Irag, I'll Scratch Your Back...

Baker may be able to unruffle some feathers. European firms haven't been completely shut out of the reconstruction: Siemens has a $95 million job supplying a power plant with a new gas turbine, and the German Chamber of Industry and Commerce says that about 90 percent of a major contract given to U.S. firm Bechtel in May has been outsourced to subcontractors, many of them European. Nevertheless, the European Commission declared it would carefully examine all 26 contracts at stake in preparation for a possible WTO appeal on the U.S. decision. The White House may soon have its hands full with more than the Pentagon.

Evan Thomas, John Barry and Stefan Theil

Afghanistan

A Crucial Council

How much power should a president wield? That's the big question for this week's Loya Jirga, or Grand Council, in Afghanistan. Despite threats of terror and a delayed start, some 500 delegates from across the country have gathered in Kabul to approve a new constitution that calls for a governing system dominated by a powerful president directly elected by the people. Unsurprisingly, the burden has fallen on current President Hamid Karzai to make the case for a strong executive branch. After all, his government drew up the draft constitution, which also calls for the country to unite under the banner of Islam, and the draft's approval would clear the way for the first democratic elections in Afghanistan's history next June.

It's not going to be an easy sell for Karzai. Many delegates are expected to demand a stronger Parliament to offset executive power, fearing a president turned despot. Karzai dropped the post of prime minister from the governing framework, and many want it back. But Karzai isn't bowing to the pressure. "A presidential form --of government is best suited for Afghanistan at this stage when the country lacks institutions," Karzai told NEWSWEEK. "The Constitution should be straight and focused to one power center."