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France resists U.S. push to slash Iraq debt
EFLThe United States wants Iraqâs sovereign creditors to write off 80-90 percent of the oil-rich stateâs debt but Paris wants to cancel just 50 percent, a French source said on the margins of a G7 meeting on Sunday. "The French position is 50 percent, which is a handsome gesture," the source said. Iraq owes about $42 billion dollars to the Paris Club, agroup of 19 creditor states including all of the worldâs industrialised economies, according to Paris Club estimates. French Finance Minister Nicolas Sarkozy said he expected the International Monetary Fund (IMF) to produce its assessment of Iraqâs debt in about 10 days time. "We know (the United Statesâ) conviction and the American position, which is to wipe out as much as is possible of Iraqâs debt," Sarkozy told reporters atfer the meeting in New York. "We agree completely with making an effort -- a substantial effort. The percentage will be decided by the heads of state."France and Germany are among the bigger creditors in the club behind Japan and Russia, and are owed almost $6.0 billion and $5.0 billion respectively. Russia has spoken of a 65 percent write-off of debts owed to it, but officials have said this promise is far from definitive and linked to demands for confirmation of business contracts for Russian oil and gas exploration in Iraq. The Paris Club takes into account a countryâs economic potential, including natural resources like oil, when assessing its eligibility for debt writeoffs. Sarkozy said granting Baghdad greater debt relief than that given to less well-endowed nations would be difficult. "If we departed from the rules of the Paris Club, what would we say to those countries that did not have the same conditions," he said. "Fifty percent is the Paris Club rule," he added. Heads of state and government from the G7 -- the United States, Japan, Germany, Britain, France, Italy and Canada -- and Russia would address the issue at a June 8-10 summit in Sea Island, Georgia, Sarkozy said. Iraq is estimated to owe about $120 billion in all, of which much of the non-Paris Club debt is owed to Kuwait, Saudi Arabia as well as countries like China and Bulgaria. The G7 has set its sights on a deal on Iraqi debt by end-2004. European Union Economic and Monetary Affairs Commissioner Joaquin Almunia urged the economic powers to reach an agreement. Posted by: TS(vice girl) 2004-05-23 |
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