Germany announced at a G20 finance ministers' meeting in Berlin that Paris Club creditor nations had reached a framework to forgive up to 80 percent of the debt Iraq owes them. The agreement came after France, Germany, and Russia had long held firm at a 50 percent ceiling.
German Finance Minister Hans Eichel outlined a three-stage structure: an immediate 30 percent write-off, a further 30 percent contingent on Iraq meeting IMF program targets, and a final 20 percent tied to the program's overall success.
Iraq's total external debt stood at around 120 billion dollars. Paris Club members held roughly a third of that sum. Gulf Arab creditors and former Soviet-bloc countries accounted for about 60 billion dollars more, while private lenders were owed between 20 and 30 billion.
A senior US official called it "a substantial amount of debt relief" and a good deal for Iraq's reconstruction. Eichel cautioned that the arrangement reflected Iraq's unique circumstances and should not be read as a template for other debtor nations.
The Paris Club had set a deadline of 31 December to finalize terms. Technical details were still being worked out in Paris at the time of the Berlin announcement.
Historical summary. TurkishPress restated this AFP wire report, first published in November 2004, in its own words.