Associated Press
Khaleej Times Online
January 5, 2004

Prague: The Czech Republic is ready to write off one third of Iraq’s four-billion-koruna (125 million euros or 157 million dollars) debt, Prime Minister Vladimir Spidla said.

“It is in our interest to help Iraq so the situation there stabilizes,” he told Czech television late on Sunday. “Unless it does so, we will not see a single koruna.”

Almost all Iraq’s debt to the Czech Republic was for military supplies and only 100 million koruna (three million euros or 3.78 million dollars) for civilian exports, Spidla said.

The United States has being trying to convince other rich countries to restructure or forgive Iraq’s debt, which reaches 120 billion dollars according to some estimates.

Japanese Prime Minister Junichiro Koizumi told US envoy James Baker last week that his country, Iraq’s biggest creditor, was willing to “eliminate the vast majority” of the seven billion dollars it is owed, providing that other rich nations did likewise.

Diplomats said that Koizumi and Baker agreed that details about the scale of the debt reduction would be decided within the Paris Club, which also include Britain, France, Germany and Russia.