Saturday, November 20, 2004

France reconstruction of Iraq

Visiting French Prime Minister Jean-Pierre Raffarin said
Friday that France is prepared to collaborate in the
reconstruction of Iraq, but that country must advance
towards the "political" solution of its crisis.

"France along with its partners, and in particular
within the European Union (EU), is prepared to
contribute to the political and economic reconstruction
of Iraq," he told a press conference in Mexico.

France will participate along with the Group of Eight,
the Arab League and Iraq's neighbors, in the Sharm el
Sheik (Egypt) Conference, scheduled for Nov. 22-23, to
discuss the economic reconstruction of Iraq and its
security situation.

"We participate in Sharm el Sheik with a positive mind,
wishingfor this event to contribute to the transition
process considered in Resolution 1546 of the United
Nations Security Council, and that it be supported by
the region's countries," he said.

Raffarin insisted the problem of Iraq is "political" and
that the terms established by the Security Council for
the transition -which includes elections in January-
must be respected.

1 comment:

  1. Major economic powers agreed to write off US$31 billion
    (euro24 billion) of Iraqi debt in a major breakthrough
    for U.S.-led efforts to get Iraq's economy back on its

    Months of intensive lobbying by Washington finally paid
    off when the other 18 members of the Paris Club agreed
    to wipe 80 percent of the US$39 billion (euro30 billion)
    that Iraq owes them.

    The cut represents about a quarter of Iraq's total
    international debt. But the three-stage deal announced
    Sunday also represents a significant concession by
    countries that opposed the U.S.-led invasion of Iraq,
    such as France, Germany and Russia, which had expressed
    reluctance to forgive much more than half of Iraq's

    French President Jacques Chirac said in June that going
    any further could be seen as unfair to poorer countries
    with heavy international liabilities but without Iraq's
    oil wealth.

    In a sign that a compromise was near, however, German
    Finance Minister Hans Eichel publicly endorsed an 80
    percent write-off on Saturday after talks with Snow.

    France, which has been pushing to improve ties with
    Washington since U.S. President George W. Bush's
    re-election earlier this month, also backed the
    proposal, and Russia eventually followed suit Sunday
    after a further night of talks.

    Paris Club chairman Jean-Pierre Jouyet said 30 percent
    of Iraq's Paris Club debt would be wiped immediately
    under the deal struck Sunday, with a further 30 percent
    canceled when Iraq agrees on a reform program with the
    International Monetary Fund, expected next year.

    Iraqi Finance Minister Adel Abdul-Mahdi hailed what he
    called a "historic agreement,'' reached Sunday after six
    days of talks in the French capital.

    "This money is needed for Iraq not only because Iraq is
    a ruined country but because Iraq is an important player
    internationally,'' Abdul-Mahdi said.

    "What will happen in Iraq will affect politically and
    economically the Middle East and the world.''

    U.S. Treasury Secretary John Snow also welcomed the debt
    cut as a "real milestone.''

    Speaking to reporters after a meeting in Berlin of
    finance officials from the Group of 20 industrial and
    developing nations, he said it "shows the trans-Atlantic
    alliance remains a strong force for good in the world.''

    The United States had been pressing for as much as 95
    percent of Iraq's Paris Club debt to be written off,
    arguing that it was hindering postwar reconstruction
    efforts that are already challenged by the ongoing war
    against armed insurgents.

    The final 20 percent will be forgiven upon completion of
    the IMF program in 2008, the chairman said, reducing
    Iraq's Paris Club debt to US$7.8 billion (euro6

    Jouyet said the club had also "shown its flexibility''
    by agreeing to a three-year waiver of repayments on the
    remaining debt. "Iraq will be able to concentrate its
    entire resources on reconstruction,'' he said.

    Jouyet, Snow and Abdul-Mahdi all called for similar
    levels of Iraqi debt forgiveness from non-Paris Club
    lenders, to which Iraq currently owes another US$80
    billion (euro60 billion).

    Under a "comparability clause'' in the agreement, the
    Paris Club could theoretically suspend part of the debt
    reduction if it were not matched by Iraq's other major
    creditors - led by Saudi Arabia and Kuwait.

    The Paris Club's members are Australia, Canada, Japan,
    South Korea, Russia, Switzerland, the United States and
    the richer European Union countries, including Britain,
    France, Germany and Italy.


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