Posted on 11/20/2004 4:36:11 AM PST by Arkie2
BERLIN (AP) - Germany's finance minister said Saturday that he and the U.S. Treasury Secretary have reached an agreement under which Iraq's creditors would write off up to 80 percent of Iraq's debt, capping a months-long U.S. push for debt forgiveness. Finance Minister Hans Eichel said a meeting with Treasury Secretary John Snow "created the basis on which the forgiveness of Iraqi debt can be settled mutually in the Paris Club" of creditor nations, which is owed about $42 billion by Iraq.
"We agreed that there should be a write-off of debts in several stages amounting to 80 percent in total," Eichel told reporters on the sidelines of a meeting of ministers from the Group of 20 major economies.
Thirty percent of Iraq's debt would be written off immediately, another 30 percent in a second stage "tied to a program of the International Monetary Fund" and a further 20 percent "linked to the success of this program," he said.
"Within this framework, the necessary decisions can now be taken in the Paris Club," Eichel said. He did not elaborate and took no questions.
The German-U.S. agreement was being discussed Saturday by the Paris Club and "our expectation is that it will be accepted," said Eichel's spokesman, Joerg Mueller.
The United States has been pushing for a generous debt write-off for Iraq, trying to win support for wiping out as much as 95 percent of its debt.
However, other governments, including Germany, have questioned whether a country rich in oil should benefit from huge debt reduction. France, which strongly opposed last year's U.S.-led war to oust Saddam Hussein, has previously proposed that the Paris Club write off half of the debt, postpone debt service for three years and revisit the issue when Iraq's economy is in better condition.
Iraq has said its overall foreign debt of $122 billion is hindering postwar reconstruction.
The Paris Club of creditor countries includes Austria, Australia, Belgium, Britain, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland and the United States.
Iraq also owes $80 billion to various Arab governments.
Eichel was keen to stress that the planned Iraqi debt write-off "is not a precedent for any other case."
"We only see a special situation for Iraq," he said.
This is VERY good news!!!
Actually, the US was looking for more in the way of debt forgiveness. Plus, I'm not sure the French are going to accept 80%. They will do whatever is in their power to see a Democratic Iraq fail.
Has old europe ever repaid the debts it owes to the USA from World Wars 1 and 2?
Don't think so.
Yup.
England paid off all loans soon after 2000.
Dunno about the rest of Europe
Ah yes, but those were Lend-Lease debts. World War 1 is a different story:
http://www.encyclopedia.com/html/w1/wardebts.asp
"This article discusses the obligations incurred by foreign governments for loans made to them by the United States during and shortly after World War I. For international obligations arising out of World War II, see lend-lease . As early as 1914 the United States began to extend credits for the purchase of American goods to the European Allies, and in 1915 the first of many long-term war loans was made to the Allied powers. In addition to loans made during the war itself, loans and credits were extended for several years after the armistice, both to allied and former enemy nations. All the debtor nations except Russia (where the USSR had replaced the Russian Empire) recognized their obligations. In 1922 the World War Foreign Debt Commission of the United States negotiated with 15 European countries and set the funded indebtedness, based on capacity to pay, at slightly more than $11.5 billion. A 62-year period of repayment was arranged for, and thus principal and interest charges would have amounted to more than $22 billion. The United States refused to reduce the debt further, but the serious European financial situation caused U.S. agreement on some reductions in 1925-26. Payments were made until 1931, largely out of the reparations that the Allies received from Germany. In 1931, in the face of the worldwide economic depression, President Hoover's proposal for a one-year moratorium on all intergovernmental obligations was adopted. In the Lausanne Pact of 1932 the debtors greatly reduced German reparations in the hope that the United States would release all claims. The United States refused. Six countries made token payments in 1933, but in 1934 all the debtors formally defaulted except Hungary, which paid interest until 1939, and Finland, which continued to pay in full."
Ok you got me.
The Check is in the post.
"England paid off all loans soon after 2000.
Dunno about the rest of Europe"
(West)Germany paid back all Marshall Plan loans
by 1967 or so...
Hun
According to its federal debt authority, Germany has paid off its debts of the time before 1944 by the year 1983. The debts of the early post-war years will be paid off by 2010.
Will the debts really be forgiven...or will creditors simply collect from the International Monetary fund (us)?
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