US formally writes off Iraqi debt

Australian Broadcasting Company ^ | December 17 2004 | AFP

[knighthawk]

The United States has formally written off all of its $US4.1 billion in Iraqi debt and urged other nations to follow suit as a critical move for the country's reconstruction.

Secretary of State Colin Powell, Treasury Secretary John Snow and Iraqi Finance Minister Adil Abd al-Mahdi signed the accord formalising the US commitment made to the Paris Club of Iraqi creditors last month.

The group of 19 creditors agreed to cancel 80 per cent of the approximately $US40 in debt owed them by the ousted regime of Saddam Hussein.

Washington went further and agreed to wipe out all its share.

Mr Powell and Mr Snow called on countries outside the Paris Club to provide a similar lifeline to the administration in Baghdad, which took office facing a total of $US127 billion of debt, according to Mr Mahdi.

"Lifting the crushing burden of the old regime's debt is one of the most important contributions we can make to Iraq's new beginning," Mr Powell told the signing ceremony in the State Department' ornate Benjamin Franklin room.

"This a tremendous victory, this is a victory for the Iraqi people," he said. "We urge other nations who are not Paris Club members to reach comparable agreements on Iraqi debt relief."

Mr Snow called the debt relief measure "another critically important milestone on the path to prosperity in Iraq" but added that "it's clear more is needed."

He said the United States stood ready to help other countries reach debt-cancellation accords.

Iraq's Paris Club of creditors, which includes the United States, Japan, Russia and European Union nations, agreed on November 21 to gradually wipe out 80 per cent of the money it was owed.

It said the accord, which would reduce Iraq's debt to the club to about $US7.8 billion in three years, was intended to ensure Iraq's "long-term debt sustainability".

Iraqi Prime Minister Iyad Allawi welcomed the agreement but expressed hope that the remaining 20 per cent would be forgiven and Arab creditors would also do their part to help his country.

[knighthawk]

Ping

[natewill]

What's 4.1 Billion Dollars nowadays? It's only pocketchange. Sure, we could've paid off a smidgen of our national debt, or refunded more tax money, or bought every American citizen a new Lexus, but in the end the money went to a good cause. /Sarcasm off

[exnavychick]

Those greedy twerps will never cancel the debt...that's why they were still conducting back-room deals with him after the sanctions were in place. They aren't interested in helping the Iraqi people get back on their feet and be solvent (when they helped contribute to the problem, IMO) when they could stick them for much more lucrative interest payments on their accrued debt.

[Anitius Severinus Boethius]

or bought every American citizen a new Lexus

Hmmmm, 4.1 Billion divided by 380 million Americans is around $10.75 each. Where can I find that magic Lexus dealership?

[SJSAMPLE]

We knowingly dealt with Saddam Hussein, for whatever reasons, right or wrong. It's unfair to saddle the Iraqi people with a debt incurred by a tyrant that we supported (at the time). France and every other country that lent money to the tyrant should do the same.

[aspiring.hillbilly]

We sure could use $4 billion of Iraqi oil here, and since they have it in the ground why cancel a debt that can be paid just by pumping the money out of the ground? To forgive that debt means it will be placed on the long suffering backs of American taxpayers. Sec. Powell,,what are you thinking in your lame duck frame of mind??

[Orange1998]

What about all the debt the American citizens are burden with for ousting Saddam. Who is going to pay it. The Iraqi's should gladly pay back all monies (albeit delayed to the future) to get rid of the tyrant.