The United States Friday formally cancelled Iraq's entire debt to Washington, making good on a commitment the Bush administration made at a meeting last month of the "Paris Club" of creditors. Secretary of State Colin Powell, Treasury Secretary John Snow and Iraqi Finance Minister Adil Abd al-Mahdi signed the agreement, which erases all of Iraq's 4.1 billion dollar debt to the United States, CNN reported. Powell and Snow urged other Iraqi creditors not in the Paris Club to do the same to help the country rebuild. "Lifting the crushing burden of the old regime's debt is one of the most important contributions we can make to Iraq's new beginning," Powell said at the signing ceremony. The 19 member Paris Club agreed last month to write off 80 per cent of the nearly 40 billion dollars owed to them by the regime of Saddam Hussein. That left behind a total of 127 billion dollars in debt when the regime was deposed in 2003, according to al-Mahdi, who called the debt cancellation a "second liberation" for Iraq. The Paris Club, an informal group of creditor nations, includes the United States, Germany, Great Britain, France and Russia. It works to find sustainable solutions to payment dilemmas experienced by debtor nations.
