Reuters
Forbes.com
November 16, 2003

London: U.S. Treasury Secretary John Snow said on Sunday he was confident France would help a U.S.-led drive to speed up Iraqi reconstruction by helping to ease its severe debt load.

France has led opposition to U.S. policy in Iraq, blocking a U.N. resolution to back war, then calling for a swift transfer of power to Iraqis. Paris also declined to give any new money for Iraqi reconstruction at a donor’s conference last month.

The World Bank estimates Iraq owes some $120 billion, an amount Washington has said should be substantially forgiven in order to give Iraq a better chance at rebuilding its economy.

“We talked primarily about the debt side and I think France will be very forthcoming on the debt side,” Snow told reporters after travelling to Britain from France where he met French Finance Minister Francis Mer on Sunday.

Some countries maintain Iraq’s oil reserves should enable it to pay its debts. Some, including Germany, have said a temporary freeze on debt servicing costs might be possible, but not outright forgiveness.

Snow did not say whether France might forgive Iraqi debt or relieve its debt burden in another way, nor did he give any figures. Iraq owes France $2.994 billion in principal.

He said the accelerated timetable for transferring power to a provisional Iraqi government was well-received by Mer. “He seemed to be encouraged by it, he thought that was a positive step.”

Snow said he and Mer discussed the role of the Paris Club – a group of industrial countries that considers sovereign debt restructuring and cancellation – in trying to ease Iraqi debt.

He said France’s chairmanship of the Paris Club gave it some influence over it. Iraq’s debts to the Paris Club are estimated by the group at around $21.018 billion. Snow, in Europe on a four-day trip to France and Britain, is due to meet British government officials including Chancellor of the Exchequer Gordon Brown. The two are to travel together to Birmingham on Tuesday where Snow is scheduled to address the Confederation of British Industry business group.