Bulgaria looking to write off 80 per cent of Iraqi debt (29/09/05)

Bulgaria is planning to follow an agreement of the Paris Club of creditors and write off 80 per cent of the $1.7 billion in Iraqi debt, the country's Finance Minister Plamen Oresharski has told reporters.

Iraqi Finance Minister Ali Allawi

"The Paris Club agreement provides for an 80 per cent wipe off (of the money owed by Iraq) and a rescheduling of the remaining 20 per cent. We do not have a large field for manoeuvre, as this is an international practice," Oresharski said in an interview from Washington, taken on the sidelines of the annual meeting of the IMF and World Bank Group.

Oresharski added that he had reached an agreement with Iraqi Finance Minister Ali Allawi "to start consultations over the possibilities of settling the debt".

Asked if a 20 per cent reimbursement would be discussed, he said "Well...yes".

Bulgaria, whose current account deficit stands at 10 per cent of GDP despite an IMF imposed fiscal austerity policy, has until now refused to follow the Paris Club policy of wiping off Iraqi debt. Former Finance Minister Milen Velchev had earlier told Trud that his centre-right government "has made a lot of unsuccessful efforts to reimburse the larger part of the Iraqi debt".

The World Bank and the IMF decided Sunday to cancel the debt of 18 of the poorest countries, most of them African, and Iraq was not included.

Source: Forbes