Creditors 'agree Iraq debt deal'

[MIKE BURN]

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Saturday, November 20, 2004 Posted: 11:12 AM EST (1612 GMT)



BERLIN, Germany (CNN) -- Germany's finance minister has said he and his American counterpart have worked out a deal to write off 80 percent of Iraq's $120 billion foreign debt.



The announcement by Hans Eichel was made in Berlin Saturday where finance ministers and other banking officials from the Group of 20 major economies are meeting.



Eichel told reporters on Saturday: "I had talks with my American colleague, (Treasury Secretary) John Snow, which created the basis on which the forgiveness of Iraqi debt can be settled mutually in the Paris Club."



"We agreed that there should be a write-off of debts in several stages amounting to 80 percent in total," The Associated Press reported Eichel as saying.



Eichel said 30 percent would be written off immediately, a further 30 percent in a second stage "tied to a program of the International Monetary Fund" and another 20 percent "linked to the success of this program," he said.



"Within this framework, the necessary decisions can now be taken in the Paris Club," Eichel said. He did not say when the debt write-off would be formally approved and took no questions.



The Paris Club works to find sustainable solutions to the payment dilemmas experienced by debtor nations.

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