Last updated on: 6/2/2008 10:26:00 AM PST
Was Iraq's decision to change payment for its oil from dollars to euros a reason for the US to attack Iraq?
General Reference (not clearly pro or con)
The Cable News Network (CNN), in its Oct. 30, 2000 article "U.N. to Let Iraq Sell Oil for Euros, Not Dollars," stated:
"A U.N. panel on Monday approved Iraq's plan to receive oil-export payments in Europe's single currency after Baghdad decided to move the start date back a week.
Members of the Security Council's Iraqi sanctions committee said the panel's chairman, Dutch Ambassador Peter van Walsum, would inform U.N. officials on Tuesday of the decision to allow Iraq to receive payments in euros, rather than dollars.
U.N. Secretary-General Kofi Annan's office is to report in three months on the impact of the switch to euros, which a U.N. study said would cost Iraq at least $270 million.
Iraq's U.N. Ambassador Saeed Hasan reported earlier that Baghdad would delay the changeover until after Nov. 6, rather than put it into effect on November 1, as originally announced. Iraq has called the dollar the currency of an 'enemy state.'...
Iraq had also threatened to stop oil exports, the bulk of which flow through the U.N. humanitarian programme, if its request for payment in euros was denied...
Baghdad currently is selling about $60 million in crude a day, about 5 percent of the world's oil exports."
Oct. 30, 2000 - CNN
Ron Paul, MD, US Congressman (R-TX), stated in his Feb. 14, 2006 speech titled "The End of Dollar Hegemony" before the US House of Representatives:
"There was no public talk of removing Saddam Hussein because of his attack on the integrity of the dollar as a reserve currency by selling oil in Euros. Many believe this was the real reason for our obsession with
Feb. 14, 2006 - Ron Paul, MD
William Clark, MBA, MS, Manager of Performance Improvement at Johns Hopkins University, stated in his Feb. 15, 2003 MediaMonitors.net article titled "Revisited - The Real Reasons for the Upcoming War With Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth":
"Although completely unreported by the U.S. media and government, the answer to the Iraq enigma is simple yet shocking -- it is in large part an oil currency war. One of the core reasons for this upcoming war is this administration's goal of preventing further Organization of the Petroleum Exporting Countries (OPEC) momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves."
Feb. 15, 2003 - William R. Clark, MBA, MS
F. William Engdahl, consulting economist and author of A Century of War: Anglo-American Oil Politics and the New World Order, stated in an Oct. 31, 2003 Current Concerns article titled "A New American Century? Iraq and the Hidden Euro-dollar Wars":
"Until November 2000, no OPEC country dared violate the dollar price rule. So long as the dollar was the strongest currency, there was little reason to as well. But November was when French and other Euroland members finally convinced Saddam Hussein to defy the United States by selling Iraq’s oil-for-food not in dollars, ‘the enemy currency’ as Iraq named it, but only in euros...
This little-noted Iraq move to defy the dollar in favor of the euro, in itself, was insignificant. Yet, if it were to spread, especially at a point the dollar was already weakening, it could create a panic selloff of dollars by foreign central banks and OPEC oil producers. In the months before the latest Iraq war, hints in this direction were heard from Russia, Iran, Indonesia and even Venezuela...All indications are that the Iraq war was seized on as the easiest way to deliver a deadly pre-emptive warning to OPEC and others, not to flirt with abandoning the Petro-dollar system in favor of one based on the euro.Iraq was not about ordinary chemical or even nuclear weapons of mass destruction. The ‘weapon of mass destruction’ was the threat that others would follow Iraq and shift to euros out of dollars, creating mass destruction of the United States’ hegemonic economic role in the world."
Oct. 31, 2003 - F. William Engdahl
James Hamilton, PhD, Professor of Economics at the University of California, San Diego, wrote in a Mar. 2, 2007 e-mail to ProCon.org:
"I am aware of no reputable economist who claims that whether payment for Iraq's oil is conducted in euros rather than dollars would have any significant effect on any variable of interest to the United States. It would not affect the dollar price of oil, it would not affect the U.S. balance of payments, it would not affect U.S. inflation, it would not affect U.S. interest rates, and it would not affect the U.S. money supply.
A payment in dollars can perfectly well be made with 'Eurodollars', which refers to dollar-denominated deposits in foreign banks. These could be the assets of someone who does not live in the United States and the liabilities of a financial institution that is in no way affiliated with the United States, whose only connection to the United States would be the units (dollars) in which the account is maintained. Even if the payment were with actual U.S. dollars from a U.S. bank account, this at most introduces a strictly transitory demand for transactions balances whose effects are probably not worth discussing.
To suggest that anyone in the current U.S. administration believed otherwise, and indeed was so attached to this nonsensical proposition that they would have advocated that the U.S. go to war on this account, can only be described as fervent attachment to a conspiratorial delusion."
Mar. 2, 2007 - James D. Hamilton, PhD
Robert Looney, PhD, Professor of National Security Affairs at the Naval Postgraduate School, stated in a Nov. 2003 Strategic Insights article titled "From Petrodollars to Petroeuros: Are the Dollar's Days as an International Reserve Currency Drawing to an End?":
"Several general propositions emerge as to the likely introduction of a petroeuro and the U.S. motivation for the Iraq War:
1. For a number of technical reasons OPEC is unlikely to shift markets to euro-priced oil. There would be costs and inefficiencies involved, with no real significant benefits gained. The same applies to the buyers of oil.
2. There is good reason to believe that the euro's current appreciation vis-à-vis the dollar will not be sustained—the currency will have a hard time maintaining its current parity with the dollar. The euro's current strong value is taking a toll on euroland economic performance.
3. Even if the euro were to maintain its parity with the dollar, this would not cause the dollar to cease to be the international reserve currency. A two international reserve currency system is more unstable than one dominated by a single currency. Markets will move toward stability—and a currency with a historical track record.
4. The fate of the dollar and hence its use as an international reserve currency is largely in the hands of the United States—budget and trade deficits and low savings pose a greater threat to the use of the dollar as a reserve currency than any actions the EU or OPEC could undertake with regard to oil pricing.
5. Even though the United States may derive some economic benefit from having its currency serve as the dominant international reserve currency, the gains are not nearly as great as is often assumed—around 0.5% of GDP at best, much of which is offset by lost manufacturing exports and jobs associated with the strong dollar.It follows that the notion the United States undertook the Iraq war over its concern with the consequences of Saddam Hussein denominating Iraq's oil sales in euros (and the direction that might move other producing countries) is little more than another web-based conspiracy theory."
Nov. 2003 - Robert E. Looney, PhD