US wipes $4.1 billion Iraq debt18/12/2004
The United States has announced that it has written off all of the $4.1 billion debt owed to it by Iraq.US Treasury Secretary John Snow described a debt reduction deal between the Paris Club of creditor nations and Iraq as a good first step and urged other nations to follow suit.Mr Snow signed the US portion of the agreement at a ceremony at the State Department, in conjunction with Secretary of State Colin Powell and Iraqi Finance Minister Adil Abd-al-Mahdi, calling the debt relief a "second liberation". The Paris Club of lenders agreed last month to cancel 80 per cent of the debt Iraq owes its members."The US is therefore ready to assist the Iraqis in implementing the Paris Club agreement, including seeking comparable treatment from sovereign creditors who do not participate in the Paris Club," Mr Snow said.Iraq has claimed that its debts are hampering the process of reconstruction. The country owes an estimated $40 billion in debt to the 19-strong Paris Club of creditors, which includes the US, Russia, Japan and European nations, and a further $80 billion to countries outside the Paris Club.The Paris Club agreement will be put into effect in three steps over the next four years. Under the deal, the nations concerned will immediately cancel 30 per cent of the debt owed to them by Iraq.