Can Sadam alone do this? I was given to understand that the petro-dollar existed as a result of an agreement of a group of oil producing nations, I'm not sure that only one nation can really do such a thing.
I have no clue if it can be done, thats partly why I posted this thread.
But I assume it can be done. If a nation decides it wants to be paid in euros for its goods, I don't see why it couldn't. Of course there can be several reactions on this like an embargo etc.
If he could and did then I imagine that this would have a destabilizing effect on the world economy, as RMC said this may inflate the euro, which may adversely affect european exports, also determining the value of oil may be harder to do now as depending on who you buy from it could have a different value as it is pegged to two different currencies which can value or devalue independent of each other.
I think you mean appreciate the Euro and yes I think it would both that as depreciate the Dollar. It will be somewhat harder to determine the exact value of oil, but the free world market would easilly find a solution to this.
Then there is the possible negative effect on the US economy which would invariably hurt the global economy. Then you have the combined effect of a hurt US economy and a weakened dollar which would devalue Chinese backing of US debt. Finally, this could lead to other oil producing nations that are unfriendly to the US doing the same, so Iran and Venezuala would also be on the petro-euro.
Come to think of it you may see significant international pressure on Saddam to not pull such a move, perhaps a threat to boycott the oil if he does do it, since both the EU and chinese under such circumstances would have a vested interest in not seeing this happen.
Maybe you have a point here. It will negatively effect the US (and China because of the interconnected Yuan-Dollar), because it will have some destabilising effect on the dollar, but because of this I think it could be benificiary for the EU though. With virtually all of the World oil still being sold in $, oil imports will become cheaper for the EU because of the depreciating $. On the other hand it would in the same way disadvantagely affect EU exports.
Am I wrong or forgetting things?
With the sudden depreciation of the dollar could it lead to an earlier financial crises?
He doesn't have any clout at this point... Iraq is lucky to produce 3 million barrels a day, and he's still not allowed to sell the stuff. If the Europeans decide they'll let him sell it in Euros, the US will crucify them in public opinion in Europe as well as North America, saying they're letting a mass murderer sell oil to fund his regime simply because it benefits their economies. Heads will roll electorally.
The EU has no say in who can sell what in their currency. Its not like Saddam is only willing to sell to the EU, it will sell to anyone as long as they are paid in Euros. The food for oil program could be stopped under pressure of the US and an international blockade could be initiated, but on what grounds? Especially if the embargo holds, the direct effect wouldn't be that big, but Saddam
could have just released a box of pandora and the beginning of the end of the Dollar as THE world currency, when Iran and Venezuela would decide to do the same as Dan Reilly stated. Something the US will not treat lightly.
Once the UN weapons inspectors have finished, the biggest stick the US have to wave is gone so there will be some pressure to allow the sale of oil again.
On top of that, if reparations are owed, they have to be financed somehow. In practice, Saddam threatned a few times to use Euros instead of the US Dollar, but I think he was cajoled, very quietly back into line by the Saudis.
Yeah thats why I am interested in this.
How did/would the Saudis achieve this?
when it turns out it actually has happened!