Gulf Daily News
April 25, 2004

France is prepared to cancel some of Iraq’s total external debt, estimated at more than $120 billion, French Finance Minister Nicholas Sarkozy said yesterday.

“The United States believes (the debt) should be massively cancelled as rapidly as possible,” he said.

“We quite agree to cancel a portion (of the debt),” he said.

“No one rejects the idea of easing the debt load.”

But he noted that “Iraq has the world’s second largest oil reserves. It is difficult to explain that we are going to cancel 100 per cent for Iraq and 50pc for the others. Can we find a way out?”

Sarkozy after his talks with US Secretary of State Colin Powell stressed that the positions of France and the US on the Iraqi debt question were not “irreconcilable.”

Iraq’s debt to France is estimated at $3bn.

Earlier, US Treasury Secretary John Snow welcomed progress on economic issues in Iraq after meeting the country’s finance minister and central bank chief.

Snow said in a statement that he and Federal Reserve Chairman Alan Greenspan “had a very positive and constructive meeting” with Iraq’s Finance Minister Kamel Gailani and Central Bank Governor Sinan Al Shabibi.

“Both Iraqi officials reported that economic progress continues to take place in their country and I was pleased to hear about the ongoing economic and financial reconstruction,” Snow said.