Bush opposes UK Africa debt plan
The UK's plan to write off debts owed by African nations is facing opposition in the US - and particularly from President George W Bush.

Mr Bush said a key part of the plan did not fit with the US budget process.

Mr Bush's stance sets up a possible clash with UK Prime Minister Tony Blair, due in Washington next week.

The UK is pushing hard for major debt relief and a doubling of aid to Africa, and Chancellor Gordon Brown laid out a set of ambitious plans on Thursday.

This was a time for 100% debt relief not "timidity", Mr Brown said.

The UK has said that 2005 is a vital year for Africa, and argues that without significantly more money the United Nations' Millennium Goal of halving world poverty by 2015 will be impossible to meet.

'Agreement possible'

Speaking in Edinburgh, Mr Brown said he would present the proposals to the leaders of the G8 industrialised nations at a summit next month.

As well as 100% debt relief, Mr Brown wants to set up an International Finance Facility (IFF) to help pay for immunisation programmes in Africa


BROWN'S FOUR-POINT PLAN FOR AFRICA
100% debt relief to pay for education and health
Launch International Finance Facility for Immunisation
Large increase in direct development aid, doubling of aid from European countries
Removal of export subsidies and all trade-distorting support to agriculture, which work against producers in the developing world
Source: Chancellor Gordon Brown, 3 June speech

He also said that aid should be doubled to $80bn a year by 2010.

But the US remains concerned that the UK is proposing that the debt plans should be financed in part by selling gold reserves held by the International Monetary Fund (IMF).

A surge in the price of gold has boosted the value of the reserve, and the UK wants to use that extra cash.

The US - along with some other countries including Japan, Germany and Italy - has never been keen on the idea of selling IMF gold.

Washington DC has also raised questions over the IFF, which would allow developing countries to borrow against future aid pledges.

Mr Bush said on Wednesday that the IFF for Africa "doesn't fit our budgetary process".

Getting closer

According to Reuters, UK government sources have been talking about pressing ahead even without US involvement.

This is not a time for timidity nor a time to fear reaching too high
UK Chancellor Gordon Brown

Mr Brown played down reports of a rift or stand-off between the UK and the US.

"In my talks over the last few months, but particularly over the last day or two, with the US Treasury Secretary, we believe that there is common ground on securing that debt relief," he explained.

"We believe it is going to be possible to reach an agreement on debt relief."

"This is not a time for timidity nor a time to fear reaching too high."
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4606197.stm

Published: 2005/06/03 10:57:10 GMT