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PARIS - France does not support writing off Iraq's nearly $122 billion in debt, though Paris will consider a substantial reduction, French officials said Tuesday. Iraq's interim finance minister, Adel Abdul-Mahdi, met with Finance Minister Nicolas Sarkozy in Paris to discuss Iraq's debts. The United States has been trying to persuade international lenders to write off Iraqi debt to help the country's postwar reconstruction. But France says it supports a substantial reduction of the debt but not by more than half. "The situation of Iraq, which has considerable potential resources, cannot be compared to other poorer, more indebted countries," said...

<p>During and after World War I, the U.S. extended a substantial amount of credit to its European allies. In 1922, the U.S. and 15 European countries agreed on a total indebtedness of about $11.5 billion -- slightly more than $4 billion for France. Payments were made until 1931, mostly from German war reparations. Then the Depression led Hoover to declare a one-year moratorium, and by 1934 all but two of the countries defaulted. As of last December, according to the U.S. Treasury, principal and interest due on the French debt amounted to about $11.8 billion, or about twice what France may be owed by Iraq.</p>

<p>President Bush told cheering Iraqi Americans Monday that the United States would defeat not just Saddam Hussein but "the dictator's legacy." In Baghdad, Iraqis meeting to discuss the formation of a new government agreed that one of the worst parts of that legacy would be Iraqi debt.</p>

Tue April 29, 2003 11:26 AM ET By Alan Elsner WASHINGTON (Reuters) - Some in the U.S. administration are pushing to invoke a controversial financial doctrine to free Iraq from a mountain of debt amassed by Saddam Hussein but if history is any indicator it appears unlikely. With Iraqi debt restructuring or forgiveness now a major issue in the effort to rebuild the country, the idea to declare the hundreds of billions of dollars owed to foreign creditors as "odious debt" is being promoted by some conservatives in the Bush administration. The "odious debt" doctrine holds that obligations incurred by...