Nations discuss reducing Iraq debt

By Peronet Despeignes and Steven Komarow


The Bush administration got more good news on Iraq on Monday, as French Foreign Minister Dominique de Villepin said in Paris that France and other nations are willing to work out a deal next year to allow Iraq to write off some of the enormous international debt run up by Saddam Hussein.

De Villepin's comments came on the eve of a visit to France today by former U.S. secretary of State James Baker, who is traveling to France and four other nations this week to seek debt forgiveness for Iraq. De Villepin gave no details about how much debt might be restructured or canceled, but he said France would work with other nations to find a level of debt "compatible with the financial capacities of Iraq."

Iraq owes billions of dollars in debt and war reparations to governments, banks and companies across the Middle East, Europe, Asia and even to the United States. During more than two decades in power, the authoritarian ruler of a country with the world's second-biggest oil reserves behind Saudi Arabia was apparently viewed as a good credit risk: Estimates of the debt Saddam ran up range from about $100 billion to as much as $400 billion, including disputed estimates on business contracts, plus money owed to Kuwait and other Gulf States as reparations for the war in 1990-91.

Whatever the sum, it's far more than a war-battered Iraq can pay, economists say. The Heritage Foundation, a conservative think tank that advocates for the debt to be written off, estimates Iraq's obligations at 14 times the nation's entire annual economic output. Nations typically pay their debts with foreign exchange earned from exports. Before the war, Iraq was netting about $4 billion annually, mostly from oil. Interest payments alone to Iraq's creditors could amount to more than $11 billion a year, more than half the annual government budget.

more...http://www.usatoday.com/news/world/iraq/2003-12-15-iraq-debt-usat_x.htm

In the mean time, Bush will say something arrogant and cocky and none of the debt will be forgiven.

headlines said billions
details had millions