The Paris Club group of 19 creditor nations has agreed to write off $31.1 billion of Iraq’s $38.9 billion debt to them. The cancellation will take place in three stages through 2008, and is contingent upon Iraq meeting requirements set down by the International Monetary Fund.
The Paris Club is comprised of the United States, Russia, Japan and the European nations. The deal has no effect on the $80 billion Iraq owes to countries such as Saudi Arabia and Kuwait.
The U.S. and UK lobbied for most of the debt to be forgiven, arguing the need for Iraq to get back on a sound economic footing following the war. Germany, France and Russia, however, argued that Iraq should not receive benefits greater than those offered to the world’s poorest countries.
On Monday, a multinational conference on rebuilding Iraq will convene in Egypt.