BRUSSELS - The European Commission said on Tuesday it hopes that a scheme allowing Iraq to sell oil to buy food, medicines and other humanitarian items will allow the European Union to phase out its own aid. "Provided the (United Nations resolution) is correctly implemented in the interest of all the Iraqi peoples, one should be able to envisage a reduction of other humanitarian aid to the country with a view to a cessation of (EU) activities in about 12 months' time," a Commission report said. The report was released to coincide with a news conference by the EU's humanitarian aid commissioner, Emma Bonino, who visited Iraq last week to assess the humanitarian aid situation. The EU is the biggest single provider of humanitarian aid to the country. Bonino said that the aid would only be stopped after evaluating whether the the U.N.'s "oil for food programme", allowing Iraq to export $2 billion of oil every six months in exchange for food and aid, was working. "What I'm simply saying is our reaction will d

epend on implementation of oil for food," she told the news conference. She said that her impression of Iraq was as a "dramatically rich" country -- enjoying good oil and water resources -- but where the people lived in "pathetic poverty" due to lack of respect for human rights by the regime there. Citing an example of the humanitarian aid problem, she said that although Irag had two major rivers running through it, the water was unuseable as it had not been treated. She said that in the centre and south of the country the situation as regards medical supplies was "fraught". Iraq's Deputy Prime Minister Tareq Aziz, in an interview published on Monday, urged the European Union to put pressure on the United Nations to lift all trade sanctions imposed after its invasion of Kuwait. The United Nations imposed strict trade sanctions on Iraq after its invasion of Kuwait, including a ban on exports of Iraq's oil. Bonino said that the amount of humanitarian aid available to Iraq was very large for a country of

21 million people.