Paris Club 'to announce reduction of Iraq debt'

14th September 2004, Comments 0 comments

PARIS, Sept 13 (AFP) - The Paris Club of creditor nations has agreed in principle to a major reduction of Iraq's outstanding debt, with a final announcement expected before the end of this year, a source close to the matter told AFP on Monday.

PARIS, Sept 13 (AFP) - The Paris Club of creditor nations has agreed in principle to a major reduction of Iraq's outstanding debt, with a final announcement expected before the end of this year, a source close to the matter told AFP on Monday.  

Officials from the Paris Club's 19 members, including the United States, France, Russia, Germany and Japan, met last week and agreed to cut Iraq's estimated USD 120 billion (EUR 97.9 billion) of debt by at least 50 percent, the source said.  

However, the club members were still debating whether to cut Iraq's debt immediately by 95 percent, a proposal supported by the US and Britain, or by 50 percent as a first step, as called for by France, Germany and Russia.  

Paris Club members hold about EUR 40 billion of Iraq's debt including interest, with most held by countries in the Middle East. Saudi Arabia is Iraq's largest foreign creditor.  

The members were also told that Baghdad may reach a post-conflict agreement with the International Monetary Fund (IMF) in the coming weeks, which could be finalised with the IMF board by the end of October, the source said.  

Such an agreement could lead to an emergency IMF aid package worth up to USD 850 million, although Baghdad would first have to settle its outstanding USD 80 million debt with the fund.  

IMF emergency funds are attributed in consultation with the Paris Club and the principal donors for the country concerned.  

The IMF and the World Bank are to due to hold their general assemblies in Washington on October 2-3.

© AFP

 

Subject: French News

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