» Home » Business News Iraq Directory Services Plans Subscription Contact us Site Map Help About Iraq Move on Iraq's debt will pave way for IMF aid German Finance Minister Hans Eichel said the Paris Club group of creditor governments has agreed to forgive Iraq about 80 per cent of its debt without conditions. The accord with the Paris Club, which holds about $42 billion in Iraqi debt, may help pave the way for Iraq to receive about $8 billion in aid from the IMF and World Bank. The Arab country ran up about $125 billion in debt under Saddam Hussain. "By doing this we see a special situation for Iraq," Eichel told reporters during a meeting of finance ministers and central bank governors from the Group of 20 nations in Berlin. "This does not create a precedent for any other case." The US had lobbied other members of the G7 to cancel 90 per cent of what they're owed, saying the debt burdens Iraq's war- torn economy and prevents the Middle East nation from attracting the outside investment it needs to recover. The nation's economy shrank more than 30 per cent last year. Eichel said the agreement came after "a very amicable discussion" with US Treasury Secretary John Snow yesterday. The debt relief will come about in three stages, Eichel said, with 30 per cent pardoned immediately, 30 per cent tied to a programme by the IMF and 20 per cent tied to the success of that programme. Source : www.gulfnews.com © 2002-2004 Iraq Directory - All Rights Reserved