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Wednesday, November 24, 2004

Romania still wants money back from Iraq

The Paris Club decision last Sunday, to write off 80% of Iraq's debts, is not valid for Romania.

Foreign Affairs Minister Mircea Geoana on Tuesday said the debt write off procedure "does not apply to Romania," which is not a member of the Club.

In addition, Prime Minister Adrian Nastase said Iraq has plenty of resources to cover its debts. "Iraq is not a poor resource country. We understand it cannot pay its debts now," Nastase stated, adding the issue could be solved by applying a new maturity term for the $2.5 billion debt.

Iraq owes Romania $1.7 billion, to which it adds interests, thus boosting the amount to be recovered to $2.5 billion (1.913 billion euros).

The debt dates back to the Communist rule of Nicolae Ceausescu, who had strong ties to Saddam Hussein.
The figure now accounts for some 3% of Romania's Gross Domestic Product (GDP), estimated at 55 billion euros this year.

The Paris Club of 19 creditor countries, including the United States, Japan, Russia and EU nations, on Sunday said its members had agreed to wipe out 80 percent of the money it is owed by Iraq over three years.
Iraq owes the Paris Club nations some $40 billion (30 billion euros), which is about a third of the country's total foreign debt ($125 billion).

Posted by Iulia Rasoiu : 11/24/2004 10:02:00 am