Iraq's Odious Debts

Paris Club favors ‘individual treatment’ of Iraqi debt cut

September 14, 2004

Paris: The Paris Club of creditor nations didn’t arrive at a consensus on the exact amount of Iraq’s debt to be canceled, but agreed in principle to an individual treatment of this debt cut, the French Foreign Ministry announced Tuesday.

Paris, like Berlin, hopes to cut Iraq’s debt by at most 50 percent, while Washington hopes to cut it by at least 80 percent.

“There is however a consensus on the fact that Iraq’s debt is unbearable and that Iraq should benefit from the Evian approach decided at G8 summit in 2003,” Foreign Ministry’s spokesman Herve Ladsous said.

This approach offers the possibility to allow an individual treatment of the debt cut to non-HIPC countries (countries don’t belong technically to Heavily Indebted Poor Countries), according to the spokesman.

Iraq’s debt is estimated at 120 billion dollars (about 100 billion euros), including 21 billion dollars owned to the Paris Club and between 60 to 75 billion dollars to other creditor countries notably from the Middle East, said Ladsous.

“France’s positions as fixed by French President (Jacques Chirac) remain the same, but there will be other discussions,” he said.

The Paris Club, which plays a leading role in Iraq’s debt treatment, groups 19 countries: Germany, Australia, Austria, Belgium, Canada, Denmark, Spain, the United States, Finland, France, Ireland, Italy, Japan, Norway, Holland, Great Britain, Russia, Sweden and Switzerland.

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