Iraq's Odious Debts

Iraq calls for big debt write-off in Berlin talks
September 9, 2004

Berlin: Iraqi President Ghazi al-Yawer renewed calls for a big write-off of his country’s massive foreign debt at talks Thursday with German leaders in Berlin.

“Forgiving these debts is the most important theme on the agenda,” said President al-Yawer after talks with German President Horst Koehler.

Iraq has about USD 120 billion (EUR 98 billion) in foreign debt with the Paris Club of creditor nations. Baghdad and the United States want between 80 percent and 95 percent of these debts to be forgiven.

Germany holds about USD 5.3 billion of Iraqi debt.

Chancellor Gerhard Schroeder earlier this year said Berlin would be willing to write off debt under the auspices of the Paris Club – but he has not named any concrete figures.

In Paris, negotiations on Iraq’s debt are due to be held Thursday and Friday.

Al-Yawer said he was pleased by what he termed “the positive answers” to the debt question given by Koehler who was formerly head of the International Monetary Fund (IMF) in Washington. He gave no further details.

Koehler, who is Germany’s mainly ceremonial head of state, said his main wish for Iraq was “a return to security, stability and the chance for rebuilding.”

But Al-Yawer’s hopes for additional German rebuilding funds and the deployment of experts were rebuffed in later talks with Development Aid Minister Heidemarie Wieczorek-Zeul.

“The extremely difficult security situation makes it impossible to send experts to Iraq at present,” said Wieczorek-Zeul in a blunt statement, adding: “The very tight budget situation . . . bars any larger expansion of our engagement.”

Germany, she noted, had last year pledged EUR 200 million in rebuilding aid to Iraq.

President al-Yawer was meeting with Foreign Minister Joschka Fischer prior to early evening talks and a press conference with Chancellor Schroeder, who was a leading European opponent of the Iraq war.

Germany, said al-Yawer, plays a major role in the European Union as the bloc’s biggest state and third biggest economy in the world.

“We want to forge good relations . . . especially because of the important role of Europe in rebuilding Iraq,” he said speaking through an interpreter.

On Wednesday, Schroeder told the German parliament he would stand by his pledge not to send soldiers to Iraq.

“What I have said remains valid: we are not sending troops there,” said the Chancellor in a speech greeted with strong applause.

Germany’s main contribution to Iraqi security is a training programme for police recruits. Berlin, however, refused to allow police trainers work in Iraq and courses are taking place in the United Arab Emirates.

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