The UN General Assembly, at the insistence of the United States and others, adopted an unprecedented budget with a spending cap aimed at pressuring countries into approving reforms within six months.
Under the deal, the 191-member assembly passed a resolution early yesterday for a two-year, $3.8 billion administrative budget, thereby averting a financial crisis.
But the resolution capped UN spending at $950 million, which is enough only for the first six months of 2006. After that, Secretary-General Kofi Annan will have to ask the assembly for more funds to pay staff.
Claiming victory, US Ambassador John Bolton told reporters, "This evening the United States obtained something it had been striving for the last three months, which is a clear linkage between management reform and the budget process of the United Nations."
But British Ambassador Emyr Jones Parry, whose country holds the European Union presidency, said the budget was a victory for the United Nations and pointedly noted that the EU had carried the burden of 95 per cent of the negotiations.
The EU objective, he said, was to "avoid confrontation but give an impetus to the reform process."
Nevertheless, developing nations, angry at what they called undue pressure from the rich, refused to link reforms to budget approval in June, which is not stated in the text.