The finance minister of Germany and the U.S. Treasury Secretary have reached an agreement that if enacted would relived Iraq of up to 80 percent of
its foreign debt. The Paris club of creditor countries, Austria, Australia, Belgium, Britain, Canada, Denmark, Finland, France, Germany, Ireland,
Italy, Japan, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland and the United States is owed $42 Billion dollars. The United States has
been aggressively pushing for debt forgiveness, Iraqs total foreign debt is $122 billion, as it may hinder reconstruction. Several countries most
notably France and Germany have questioned the need because of the countries extensive oil reserves.
BERLIN - Germany's finance minister said Saturday that he and the U.S. Treasury Secretary have reached an agreement under which Iraq's creditors
would write off up to 80 percent of Iraq's debt, capping a months-long U.S. push for debt forgiveness.
Finance Minister Hans Eichel said a meeting with Treasury Secretary John Snow "created the basis on which the forgiveness of Iraqi debt can be
settled mutually in the Paris Club" of creditor nations, which is owed about $42 billion by Iraq.
"We agreed that there should be a write-off of debts in several stages amounting to 80 percent in total," Eichel told reporters on the sidelines of
a meeting of ministers from the Group of 20 major economies.
"Within this framework, the necessary decisions can now be taken in the Paris Club," Eichel said. He did not elaborate and took no questions.
The German-U.S. agreement was being discussed Saturday by the Paris Club and "our expectation is that it will be accepted," said Eichel's
spokesman, Joerg Mueller.
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Forgiving debt will allow Iraq to get back on its feet without the crippling debt payments that would otherwise eat up its oil income. However,
strict oversight should be maintained to ensure that oil profits are used for the people of Iraq and not to line the pockets of politicians and the
like. The last thing we need is another oil for food scandal.
[edit on 11/20/04 by FredT]