The Paris Club of creditor nations agreed on Sunday to cancel 80 percent of the debt Iraq owes its members, ending a trans-Atlantic dispute and probably setting the framework for debt pardons from other creditors. Paris Club President Jean-Pierre Jouyet told reporters in Paris that the deal, which will slash Baghdad's debt to Club creditors to $7.8 billion from $38.9 billion, would be put into effect in three steps over the next four years. The deal came shortly after Russia, in talks on the sidelines of a meeting of Group of 20 developed and emerging market countries in Berlin, agreed to forgive up to 80 percent of Iraq's debt. "The Paris Club creditors have just signed an agreement on restructuring Iraq's debt," Jouyet said after the negotiations. He said the Paris Club would pardon 30 percent of Iraq's debt to it immediately, an additional 30 percent in 2005 and the final 20 percent in 2008. "This is a real milestone and shows that the trans-Atlantic alliance remains a strong force for good in the world. We look now to the non-Paris Club members to take similar action," U.S. Treasury Secretary John Snow said. "It gives hope and promise to the Iraqi people that they can rebuild their economy," he said.
