Russia has formally approached the Paris Club to begin negotiations on paying off roughly $12 billion of its outstanding debt ahead of schedule, Finance Minister Alexei Kudrin announced Thursday. Prime Minister Mikhail Fradkov had already signed a decree authorizing the move, after which Kudrin sent an official letter to the creditor group.
The sum represents a portion of the approximately $20 billion Russia still owes from the former Soviet Union's obligations. The Paris Club, an informal body of 19 creditor nations, confirmed it had received the Russian proposal and said it would review the offer during the second week of May.
Russia had signaled its intentions at a G8 finance ministers' meeting in February, building on a $15 billion early repayment it completed to the Paris Club the previous year, with rising oil revenues funding the effort. Kudrin said final repayment terms should be settled within two to three months.
One complication involves Germany. Finance Minister Peer Steinbruck indicated Berlin requires the interest income from Russia's debt through 2015 to meet its own repayment obligations, leaving Germany's participation uncertain. A separate Russian proposal to channel the prepaid funds through the World Bank to the poorest nations received a cool response from fellow finance ministers in February.
Historical summary. TurkishPress restated this wire report, first published in April 2006, in its own words.