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Germany, France won't pledge funds at Iraqi conference

Iraqi leader warns of possible backlash

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Rebuilding Iraq is expected to cost around $55 billion.

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The U.S. is asking nations for more financial help to rebuild Iraq.
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Iraq will need $55bn for reconstruction alone over the next five years, according to one estimate.
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U.S. Secretary of State Colin Powell is looking for as much money as he can get at the conference.
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MADRID, Spain (CNN) -- The level of Germany and France's participation in an international conference aimed at raising more funds to rebuild Iraq prompted reaction Thursday from a top Iraqi official, who warned of a possible backlash.

Ayad Allawi, the current head of Iraq's U.S.-appointed governing council, said he hoped German and French officials would reconsider their decision not to boost their contributions beyond funds already pledged through the European Union.

"As far as Germany and France are concerned, really, this was a regrettable position they had," Allawi said. "I don't think the Iraqis are going to forget easily that in the hour of need, those countries wanted to neglect Iraq."

U.N. Secretary-General Kofi Annan -- also attending the conference -- urged the international community to give billions of dollars to rebuild the nation, saying reconstruction cannot wait until a sovereign Iraqi government is established.

"The people of Iraq have a hard road ahead of them, filled with both risk and opportunity," Annan said at the opening of the summit Thursday. "Let us not leave them to travel that road alone."

But some countries have balked at funding programs in post-war Iraq, because of the go-it-alone approach taken by the United States and Britain ahead of the war.

Germany, France and Russia -- the chief opponents of war before the United States launched its attack and among the most reticent to sign onto the U.S.-backed reconstruction plan -- have sent lower level officials to the Madrid conference. Those countries have been opposed to what they see as too much U.S. control of the reconstruction process.

But the secretary-general said the international community must shoulder this opportunity to help Iraq.

"The long-term challenge of reconstruction has to be faced by all of us," Annan said. "The assessment prepared by the United Nations and the World Bank depicts a country with reconstruction needs on a monumental scale."

The United States has committed $20 billion to the effort.

Powell said Wednesday he didn't expect the conference to raise enough funds to finance the entire reconstruction program. The U.S. puts the figure at $55 billion over five years. "There will always be a shortfall," he told reporters.

"We assessed that it was going to cost something like $36 billion over the next four years," said Mark Malloch Brown, head of the U.N. Development Program.

"Iraq is a rich country and as soon as its economy is moving again a lot of these financial needs can be met by Iraq itself. We particularly are really focused on what you need for the next year or so before Iraq has a sovereign government and can go back and borrow money to finance a lot of this for itself in the future."

Chris Patten, the European Union's external relations commissioner, said the EU is prepared to outline a "medium-term strategy for Iraq, including further financial commitments" in March 2004.

"Whether we can spend the money we've already pledged will depend a great deal on the security situation," Patten told CNN. "We will have to make some judgments next year about the security situation as well as about the political transition."

Earlier this month, the EU announced a pledge of 200 million euros ($233.5 million) in reconstruction aid.

At least 58 nations have committed to the donors' conference, Spanish officials said ahead of its start. But only 17 nations -- including the United States, Japan, Saudi Arabia, Iran and host country Spain -- sent foreign ministers. The other nations are being represented at a lower level, according to Ramon Gil Casares, Spain's Secretary of State for Foreign Affairs.

Thursday's session in Madrid was devoted to technical issues such as reviewing a needs assessment plan drawn up by the U.N. Development Group and the World Bank with assistance from the International Monetary fund.

Additionally, Iraqi authorities are available to answer questions.

Friday's session will be more political in nature as the international representatives negotiate over the amounts of money to put into the trust fund.

Spanish Economy Minister Rodrigo Rato said last Friday he hoped $15 billion to $20 billion would be raised, but Foreign Minister Ana Palacio told CNN last week that as little as $6 billion could be raised for a trust fund that the World Bank, United Nations and Iraqi authorities would manage.

But Malloch Brown warned not to be too quick to sell the conference short: "I think they'll raise enough money, not just from the U.S., but from Spain, Japan particularly, Gulf states, from the World Bank and from others to be able to finance the critical needs over the next year or so."

CNN Madrid Bureau Chief Al Goodman contributed to this report.

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