Creditors to forgive 80% of Iraq debt

Germany's finance minister has said that he and his US counterpart have reached an agreement under which Iraq's creditors would write off up to 80% of the war-ravaged country's debt.

    The debt is tied to the International Monetary Fund

    "I had talks with my American colleague, John Snow, which created the basis on which the forgiveness of Iraqi debt can be settled mutually in the Paris Club" of creditor nations, Hans Eichel told reporters on Saturday on the sidelines of a meeting of ministers from the Group of 20 major economies.

    "We agreed that there should be a write-off of debts in several stages amounting to 80% in total," Eichel said.

    Thirty percent would be written off immediately, another 30% in a second stage "tied to a programme of the International Monetary Fund" and a further 20% linked to the success of this programme," he said.

    "Within this framework, the necessary decisions can now be taken in the Paris Club," Eichel said. He did not say when the debt write-off would be formally approved and took no questions.

    SOURCE: Agencies


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