Friday, June 06, 2008

Your money or your independence

Today's Independent has more on the US's plan to permanently occupy Iraq, reporting that they are attempting to blackmail them into signing by threatening their foreign currency reserves. Currently, Iraq is still subject to UN sanctions as a "threat to international security", and so its oil revenues are held in trust by the US Federal Reserve. But that money is potentially the subject of several lawsuits in US courts, and the US is using this as leverage:

Iraq's foreign reserves are currently protected by a presidential order giving them immunity from judicial attachment but the US side in the talks has suggested that if the UN mandate, under which the money is held, lapses and is not replaced by the new agreement, then Iraq's funds would lose this immunity. The cost to Iraq of this happening would be the immediate loss of $20bn. The US is able to threaten Iraq with the loss of 40 per cent of its foreign exchange reserves because Iraq's independence is still limited by the legacy of UN sanctions and restrictions imposed on Iraq since Saddam Hussein invaded Kuwait in the 1990s. This means that Iraq is still considered a threat to international security and stability under Chapter Seven of the UN charter. The US negotiators say the price of Iraq escaping Chapter Seven is to sign up to a new "strategic alliance" with the United States.
So, having bombed their country into rubble and then bombed it some more just for kicks, the US is now threatening the money Iraq needs to rebuild in order to force them to become a client-state. It's "your money or your independence", international gangsterism at its finest.

And they wonder why people hate them...