German firms face Iraq debt losses
17 December 2003
BERLIN – German firms face big losses if Germany writes off Iraqi debts, with many unpaid claims dating back to the 1970s, the business daily Handelsblatt reported Wednesday.
The report said if the government agrees to debt forgiveness companies, particularly those in the construction industry, would have little chance of recovering their money, as many projects were only partially covered by state-backed credit insurance.
Handelsblatt said at issue is not only the USD 4.4 billion which Iraq owes Germany, but also USD 1.4 billion owed to German firms involved in Iraq’s ambitious infrastructural projects.
The paper cited a spokesman for the construction company Strabag as saying: “We are fundamentally opposed to debt forgiveness.”
The company’s claims on Iraq amount to EUR 407 million, though for accounting purposes Strabag has already written off a part of that sum.
The Handelsblatt report came a day after a spokesman for German Chancellor Gerhard Schroeder said Berlin, Paris and Washington all agreed that cutting Iraq debt was necessary to help get the country back up on its feet.
Subject: German news