Martin Crutsinger

January 5, 2004

(Associated Press) What to do about Iraq’s massive debt is expected to be a top discussion topic next month when top finance officials of the world’s seven richest industrial countries meet in Boca Raton, Fla.

U.S. Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan will be hosts at the Feb. 6-7 discussions with their counterparts from Japan, Germany, France, Britain, Italy and Canada, the Treasury Department said Monday.

Treasury officials would not reveal details about topics on the agenda, but Iraq’s debt was almost certain to come under discussion after a successful mission by former U.S. envoy James A. Baker III, a former secretary of state and treasury, to win pledges of debt relief from a number of nations.

The administration has welcomed the responses Baker received during a series of trips to Europe and Asia last month seeking commitments on reducing Iraq’s burden, estimated at more than $120 billion. Of that amount, Iraq owes $40 billion to the 19 members of the Paris Club, which coordinates debt negotiations among its wealthy members including all the G-7 nations.

Last week, in Asia, Baker won a pledge from Japan for substantial debt relief, and Chinese officials promised to consider the U.S. request.

Earlier in December, several European nations pledged support for debt relief, including France, Germany and Russia, three countries that opposed the U.S.-led invasion that ended President Saddam Hussein’s government.

Japan abandoned its earlier reluctance to join debt relief after Baker met with Japanese Prime Minister Junichiro Koizumi. Japan offered to forgive “the vast majority” of Iraq’s debt in the coming year if other members of the Paris Club do so.

Japan said this month that Iraq owes it $4.1 billion, or $7.76 billion with interest and penalties.

Other issues expected to be on the agenda for the G-7 meeting are how best to work together to cut off financing to terrorist groups and the state of the global economy, including the continued drop in the value of the U.S. dollar against other major currencies.

The meeting also will help set the agenda for the annual leaders’ meeting of the Group of Eight nations, the seven richest industrial countries and Russia, which will be this summer at Sea Island, Ga.