PARIS, Nov. 21 - The world's leading industrial nations agreed Sunday to cancel 80 percent of the nearly $39 billion debt owed them by Iraq, a critical step in rebuilding the country's devastated economy and an important precedent for its other creditors to follow.
The agreement, after a year of intense lobbying by the United States, puts pressure on Saudi Arabia, Kuwait and Iraq's other Middle Eastern neighbors to forgive obligations owed them, including billions in reparations Iraq owes from the Persian Gulf war in 1991.
The Group of 7 nations that are the core of the Paris Club - the United States, Britain, Canada, France, Germany, Italy and Japan - had vowed earlier this year to complete a debt relief package before the end of the year and before Iraq's planned elections.
Iraq's foreign debt totals $120.2 billion, a legacy of Mr. Hussein's ruinous wars and his last decade in power, when United Nations sanctions severely restricted the country's oil revenue. Nearly $39 billion of that debt - $42 billion including penalties and late interest - is owed to members of the Paris Club, a group formed in 1956 to help ease the financial obligations of heavily indebted countries.
Iraq stopped making payments on its debt after its invasion of Kuwait.
The United States had lobbied hard for the Paris Club countries to forgive as much as 95 percent of those obligations so that Iraq can get on with building a future instead of bailing out its past. Last year, Mr. Bush appointed former Secretary of State James A. Baker III as a special envoy to press Iraq's creditors to write off money owed them.
-from "Major Creditors in Accord to Waive 80% of Iraq Debt" by Craig S. Smith
Yup, the U.S. is always evil and greedy. Always. /sarcasm
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