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Iraq-Jordan
France resists U.S. push to slash Iraq debt
2004-05-23
EFLThe United States wants Iraq’s sovereign creditors to write off 80-90 percent of the oil-rich state’s 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 world’s 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 Iraq’s debt in about 10 days time. "We know (the United States’) conviction and the American position, which is to wipe out as much as is possible of Iraq’s 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 country’s 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)

#9  RWV

Phrawnce still hasn't paid off WWI debts, let alonw WWII. They're deadbeats.
Posted by: Mr. Davis   2004-05-23 10:30:40 PM  

#8  Let's see . . . they didn't want to get rid of Saddam, they don't want to give the new government a chance by reducing its debt . . .

Okay, at least they're consistent, but what do they have against the poor country?
Posted by: The Doctor   2004-05-23 9:09:23 PM  

#7  Iraq can buy, on credit, some of the French debt owed the US. Then they can pay back the French with their own debt. The US can then cancel what the Iraqis borrowed to buy the French debt. It's a win-win.
Posted by: ed   2004-05-23 9:07:41 PM  

#6  I believe that the French should be paid what Iraq owes them right after they repay the US for debts incurred before, during, and after WWII. Also, isn't there a precedent for nations disavowing debts illegally incurred by deposed governments? If we deduct all the debt incurred by Saddam for weapons, chemical weapon feedstocks, etc., the real write-off should be 90% - 100% rather than 50%. If bribes to French firms and politicians are to be deducted, the French probably owe the Iraqis money.
Posted by: RWV   2004-05-23 8:43:45 PM  

#5  LofR Exactly! If lending to dictators had the certainty of complete loss of the 'investment' when the dictator went, then no one would lend to them and being a dictator becomes a much less viable model for running a country.
Posted by: Phil B   2004-05-23 8:23:41 PM  

#4  Cancel everything owed to France, Germany and Russia, and announce a 1000 year payoff plan, with 0% interest, for the rest.

Let them learn the perils of loaning money to dictators.
Posted by: Laurence of the Rats   2004-05-23 8:13:20 PM  

#3  Too bad we hadn't loaned the Iraqis cash and they had defaulted. We could of used the Napolean III rational for the invasion
Posted by: cheaderhead   2004-05-23 8:07:48 PM  

#2  We should deduct any unaccountable funds from the Oil for Bribes program from Iraq's debt.
Posted by: Robert Crawford   2004-05-23 7:56:27 PM  

#1  Factor all the plunder that France did under Sammy and the French should owe the Iraqis money for all the hell they enabled on the Iraqi people.
Posted by: Alaska Paul   2004-05-23 7:26:06 PM  

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