the UN, following extensive allegations of corruption and mismanagement, particularly in its handling of the oil-for-food programme for Iraq.

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