Cash-strapped UN unable to refund Britain

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New York

Britain has not been reimbursed for its contributions to peace-keeping missions in Bosnia and around the world since February, because of the rapidly spiralling budget crisis at the United Nations, sources revealed yesterday.

With no prospect that repayments will be resumed before year's end, Britain is already owed more than pounds 20m by the UN. At the same time, the Government continues to foot the bill for participating in peace-keeping operations such as those in the former Yugoslavia, Cyprus and Angola.

The extent of the UN's budgetary plight, which is certain to overshadow the organisation's General Assembly which opens in New York next week, was spelled out in an unusual internal memorandum from the Secretary-General, Boutros Boutros-Ghali, and circulated to all UN staff yesterday.

The Secretary-General revealed that cash in the UN's regular budget ran out in mid-August. Since that time he has been raiding the separate budget set aside for peace-keeping missions just to keep the organisation afloat. Reimbursements to 80 UN member states for peace-keeping costs have thus been suspended.

The crisis has arisen because of non-payment by some members of their share of the UN budget. In all, the UN is owed $3.7bn (pounds 2.4bn) for both its regular budget and peace-keeping, more than a full year's normal spending.

By far the worst offender is the United States, which owed the UN $1.6bn as of this week. The failure of the US to pay its UN dues is becoming a serious political irritant to other member states, especially those of the European Union. This year, the 15 EU members have provided over half the UN's income.

Announcing measures to cut spending, including a freeze on new recruitment, Mr Boutros-Ghali told staff: "I know you will understand the seriousness of the situation we face."

Britain, which has paid its dues, should be reimbursed pounds 2.2m a month for its troops in Bosnia, but the last payment received was for last February. Nothing has been paid for equipment and transport costs in Bosnia since last October. Logistical and equipment costs incurred in Rwanda last year have still not been repaid and the UN is more than a year late in covering some costs related to British role in Cyprus.