Creditors Give Russia A Break On Debt

The Paris Club of creditor banks agreed to reschedule about $8 billion of Soviet-era Russian debt following the International Monetary Fund's decision last week to approve a new 17-month economic reform program, and last week's World Bank announcement of a $1.2 billion loan to help Russia restructure its economy. Paris Club negotiators also agreed to seek a "global solution" to Soviet-era debt, with talks scheduled to begin in autumn 2000. The agreement concerns the arrears and the amounts due on Soviet-era debt due between August 1998, when the collapse of the ruble forced the Russian government to place a moratorium on debt repayment, and December 2000. Debt from this period will be rescheduled over a period of 15 to 20 years depending on the type of debt, explained Francis Mayer, chair of the Paris Club of creditor banks, without giving further details. Total Russian debt owed to the worldwide group of creditors at the end of 2000 amounts to $12 billion, Mayer said. But he added that only two-thirds of it concerned Soviet-era debt.