Putin says Russia may forgive Soviet-era Iraq debt

reuters ^ | 4/11/03

[knak]

ST PETERSBURG, Russia, April 11 (Reuters) - Russian President Vladimir Putin said on Friday Moscow was ready to consider Washington's call for it to forgive Baghdad some $8 billion in Soviet era debt.

"On the whole the proposal is understandable and legitimate. In any event, Russia has no objection to such a proposal," Putin told a news conference alongside German Chancellor Gerhard Schroeder and French President Jacques Chirac.

"I believe that we could begin to discuss the principles of this issue at the G8 summit in Evian. In any case, we are ready to do so," he said, referring to a June meeting of the Group of Eight leading industrial nations in France.

U.S. Deputy Defense Secretary Paul Wolfowitz said on Thursday Russia, France and Germany could contribute to rebuilding Iraq by writing off some or all of the loans they made to Iraq under President Saddam Hussein.

Most estimates put Iraqi debts to Russia and France at about $8 billion each, mostly for contracts concluded in the 1980s, but some analysts say Moscow could be owed up to $12 billion.

Germany's Finance Ministry said on Friday Iraq owed Berlin a sum just short of four billion euros ($4.3 billion).

Germany and France, members of the Paris Club of creditor nations alongside Russia, have said it is to early to discuss debt.

"It is clear that a legitimate government must be in place and in contact with the Paris Club," Schroeder told reporters. "Then this issue can be discussed, but not before."

Putin, however, said Russia was open to the U.S. proposal.

"We are ready to examine this issue, but there is a specific procedure in accordance with the World Bank and the International Monetary Fund. It involves talks conducted within the context of the Paris club," Putin said.

Putin's largess is unlikely to be welcomed by the Russian parliament or by the Russian Finance Ministry, which said earlier on Friday Iraq should fulfil its obligations. Russia itself faces a debt repayment peak of $17 billion in 2003.

"The problem of Iraqi debt is a subject for international, multilateral talks which should take into account Iraq's real economic potential," Deputy Finance Minister Alexei Ulyukaev said earlier on Friday.

"In a nutshell, it is necessary to ensure Iraq fulfils the obligations it took upon itself."

The Paris Club is an informal forum for 19 creditor nations to discuss rescheduling debts to developing countries.

Iraq is though to face some $142 billion in enforceable debt claims as well as up to $300 billion in reparations outstanding from the invasion of Kuwait.

[dfwgator]

Putin, however, said Russia was open to the U.S. proposal.

Depends on how much $$$ the US will offer Russia.

[Ernest_at_the_Beach]

I am surprised!

OFFICIAL BUMP(TOPIC)LIST

[knak]

Is this what Condi was there for?

[Freedom4US]

Great, now maybe Russia can pay off all those Czarist bonds they reneged on in 1917! Great Britain will be ecstatic, I'm sure.

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[CoolPapaBoze]

Good call Vlad, you know, since I don't think Saddam is going to be able to find his check book (or his a** for that matter) anytime soon.

[johniegrad]

I hope that's not what this BS boils down to. We are paying for the cost of prosecuting the war and that's fine with me. I don't want to be paying Iraq's debts to Russia, France, and Germany. The SOBs opposed the action, they should lose out on their investments.

[XJarhead]

I'll give Putin credit for this. The great thing is that France and Germany will look like crap if they don't go along with it.

Of course, Putin may also be bright enough to know that debt forgiveness may be a way to elbow into some say as to what happens in Iraq.

[witnesstothefall]

Condi is a lowkey but excellent communicator.

[Shermy]

Paris Club web site link.

[Alberta's Child]

I think you missed the point. For at least some of these nations, their opposition to the war was based on their concern that any "new Iraq" would immediately default on these debts.

Russia has every reason to hold out for whatever money they were owed by Saddam Hussein's government.

[toddly]

If they let all those billions go Russia Germany and France. I would actually consider letting the UN take part. We could still veto any funky stuff they wanna try and at the same time let THEM police the place.

[adam_az]

"It is clear that a legitimate government must be in place and in contact with the Paris Club," Schroeder told reporters.

[toddly]

We should tell him money first, then we'll talk aye?

[toddly]

oops, that reads as sarcastic. I meant they should forgive the debt 1st, then we'll consider things.

[Conservababe]

He might as well forgive the debt as he ain't never going to get the money.

[toddly]

this is true.

[supercat]

For at least some of these nations, their opposition to the war was based on their concern that any "new Iraq" would immediately default on these debts.

If they were concerned about that, they should have publicly made their agreement to assist contingent upon their being repaid.

[witnesstothefall]

Not France. They have to stay in the box for a period, sufficient to achieve effective regime change in Paris. Gerhard the Blowhard will fall of his own accord at the next possible opportunity.

Putin is much more tricky of a problem. He is too enigmatic for the times, I fear. But since he borders half our sworn enemies, we have to find a way to work substantively with the smiley commie.