USING ITS BOOMING OIL AND GAS INCOME, RUSSIA IS TO PREMATURELY PAY OFF 22 BILLION EUROS (28 BILLION DOLLARS) IN SOVEREIGN DEBT TO THE WEST, THE GERMAN ECONOMICS MINISTRY SAID FRIDAY AS CLUB OF PARIS TALKS IN THE FRENCH CAPITAL NEARED AN END, ACCORDING TO DPA. GERMANY, THE BIGGEST CREDITOR, WILL RECEIVE 7.7 BILLION EUROS PLUS A PREMIUM OF 700 MILLION EUROS. MOSCOW HAS BEEN IN TALKS FOR MONTHS WITH THE CLUB OF PARIS REPRESENTING 19 WESTERN NATIONS THAT LENT MONEY TO RUSSIA OR THE SOVIET UNION BEFORE IT. A WEEK AGO, GERMANY HAD AGREED TO ACCEPT 1.3 BILLION EUROS PREMATURELY, BUT NO MORE. RUSSIA IS KEEN TO REDUCE DEBT, BUT GERMANY HAD ARGUED THAT A SUDDEN PAYBACK WOULD LEAD TO A FISCAL DEFICIT IN LATER YEARS, SINCE IT WAS COUNTING ON DEBT SERVICING TO KEEP ITS FEDERAL BUDGET BALANCED. THE GERMANS DEMANDED A HEFTY PREMIUM TO ALTER THE CREDIT TERMS IN LINE WITH RUSSIA'S WISHES. THE BERLIN SPOKESMAN SAID THE AGREEMENT WITH THE CLUB OF PARIS WAS THE FIRST TO PROVIDE FOR REPAYMENT OF THE LOANS AT THEIR MARKET VALUE RATHER THAN THEIR NOMINAL VALUE.
