Posted on 09/24/2004 12:15:09 PM PDT by Michael Goldsberry
WASHINGTON (Reuters) - A Bush administration official suggested on Friday that Iraq (news - web sites) may not need to repay $45 billion in debt claimed by Gulf countries because the funds were grants to help Iraq in its war with Iran in the 1980s.
The money claimed by the Gulf Arab states is a substantial part of the estimated $120 billion Iraq owes other states and eliminating it would significantly ease the country's burden.
The United States, committed to rebuilding Iraq despite a deadly insurrection, is trying to work out an agreement between Baghdad and its creditors to allow it to use its money for reconstruction rather than for servicing old debts.
U.S. officials hope to reach a deal with the 19 members of the Paris Club of creditor nations for Iraq, but the Gulf states fall outside of this group.
Referring to the funds given to Iraq by the Gulf states, Deputy Secretary of State Richard Armitage told a House of Representatives subcommittee hearing, "There's no paper on it because it was given when Iraq was fighting Iran."
He added, "It was provided as a grant because of the war at the time."
Armitage was testifying on President Bush (news - web sites)'s request to shift $3.46 billion in U.S. aid from Iraqi reconstruction projects to improve security and prepare for elections.
As part of that request, Bush asked Congress to set aside $360 million to cover costs of forgiving 95 percent of Iraqi debt owed to the United States. The figure represents the current estimated amount of the debt, largely run up during the 1980s.
The administration wants the money to be reprogramed quickly so that Washington can go to an Oct. 12 Paris Club meeting with U.S. debt reduction complete. There will be further Paris Club meetings in November and December.
Armitage admitted that most other creditors would not be prepared to write-off as much as 95 percent of the debt owed to them. But he was optimistic that Japan would be generous.
"I have very good faith that the Japanese will step up ... less faith that the others will be as generous," he said.
Sounds to me like Iraq should have a zero balance.
That's exactly what I was thinking.
That's what you get when you loan money to a dictator.
HAHHAHAHAHA......now this is funny!....LOL
"Bush asked Congress to set aside $360 million to cover costs of forgiving 95 percent of Iraqi debt owed to the United States."
Unbelievable. The government can't even give money away without it costing even more money. It's insane...
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