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UN agrees to cap spending in push to change management

$950m limit called victory by US ambassador

UNITED NATIONS -- The UN General Assembly late yesterday passed a budget with an unprecedented spending cap aimed at pressuring countries into approving management and other reforms within six months.

Under the deal between wealthy and developing nations, the assembly adopted a resolution for a two-year, $3.8 billion administrative budget, thereby averting a financial crisis.

But the resolution capped UN spending at $950 million -- enough only for the first six months of 2006 -- after which Secretary-General Kofi Annan has to ask the assembly for more funds to pay staff.

The 191-nation General Assembly's decision, after months of arduous negotiations, was taken by consensus, without a vote.

Several nations, including Egypt, India, and Jamaica, refused to link reforms to the budget. But US Ambassador John Bolton said this was implicit since the General Assembly would have to approve additional funding in six months time.

Bolton called the pact a victory for the United States. He said Washington ''obtained something it had been striving for for the last three months -- clear linkage between management reform and the budget process at the United Nations."

But in a rare public disagreement, the European Union, currently headed by Britain, took credit for the compromise. British Ambassador Emyr Jones Parry told reporters that for ''95 percent of the time, it has been us [the EU]who have been building a bridge with the G-77," the UN grouping representing 133 developing nations.

The EU objective, he said, was to ''avoid confrontation but give an impetus to the reform process."

France was even blunter. Its UN ambassador, Jean-Marc de la Sabliere, said: ''The European Union was at the center of the game. The United States, Japan, and the G-77 were compelled to make compromises."

But Jamaican Ambassador Stafford Neil, representing the G-77 nations, said he had fought hard against the spending cap. But his group had reluctantly gone along after receiving assurances that the tactic was a one-time measure that would not be repeated in future years.

Negotiators had been working against a midnight Dec. 31 deadline for the General Assembly to either approve a budget plan or trigger a shutdown of the United Nations.

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